Policy paper

2010 to 2015 government policy: Northern Ireland economy

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/rebalancing-the-northern-ireland-economy Current policies can be found at the GOV.UK policies list.

Issue

The UK government and Northern Ireland Executive have a shared goal of rebalancing the Northern Ireland economy to increase the size of the private sector and stimulate faster economic growth. A large number of economic policy responsibilities are devolved to the Northern Ireland Executive, but the UK government has a significant role to play.

Actions

New proposals to rebalance the economy

Northern Ireland is benefiting from the action taken at national level to reduce the deficit, boost our competitiveness and help with the cost of living. The government recognises that Northern Ireland has a particularly weak private sector and remains far too reliant on the public sector. That is why we are examining further proposals to rebalance the Northern Ireland economy and revitalise the private sector.

By 2014, UK corporation tax will be reduced to 21%, the lowest of any major western economy. This will help attract investment and stimulate economic growth. We are considering proposals to devolve the power to set corporation tax rates to the Northern Ireland Assembly, following a consultation in 2011 and the work of a Joint Ministerial Working Group in 2011 and 2012 (see background, below). The government hopes to set out next steps on this shortly.

Investing in Northern Ireland’s transport, flood defences and water infrastructure

As part of our infrastructure investment plan, we are investing an extra £132 million in Northern Ireland’s infrastructure.

Devolving power to set air passenger duty rates to the Northern Ireland Assembly

We are devolving to the Northern Ireland Assembly the power to set Air Passenger Duty rates for direct long haul flights departing from Northern Ireland. This will protect the important direct air service to the US, and offers a chance to develop more long haul services to support business and tourism.

Stimulating inward investment in Northern Ireland

We are working with the Northern Ireland Executive to stimulate inward investment.

Northern Ireland is a leading location for sectors including financial services technology and the creative industries. Over 700 foreign investors have chosen Northern Ireland because it is an excellent place to do business, benefiting from a competitive environment, highly educated workforce and reliable infrastructure.

As part of our efforts to stimulate investment, the Prime Minister has tasked UK embassies in emerging economies to promote jobs and growth in Northern Ireland.

Helping make Belfast and Derry/Londonderry into ‘super-connected cities’

We’re giving funding to help Belfast and Derry/Londonderry become ‘super-connected cities’ by installing super-fast broadband and expanding mobile coverage on important roads.

Background

We announced extra investment in Northern Ireland’s transport and broadband networks as part of the 2012 budget and the 2012 autumn statement. The Northern Ireland executive will also benefit from an extra £132 million of capital spending.

We consulted from March to October 2011 on proposals to stimulate economic growth in Northern Ireland, including a proposal to devolve the power to set corporation tax rates to the Northern Ireland Executive.

We received around 400 responses to the consultation. We published a summary of responses in December 2011. Around 75% of those who responded were in favour of the proposal to devolve the power to set corporation tax rates.

In October 2011 we announced a joint ministerial working group, including ministers from the UK government and the Northern Ireland Executive, to consider the issues raised in response to the consultation. The group held its first meeting in December 2011 and concluded its work in October 2012. We are now carefully considering the group’s conclusions.