16 June 2011
You will be aware that the UK Government is currently undertaking a consultation exercise on the devolution to the NI Executive of the power to set rates of corporation tax on business profits. The main political parties in the Assembly have declared in favour of a reduction in the rate of corporation tax. It is estimated that this will result in a loss to the NI block grant of up to £367m per annum. This reduction would have serious consequences for the delivery of public services in Northern Ireland and would be in addition to the £4‑£5bn being removed from the NI public expenditure allocation over the next 4 years as a result of the Comprehensive Spending Plans set by the UK Government late in 2010.
There is no guarantee that a reduction in corporation tax will result in the creation of additional jobs in Northern Ireland.
The Irish Congress of Trade Unions has submitted the attached response to the consultation paper “Rebalancing the NI Economy”.
We can be certain that the powerful business lobby in Northern Ireland will be inundating the UK Government with responses in favour of the devolution of the power to set corporation tax and a reduction in the same tax.
The purpose of this circular is to encourage all branches to organise responses from members to the consultation expressing opposition to the devolution of this power to the NI Executive and support for the position of the Irish Congress of Trade Unions and NIPSA.
The consultation ends on 1st July. It is important that as many responses from members and their friends and families are sent to:-
1 Horse Guards Road
or by email to firstname.lastname@example.org before the closing date.
I attach a brief template which branches and individuals may utilise for this purpose.
Mr Richard Williams
1 Horse Guards Road
Dear Mr Williams
DEVOLUTION OF CORPORATION TAX TO NORTHERN IRELAND
I am writing to register my opposition to any legislation or decision by the UK Government to devolve the power to set corporation tax levels to the NI Executive and Assembly.
I fully support the response submitted by the Irish Congress of Trade Unions. I would in particular point to the report by Richard Murphy “Pot of Gold or Fools Gold” and the more recent report by the Wilberforce Society both of which conclude that it would not be in the interest of either the UK or Northern Ireland if corporation tax powers were devolved to Northern Ireland.
The devolution of this power would create a situation whereby public spending and public services would be subject to significant cuts if a reduction in corporation tax was implemented with no guarantees that additional jobs would be created.
I would ask that this view be taken into account in this consultation process.