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Fiscal commission to examine tax-varying powers for Stormont Executive

Rebecca Black, PA
·4-min read

A fiscal commission is set to examine tax-varying powers in Northern Ireland, the region’s finance minister has said.

The Stormont Executive has had the power to cut corporation tax since 2015 but has not yet used it due to a potential impact on the block grant which the region receives from Westminster.

Conor Murphy said Stormont needs “more fiscal levers”.

Northern Ireland is set to receive an additional £412 million in the budget but Mr Murphy said this will go towards tackling the coronavirus pandemic, including business grants, the health service and supporting vulnerable people.

He said the increase is “just less than £5 million … which in effect means a cut for most departments as salaries go up and costs go up”.

The fiscal commission will examine tax-varying powers, including revenue-raising powers.

Mr Murphy said it will report to the next Stormont Executive following next May’s Assembly’s elections.

“I wanted to look at the full gambit of tax-varying powers that may be available to us,” he told the BBC’s Sunday Politics programme.

“Scotland have already done this, Wales have already done this, it’s time we were looking at that.

Coronavirus – Thu Jul 2, 2020
Stormont needs more fiscal levers, a minister has said (Peter Morrison/PA)

“What we want to do is to look at the ideas of some tax-varying powers right through the full range, examine what is useful for us.

“I think the Executive needs a much broader informed approach to this broad debate, not just in the Executive but in the Assembly and across society as to what powers the Executive could use and how they might impact on some of the things that we want to do.”

Mr Murphy said to fund proper services, the Executive “has to look at ways to find the means to do that”.

“We’re not getting that support from London at the moment but the Executive should have fiscal levers at its disposal,” he said.

“We have our own particular interests here. we have our own priorities here we have our own particular economic circumstances, all which needs supported.”

Pressed on revenue-raising measures, Mr Murphy said people should pay a “fair amount” for services provided.

“We want to fund proper public services in health and education and all those services provide, then we need the resources to do that and we need to do that in a fair way, which reflects that those who can afford to pay for that do, and those who can’t are supported as they need support so we can rebuild the economy and try and get people back into work,” he said.

Mr Murphy said he is “not being prescriptive” about what the commission may suggest.

“I have asked a commission to come together to do a broad report to look at the tax-varying issues that should be available to us,” he said.

“It would be for an incoming executive to decide on the basis of that report to decide what and how they might they might want to use such powers, we then have to petition obviously Westminster to have them transferred to us so this is a lengthy process.

“I’m very happy that they examine the full range of issues, why would we not analyse all of the powers that could be available to us and what we might do with them?”

DUP MLA Paul Frew said “shockwaves” will have been sent through the business community and every household to hear that a Sinn Fein minister “is looking at income tax raising powers”.

“I think we have to look first of all at how do we function as a government,” he said.

“I would ask the finance minister to review and reform what we do to make it more efficient and effective, but we should also look at the tax-raising powers that we already have.”

He added: “It’s one thing saying that we want tax-varying powers but tax-varying powers mean that you can put things down or up … and we need ministers that are going to make tough decisions, and I don’t think I have seen a tough decision being made by this finance minister yet.”