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13 September 2007 Edition

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The Mitchel McLaughlin Column

Politics of Past versus Politics of Future
From conversations and contacts that I have had with people from all walks of life – business, social, political and academic – all are agreed that the biggest barrier to building a sustainable economy in the North is the fact that fiscal policy, taxation and public expenditure are all determined in London. All are agreed that that must change and in the recent Assembly elections the electorate voted emphatically to send British Ministers home in order that a local administration could make the decisions that affect our daily lives. The people voted for a new era in politics.
Unfortunately, in the debate on the Sinn Féin motion calling for  tax-varying powers for the Assembly, the politics of the past rather than the future dominated unionist thinking on a very important issue that could have provided a small advance in self-determining our economic future. It was disappointing  to witness during the debate that the unionist parties, although having fought the election enthusiastically on a platform of ending direct rule, chose to endorse continued direct rule in relation to our economic future. In their engagements with Gordon Brown, the British Treasury and, latterly, with the Varney Review, all parties argued for a more competitive level of corporation tax – itself a form of tax-varying. Yet, speaker after speaker from the unionist benches refused to support a measure that would have enabled them to go some way to addressing this and similar issues for themselves.
Even though few could demonstrate that an economic policy designed and administered by Whitehall will not always be delivered for the benefit of the island of Britain with scant consideration for the special needs of the North, none felt empowered to confront the problem.
As recognised by economists and business leaders – many from the unionist tradition – not only are we excluded from the economic advances in the rest of Ireland because we are locked into the one-size-fits-all approach of the British Treasury, but we must work within the parameters of the inadequate and unfair Barnett formula and a privatisation agenda that has been imposed on us by politicians who will never be held accountable to the electorate in the North.
In debates in the Programme for Government Committee, set up in the Hain Assembly and in the Preparation for Government Committee, all parties clearly and consistently supported the introduction of tax-varying powers in order to grow the regional economy; develop and target tax incentives towards areas of high unemployment; encourage small businesses; and enable other specific sectors, such as the social economy sector.
Ultimately, we must consider whether we can make a better fist of government than direct rule Ministers, and deal with the underperforming economy in the North. If we are then we will have to give ourselves the tools to do so. Somebody must explain to me how supporting an argument for reducing corporation tax to 12·5% is not an argument for tax variation. Unfortunately it seems that unionists are still stuck in the politics of the past by continuing to react to the authorship of the motion rather than consider the merits and benefits that would accrue from its acceptance.

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