It was widely predicted that the Autumn Statement would include devolution of corporation tax powers for Northern Ireland but today’s announcements fell somewhat short of this. Whilst the Chancellor recognised the arguments in favour of devolution, he made it clear that the powers would be handed over to Stormont only if the Northern Ireland Executive can “show that it is able to manage the financial implications”, adding that the “current talks will see if that’s the case”.
In recent months, the political parties in Northern Ireland have failed to reach consensus on a range of significant issues, including budget and welfare reform. All-party talks on these issues have stalled, but this promise of corporation tax powers could be a sizeable carrot to get the new round of political talks moving in a positive direction.
The Chancellor has confirmed that, if appropriate, legislation devolving corporation tax will be announced before next May’s General Election. What is not clear from today’s announcement, however, is what exactly has to be achieved at the all-party talks to satisfy the Chancellor that the Northern Ireland Executive is capable of managing the financial implications of devolution.
So, not quite cause for celebration in Northern Ireland just yet but certainly a step in the right direction for those in favour of devolution.