Wed 3rd Jul 2013
DETI Economic Commentary June 2011
As the Northern Ireland Assembly embarks on a new mandate the local economy remains a key priority for the Executive. The impacts of the recession remain live – whether that be in terms of a constrained flow of the necessary credit to business, the impacts on the labour market or the fiscal challenges presented by the approach the UK is taking to bringing the deficit under control.
Against this backdrop my Department and I continue to do everything we can to support local businesses through the economic recovery. We are looking at the ways we can rebalance the economy more towards the private sector over the longer term. We also are pressing forward with the development of a new Economic Strategy for Northern Ireland, which will be published for consultation later this year. In addition, during March 2011, HM Treasury published a paper on rebalancing the Northern Ireland economy, including the potential to allow Northern Ireland to set its own rate of corporation tax.
This latest edition of my Department’s Economic Commentary is very timely. It examines the benefits of Foreign Direct Investment (FDI) as a catalyst for economic development, and looks at the evidence of the potential for a low rate of corporation tax to attract foreign investment and encourage the growth of indigenous businesses.
The Economic Advisory Group (EAG), which I established to provide me with independent advice on the economy, has carried out its own research to assess the potential impact on NI of a reduced rate of corporation tax. Their report finds that without a radical change in approach, the NI economy will not experience meaningful convergence with the UK and will remain one of the poorest UK regions.
However, the results suggest a much more encouraging picture if NI gained the power to lower its rate of corporation tax. This could see the creation of 58,000 additional jobs by 2030 with living standards and productivity also increased as a result of the measure.
I am encouraged that a consensus is building which is advocating that HM Treasury transfer the use of this crucial economic development tool to local Ministers. You can and should make your views heard within Westminster by responding to the consultation by the deadline of 24 June.
Arlene Foster MLA
Minister of Enterprise, Trade and Investment
DETI Economic Commentary
The full Commentary can be viewed via the following link: