Stephen Farry stated: “The conclusions from the Varney Report have huge implications for the future capacity of devolution in Northern Ireland.
“Its underlying message is that London and the Southeast of England are to be protected as the main drivers of the UK economy, and the rest of the regions will be subsidised from the proceeds of growth. Rather than give the regions the tools to compete, they are to be left in a situation of financial dependency.
“The imbalances in the UK economy are considerable. Despite the economic growth of recent years and the fall in unemployment, the value of the Northern Ireland economy remains stuck stubbornly at around 80% of the UK average. Furthermore, our economy is comparatively small, with two-thirds of economic activity being linked to the public sector, and almost half of public expenditure coming from a fiscal subvention.
“This imbalance between the UK regions is unsustainable both economically and environmentally. It is a particular problem for Northern Ireland given our close proximity to the extremely successful economic in the Republic of Ireland.
“A differential rate of corporation tax was only ever going to the means to an end, that end being closing the productivity gap with our neighbouring economies and allowing Northern Ireland to compete more effectively within a globalised economy.
“Today, it is not clear how our Executive envisages making that step-change in the economy. The Varney Report concedes that the current tools at the disposal of local policy-makers can only deliver incremental change. The recent budget, which was billed as a programme for economic growth, is rather a platform for a low-tax economy. There is a difference.
“Our economic, and indeed our society, needs to be placed on a much more stable and sustainable basis. In the wake of the disappointing, but not unexpected outcome
“It is critical that the Executive makes a statement urgently when the Assembly returns from its recess as to what steps will now be taken to facilitate a step-change in the local economy and challenge the huge financial dependency of Northern Ireland on the rest of the UK economy.”