Varney underlines the Herculean Task facing our Economy, says Beggs
Commenting on the publication of the Varney Report today, Ulster Unionist Finance spokesman Roy Beggs said in a statement,
“When the DUP failed to get the £1 Billion package that they had promised, they deflected their failure with the Varney Review and the prospect of tax reforms to kick-start the Northern Ireland economy. However Gordon Brown has already ruled out a lower corporation tax solely for Northern Ireland.
When this is combined with a tight, stand-still budget, it is clear reading between the lines of the Varney Report that we face a Herculean task in stimulating the much needed growth in Private Sector employment. We are to be reliant on our current budgets and our won devices.
The reduction in UK general corporation tax levels and the basic level of income tax from the last budget seems helpful at first look. However despite the headline grabbing reduction in corporation tax from 30% to 28% for large businesses, it should be remembered that there was a well concealed increase in the same tax from 19% to 21% for small business. The Northern Ireland economy relies particularly heavily on the enterprise of small and medium sized businesses. This increase in corporation tax for small business has adversely affected Northern Ireland.
The difficulty is that our manufacturing sector is being hit by higher costs in gas, electricity and transport than their competitors in the rest of the United Kingdom. These additional costs are already diverting money away from research and development and marketing.
The Chancellor should be granting lower excise duties across the board which would make many firms more competitive and in one fell swoop end the smuggling of illegal fuel that is funding on-going criminality in border areas. The exchequer is losing out in Millions of pounds due to their own stubborn short-sightedness. As it stands we have a chicken and egg situation, not helped by a Scrooge Chancellor and his even Scroogier predecessor whos legacy is still being felt.
Northern Ireland’s business men and women are a resilient and determined bunch. However given the closed mind of the chancellor on a local Corporation tax cut, his unwillingness to cut excise duties and bring them in line with our closest competitors in the Irish Republic, there are few tools at the disposal of the Executive to entice Investors to Northern Ireland. After all the hype and promises from the DUP, we have now been promised a second review into the implications for employment stemming from the Programme for government and the draft budget.”