THE BRITISH government must not use the issue of corporation tax to hold back on action to “kick-start” the Northern Ireland economy, Ed Balls, British shadow chancellor of the exchequer, has warned.
The Labour MP said in Belfast yesterday that funding to support the construction industry in the North could trigger economic stimulus, leading to the creation of tens of thousands of jobs.
Mr Balls, who met the First Minister, Peter Robinson, and Deputy First Minister, Martin McGuinness, at Stormont yesterday, followed up on his recent proposal that the British government should use funding from the sale of the 4G mobile phone spectrum to build 100,000 houses in the UK.
Mr Balls, in an interview with The Irish Times and when speaking at a Confederation of British Industry dinner in Belfast last night, said the sale could realise up to £4 billion, of which £70 million should be allocated to the Northern Executive.
Such an allocation could build 3,000 new homes and overall lead to the creation of tens of thousands of jobs. “We would enable the Executive to bring forward long-term investment projects to get people back to work and strengthen our economy for the future. After shedding 5,000 jobs in the last two years, Northern Ireland’s construction industry needs that help,” Mr Balls added.
A Labour spokesman elaborated that he was not saying building 3,000 homes would create tens of thousands of jobs but that the overall economic stimulus from such investment could result in such a jobs boost.
Mr Balls said other proposals included reducing VAT from 20 per cent to 17.5 per cent and to 5 per cent relating to home improvements, repairs and maintenance; and levying “a £2 billion tax on bank bonuses to fund a real jobs guarantee that could help 2,000 young people in Northern Ireland back to work”.
He was not privy to the discussions between the Executive and the British treasury on proposals to reduce corporation tax from 24 per cent to a rate somewhat in line with the Republic’s 12.5 per cent tax, and therefore did not have a specific view as to whether there should be a reduction.
But issues over corporation tax must not hinder a recovery plan for Northern Ireland, he added. “We have an open mind. We would not be using the excuse of talking about corporation tax as a reason not to act to kick-start the recovery and boost jobs,” he said.
