Devolution of Fiscal Powers not beneficial to Northern Ireland – Wilson

Finance Minister Sammy Wilson said today that devolving fiscal powers to the Northern Ireland Assembly would mean less funding and would be economically dangerous for Northern Ireland.
~ Thursday, 9 February 2012

The Minister was responding to a statement issued earlier today by Sinn Fein MLA Paul Maskey when he said that fiscal autonomy would place local politicians in a much stronger position to tackle the economic crisis head on.

Sammy Wilson said: “Devolving any tax varying power must satisfy the European Court of Justice decision on the 'Azores Case' which means that Northern Ireland would need to bear the full fiscal consequences of devolution.

“In practice, this would mean that the Northern Ireland block grant would need to be reduced in line with the tax revenues forgone.  For example Mr Maskey referred to fuel prices, but what must be remembered is that fuel duty collected in Northern Ireland amounts to around £900m per annum. So seeking to devolve and reduce a tax such as this in any meaningful way would mean huge reductions in the funding available for essential public services such as health and education. We would also have to pay the cost of administering devolved taxes such as these, further reducing the public expenditure we have available.

“There could also be significant risks associated with the devolution of substantial tax varying powers which could make public expenditure planning much more difficult. Given the volatility of tax receipts, which can vary significantly year-on-year, we could find ourselves in a situation where we would have to deal with the possibility of substantial increases or decreases in the revenues available for public expenditure in any one year.

“I think this statement issued by Mr Maskey is very misleading and contrary to what the Executive is committed to, in seeking to ensure that Northern Ireland is treated equitably and fairly by Westminster and importantly Treasury.”

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