Sinn Féin - On Your Side

Sinn Féin lead debate on Tax varying Powers

10 September, 2007


Sinn Féin West Belfast MLA Jennifer McCann has argued that taking tax varying powers away from the British Treasury and having the ability to generate revenues through initiatives such as a plastic bag tax or to create incentives for our local indigenous businesses will be core issues for the Assembly.

Opening a Sinn Féin debate on 'Tax varying powers and an Executive borrowing facility' in the Assembly today Ms McCann said:

"This is probably the most important debate that this Assembly will have - not just today but any day. On many of the key issues that we will discuss in the coming weeks and months, how we fund our policies will be at the heart of our discussions.

"The Budget and Programme for Government - the setting of funding priorities will be the first test of how, as local politicians, we can make a difference on education, health, housing and the economy.

"There are also key issues such as water charges, the review of rating, the Varney Review, industrial de-rating and the use of private finance for our public investment, all of which depend on our ability to utilise the available financial resources.

"But at the heart of all of these issues will be the debate about our level of fiscal freedom - the demand for Tax varying powers and an Executive borrowing facility. Without them, I believe that we will be set up to fail.

"I believe that we can use these powers responsibly to generate revenue, for example through a plastic bag tax for targeted action, for example to support our indigenous businesses.

"We could also look at taxes on inheritance, real estate, gambling and vehicles.

"These fiscal freedoms can unlock our potential to set our own funding priorities. They would also be an essential component developing a radical plan of action to tackle deprivation and ensure long-term economic development." ENDS

Full Text of speech (check against delivery)

Jennifer McCann - Tax Varying Powers

This is probably the most important debate that this Assembly will have - not just today but any day.

It cannot and should not - it will not end with a vote on the motion today.

On many of the key issues that we will discuss in the coming days and weeks - how we fund our policies will be at the heart of our discussions.

The Budget and Programme for Government - the setting of funding priorities will be the first test of how, as local politicians we can make a difference on education, health, housing and the economy.

There are also key issues such as water charges, the review of rating, the Varney Review, industrial de-rating and the use of private finance for our public investment, all of which depend on our ability to utilise the available financial resources.

But at the heart of all of these issues will be the debate about our level of fiscal freedom.

The demand for Tax varying Powers and an Executive Borrowing Facility.

Without them, I believe that we will be set up to fail.

Huge funding gaps will appear across the public spending programme and we will be forced to rely to a greater degree on private finance to develop investment in essential infrastructure.

I believe that we should have the confidence to take responsibility for these issues.

I believe that we can use these powers responsibly to generate revenue, for example through a plastic bag tax for targeted action, for example to support our indigenous businesses.

The North of Ireland's economic performance has in the past and continues to be poor in comparison to the rest of Ireland and compared to Britain.

It is not just political instability, deep societal divisions and over 30 years of conflict and deep patterns of discrimination and disadvantage has resulted in the lack of economic development.

There are deeper problems - exasperated by an artificial border - the real cost of division on this island.

The local economy has an imbalance when it comes to the contribution of the public and private sectors to economic activity.

Inward investment is sluggish and the growth of indigenous business is low-key; Employment is now concentrated around the service sector (with low paid, low skilled, low job security jobs).

These are facts that highlight the scale of the problem.

Public spending is responsible for 63% of our gross domestic product.

Economic output here is about 20 per cent below the British average, and has also been falling steadily behind the 26 counties.

Low unemployment figures of 4% conceal the fact that the levels of economic inactivity are far higher; the number of people on incapacity benefit is 74% higher than average.

While university graduates leave in droves exasperating the skills deficit.

Clearly we need the tools to do something different.

The case for a differential tax treatment in the North of Ireland rests upon the fact that existing policy measures are inadequate.

While there can be no doubt that the lowering of corporation tax is important to the economy, and a level playing field on the island of Ireland would go a long way towards attracting and sustaining Foreign Development Investment we need to do more to deliver investment in people, in skills and in infrastructure.

I also believe that initiatives such the common marketing of the island of Ireland to investors (in key areas such as Agriculture and Tourism for example) and the opening up of the debate around the benefits of the merging of Invest NI and the IDA would see a single inward investment agency and a move towards effective marketing.

But that is for another day and another debate.

The bottom line is that local politicians should be the people driving forward the agenda of change not the British Treasury ministers.

It should be noted that this debate is not solely about the issue of income tax.

We need to cast the net wider.

We need to be bold in our approach and look at other aspects of such as targeted tax reliefs - for example for indigenous business, for rural businesses - for the manufacturing sector, for the Small and Medium Enterprises (SMEs).

Many have reached the view that Tax-varying powers could also help offset investment problems created by industrial de-rating.

We could look at initiatives such as a plastic bag tax or other 'green' levies, some of which - such as the plastic bag tax - have been successful in the south.

We could also look at taxes on inheritance, real estate, gambling and vehicles.

A crucial aspect of strengthening enterprise is the nurturing of new businesses. Part of this nurturing should involve lightening the financial burden of these businesses during their start-up period

A system of tax relief for new businesses on the basis of a compulsory, agreed and accountable action plan for to businesses particularly those which locate in NTSN areas.

Our Party are not alone in seeking much greater fiscal freedom; in wanting the Executive to have Tax Varying Powers. We also want to see an Executive with the ability to develop an Executive Borrowing Facility.

These fiscal freedoms can unlock our potential to set our own funding priorities. They would also be an essential component developing a radical plan of action to tackle deprivation and ensure long-term economic development.

Without them we will be set up to fail. Huge funding gaps will appear across the public spending programme and we will be forced to rely to a greater degree on private finance to develop investment in essential infrastructure.

There are many tough choices facing us. Without moving to develop greater fiscal freedom and strengthening the local economy we will face many difficulties ahead.

I would therefore ask that this motion is supported.

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