Dr Stephen Farry MLA stated:
“I can welcome this report insofar as it goes, but it is critical to appreciate that this review had a very limited terms of reference.
“This report is essentially a peer review of the existing policies of the Northern Ireland Executive and the potential for further developments within the existing and flawed external framework imposed by the UK Treasury.
“The Varney I report had been the opportunity to review the particular circumstances of Northern Ireland and to adjust taxation policy accordingly. The first report offered nothing, and only received a token challenge from our Executive. In the fight for a differential rate of Corporation Tax, the Executive surrendered.
“It is important to note therefore that the proposed policy changes can only have minimal effect within a context in which, Sir David Varney himself, does not foresee any meaningful productivity convergence between the Northern Ireland and the rest of the UK.
“The Treasury continues to view the UK economy in simplistic terms, protecting the dominance of London and the South-East of England, with little concern for regional balances. 9 out of 12 UK regions are net recipients of fiscal subventions, with Northern Ireland the extreme case. Varney has already stated that it should be sufficient for Northern Ireland to continue to receive its share from the overall success of the UK economy, through the Barnett Formula. However, this situation is neither economically nor environmentally sustainable.
“While there is fresh talk of co-operation between Northern Ireland and the Republic of Ireland, , there is little appreciation of what is now the reality of an all-island economy, in which the Republic of Ireland continues to outpace Northern Ireland. Northern Ireland is at a distinct competitive disadvantage within the context of the all-island perspective.”
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