Examination of Witnesses (Questions 294-342)
Q294 Chair: Thank
you very much for joining us this afternoon. Could I perhaps
ask you very briefly to introduce yourselves? Tell us a little
bit about your work, and then perhaps we could ask a few questions.
Ken Redpath: My
name's Ken Redpath. I'm the current Chairman of the Belfast City
Branch of the FSB. I've been a member of the FSB for 12 years
and, naturally, I'm a small business owner.
Roger Pollen: I'm
Roger Pollen. I am Head of External Affairs, so I'm the senior
staff member for Northern Ireland for the Federation of Small
Businesses there.
Q295 Chair: As
you know, we're conducting an inquiry into the different levels
of corporation tax in the UK and Ireland, and the impact that
may be having on Northern Ireland. We're delighted to welcome
you here so that we can get your opinions. Perhaps I could start;
I understand that you generally do support a reduction in the
rate of corporation tax to benefit Northern Ireland. Why in particular,
if it's not too obvious a question, are you pressing for that?
Roger Pollen: The
benefits of a lowtax economy are well known. We haven't
surveyed our members yet specifically on corporation tax in Northern
Ireland, or we haven't got the results of that. Currently, we
have a survey going out to all 8,000 members; it will be going
out this week, but it's also gone out to about half of them electronically.
The initial results that are coming back from that show that
a significant majority are in favour of a reduction in corporation
tax.
Q296 Chair: That's
a fairly early assessment, is it?
Roger Pollen: We
haven't gone out to detailed survey to date, because the issue
of what questions we would be asking is such an undefined area.
You could ask in general terms, "Are you in favour of a
reduction?" but it's the detail that lies behind that that's
more interesting. To a certain extent, we're watching how the
debate evolves, but I think it's fair to say that the membership
as a whole recognises that a lowtax economy would be much
better for a business to operate in.
Ken Redpath: The
initial feedback at the moment from our members is that 63% would
be in favour of a lower corporation tax. In Northern Ireland,
we have approached an abyss, in some respect, and we have to do
something dramatic—maybe that's too strong a word—to
rebalance the economy in Northern Ireland. As you know, we have
been too reliant on the public purse, and something radical has
to be done to try to rebalance this. Obviously, with the cut
in public expenditure that is looming, a certain sector of people
from the public service are going to have to be reemployed in
the private sector, and the private sector at the moment would
not have that capacity to do that without some boost from Government.
Lower corporation tax could be seen as a way of providing that
boost to get the economy moving and to take up the slack from
the public service.
Roger Pollen: One
of the other reasons that there's general favour for it is that
where you get corporation tax relief, it can affect anybody who's
making a profit under that regime. If you try to assist by giving
grants, there will inevitably be a lot of people who don't find
themselves eligible in some ways, so that's a much more targeted
approach. Obviously, where you have a target, you have a lot
of things that don't get hit by it, so corporation tax is a way
of creating an environment in which anybody who is making profit
can benefit from it.
Q297 Chair: Sorry,
I should have asked this at the beginning: could you just remind
us what size of business your organisation would cover?
Roger Pollen: We
cover micro, small and medium size, medium size covering up to
about 250 employees. As you know, in Northern Ireland there are
very few firms that are up to that size, so the vast majority
of ours would be micro-businesses, which is 10 employees
and under.
Q298 Gavin Williamson:
I thank you, as the Chair did, for coming along here today. If
there is a lower rate on corporation tax, because of European
rules, there'd be a reduction in the amount of money that would
go to the Executive in Northern Ireland, so there'd be less money
for the Government in Northern Ireland to spend. Do you think
the benefits of low corporation tax will outweigh the loss in
additional revenue and public expenditure?
Ken Redpath: Yes,
I do, actually. It may take some time for that to actually show,
because a lot of mechanisms would have to be put in place, but
on the loss of the block grant, coming in to equal that, we are
hoping, and I think there are statistics to prove it, that we
would see a gain in business activity; people would have more
money and companies would hopefully have more money to employ
extra people and invest, so it would help to stimulate small businesses
to create a shortfall.
Q299 Gavin Williamson:
How long do you think it would take for that sort of benefit to
start to be fed through into the economy?
Ken Redpath: That
on its own could take a year or two. I wouldn't say it would
be immediate.
Roger Pollen: As
I understood it—I ask for your guidance on this—I
wasn't aware that it would be a reduction in the block grant.
I understood that it would be a repayment of the loss of corporation
tax. Are you suggesting that the grant itself would be shrunk
first?
Gavin Williamson: Yes.
Chair: It's something
that we have yet to look into in more detail, but that's as we
understand it at the moment.
Roger Pollen: What's
interesting from our perspective is that the block grant, the
settlement if you like, has been regarded as being sufficient
to perpetuate the status quo. Okay, the block grant is being
shrunk across the various devolved territories proportionally
to the reductions in spending here, but if you're looking for
a game changer, that has to come outside of just the status quo.
In some way, if you're looking to create a taxation environment
and a business environment that will get a transformation from
where we have been for a long time, which has been unsustainable,
to where, over time, the Chancellor wants to see us go—and
the Secretary of State, yourselves and so on—there has to
be some additional aspect to how that will be approached, rather
than simply saying, "Well, we must get this game changed
within the current shrinking resources."
Q300 Lady Hermon:
I wonder whether I could just ask what evidence you could give
to the Committee this afternoon that a reduction in corporation
tax would create jobs. What evidence is there that reducing corporation
tax guarantees jobs?
Ken Redpath: We
can only relate possibly to the Republic of Ireland and how it's
transformed their economy over the last number of years.
Lady Hermon: Yes?
Ken Redpath: Yes,
because that's the only example you really have directly.
Lady Hermon: Under present
circumstances, I'm not sure—
Ken Redpath: I'm
basically talking historically. None of the big multinationals,
the American companies, have suddenly decided today to up and
leave. They're staying on in the Republic of Ireland, are they
not? Or it appears that they're staying on in the Republic of
Ireland.
Lady Hermon: Not all of
them.
Ken Redpath: There
are some; I appreciate there may be other reasons as well why
they may be leaving the Republic of Ireland. I think they're
going to retain the vast majority of the multinational investment
that they have in the Republic of Ireland. The reason they're
going to continue that is because of the low rate of corporation
tax.
Q301 Lady Hermon:
May I just ask, then, when you're surveying your members—you
haven't already done so in detail—will it be possible for
you to ask your membership if it is their intention, if corporation
tax is reduced, to recruit and to commit themselves to recruit
some people? It seems to me that in your evidence you have advocated
a reduction in the public purse, and taxpayers pay for a lot of
business activity in Northern Ireland. Could you commit yourselves
to asking in the survey if small businesses would actually recruit
more people?
Roger Pollen: There
are a number of issues to unpack here. One of them is that, looking
back to the Republic again, I think it can't be challenged that
the reduction in corporation tax did transform the economy there.
What happened after that was due to other circumstances—regulation,
lack of regulation and controls and so on. We've seen that in
lots of economies around the world, not just in the Republic.
In terms of the importance of the reduction of corporation tax
in reviving the economy there over the last 20 years, it
was a game changer there, to use that phrase again.
In terms of asking businesses to commit into the
future, looking at the statistics, there are about 38,000 small
businesses in Northern Ireland that have employees. There are
lots of businesses that don't have employees or that are sole
traders. There are about 38,000. If you could create the circumstances
in which each of them would take on one employee, you can then
quite easily see how that sits alongside the 56,000 or so claimants
at the moment. It would be dramatically helpful in rebalancing
things and so on. To look ahead and say you can get a projection
or you can get a commitment from small businesses to create new
employment is pretty much impossible. You've got to create an
environment and a climate in which they can operate and then see
what follows from that.
Ken Redpath: As
you know, I am a small businessman. I am incorporated and I do
pay corporation tax, I'm glad to say, so how would I treat a reduction
in corporation tax? Obviously there would be more liquidity in
the company. It would incentivise me to invest and probably to
take on extra staff, so there would be that influence.
Q302 Gavin Williamson:
Mr Pollen, we touched on, and you questioned me a little bit about,
where the money would come from. According to what's called the
Azores judgment, if, let's say, the cost of reducing corporation
tax was hypothetically £150 million, that would effectively
have to come out of the budget of Northern Ireland, to the value
of £150 million. Do you think that would be a worthwhile
tradeoff? Secondly, if you were playing Chancellor of the
Exchequer, and bearing in mind that obviously the amount you cut
off corporation tax would have to be balanced off, in terms of
paying for it, what sort of rate would you be interested in setting?
Roger Pollen: That's
specifically what we haven't yet asked our members—those
rates. The obvious one that a lot of people are referring to
is 12.5%, because that's what the nearest neighbour is and that
would be having a wholeisland approach. Another argument
would be, in business, do you just try to match your competitor,
or do you try to beat them? That's another approach, and I think
that's a debate that the Assembly would then want to take on board.
I think the first principle is for the Assembly to have the powers
to get the debate moving further; I think that's what we're really
focusing on here. I don't think the reduction in corporation
tax on its own is sufficient. That is the one that will work
probably on an international basis, in terms of foreign direct
investment. That's the attractive carrot, but it's the whole
package of other measures that will go alongside it. Streamlining
of the planning system, for example, is within devolved powers
but it's a key element to improving the business environment in
Northern Ireland, but it's one of half a dozen that we could reel
off that our members have identified as being of key importance
to them, alongside corporation tax—it is not one or the
other.
Chair: I think we're probably
going to come to those issues in a moment.
Q303 David Simpson:
Roger and Ken, you're very welcome to the Committee. We're all
well aware of the Varney Report and, to quote the figure that
Sir David Varney has mentioned, he said that there would
be a £300 million tax revenue shortfall. He also criticised
or questioned the ERINI methodology and suggested the increase
in foreign investment was overplayed because of the corporation
issue. He said also that a clear and unambiguous case for a 12.5%
rate of corporation tax cannot be met. Also, the Northern Ireland
Economic Reform Group has said that it is "without exaggeration,
the only means we know of comprehensively changing the economic
environment, within a timescale of years rather than decades",
so we have two organisations at odds with each other.
You will be very much aware of the figure that we're
talking about—£300 million or £250 million.
That will come out of the block grant; there's no question of
that. That has been made very clear. I'm a businessman in Northern
Ireland myself; I wear two hats. As a businessman, I would like
to see corporation tax being lowered, but as a politician, I'm
responsible to a whole constituency of business people. I have
to be sure that we're over all the humps. In asking John Simpson,
the economist, at the last meeting where he would put corporation
tax on a blank sheet of paper from one to 10, he said seven; there's
a lot more important things from one to seven that we need to
achieve before we get to corporation tax.
The Manufacturing Focus Group was a fantastic organisation;
it managed to squeeze the Executive to cap the rates at 30% for
manufacturing. How would your organisation feel if, in order
to fill the gap of £300 million, the business and commercial
rates had to go up to fill that gap? Remember this: you did say
that the majority of your businesses were small micro-businesses.
I'm only suggesting this, but if the commercial rates of companies
and small businesses had to go up to fill that gap, what would
they feel about that?
Roger Pollen: You're
robbing Peter to pay Paul, and you're not going to get a game
changer, so what's the point?
Q304 David Simpson:
As business people—and I'm only asking the question and
trying to tease answers out; that's the whole idea of this Committee—what
would you suggest?
Lady Hermon: In other
words, what you're really asking—forgive me for paraphrasing—is
this: on a scale from one to 10, where would you put corporation
tax?
David Simpson: That's
correct. It's the same question as was put to John Simpson.
Lady Hermon: How important
is it really to the Federation that you represent?
Ken Redpath: It
is an important factor. There are many issues, as you know, at
the moment.
Q305 David Simpson:
To you, Ken, it's an important factor, because you've said, "I
pay corporate tax," but is it important to somebody on the
high street who is a smaller business who is not in that position?
I'm not trying to be smart in saying this. I'm trying to tease
it out.
Roger Pollen: I
absolutely understand that. I think what we're looking at here,
with respect, is that to put it at point seven on a scale of one
to 10 is simplifying an argument that is much more complex than
that. The majority of small businesses in Northern Ireland are
not currently incorporated; that's one factor. If you were doing
something that was going to bring in a lot of increased foreign
direct investment, as the Irish Republic did, the small business
sector will benefit enormously from that—all of the supply
services and so on that go along with that. By making one change
that doesn't directly affect that sector, it will indirectly affect
it enormously. I don't think you can simplistically put on a
graph a point at which you say, "That's less important than
these others," because ideally you are looking at a much
more comprehensive mix of solutions.
Q306 David Simpson:
What you're saying is that you don't believe that the small business,
micro-businesses, should be penalised for the sake of the larger
companies.
Roger Pollen: Definitely
not.
Q307 Oliver Colvile:
Can I get some basic facts and figures? You have around about
8,000 members.
Roger Pollen: Yes,
in Northern Ireland.
Q308 Oliver Colvile:
How many of those are actually incorporated and how many of them
are limited companies?
Ken Redpath: I
would say that most are not incorporated.
Q309 Oliver Colvile:
What are we talking about—90% not incorporated?
Roger Pollen: No,
the majority are unincorporated, but it's probably 60/40.
Q310 Oliver Colvile:
I have to declare a slight interest here, in that I'm a member
of the Federation of Small Businesses. I'm also a member of the
Institute of Directors as well.
Lady Hermon: Someone's
wearing two hats as well.
Ken Redpath: And
you pay your fees?
Q311 Oliver Colvile:
Don't worry, I pay my dues. I've just had my card through from
the IoD yesterday. It's all up to date and everything like that.
What I was going to ask you is this: when I made the decision,
for a whole series of different reasons, that I had to end up
setting up a limited company, it was because of two reasons.
One is because the then Government introduced a 10% rate of corporation
tax, which encouraged us all to go in and do that. It was a very
effective way of running one's tax liability stuff, and I think
that was very interesting. Subsequently, when it went up, and
up to the level it is at now, that became less attractive. I
can understand why HMRC or the Inland Revenue were interested
in doing it: it made it easier to put the foot on the ball and
make sure it didn't go very far, and it was much more easily identifiable.
Have you found that the whole process has had a knockon
effect in Northern Ireland as well?
Ken Redpath: Yes.
Some years ago, corporation tax under Chancellor Brown meant
that the first £10,000 of profits were not taxable, so there
was a rush to form limited companies at that particular time,
so that people could avail themselves of it. One of the reasons
the Chancellor went for that was to get as many people as possible
or as many businesses as possible recorded as limited companies,
so that he could have more control over them. I think in some
respects this could also happen on this occasion; you would get
a lot more control, maybe, over companies if there are more incorporated
because of corporation tax, if that's what you're getting at.
Q312 Oliver Colvile:
Yes. I assume the other thing that would happen is that there
would be a shift by those people who are paying a certain amount
of tax as sole traders to become incorporated. That would increase
the incorporated part of the tax take and reduce those people
who are selfemployed.
Ken Redpath: Yes.
Q313 Oliver Colvile:
Do you think that this campaign, which has been very effectively
run, to lower corporation tax is principally aimed at the multinationals
and trying to attract them into Northern Ireland?
Ken Redpath: Initially,
yes, because by attracting the multinationals, there are many
knockon effects with other services, which a smaller business
community can feed off.
Q314 Oliver Colvile:
So encouraging more multinationals to come in has been a success
for the small-business movement within Northern Ireland, because
they have been able to have, for want of a better expression—it
may sound incredibly rude—the crumbs off the table or the
bits of things that come down, and that's cascaded down?
Ken Redpath: Yes.
The more multinationals you have, you expect more trading to be
done entirely within Northern Ireland, through services, supply
of goods, engineering, et cetera. There will be a spinoff
from that, I would say, yes.
Q315 Mel Stride:
Welcome to the Committee. Just following on from what Oliver
Colvile was saying, if you look at the Northern Ireland business
economy, it's largely made up, in terms of numbers at least, of
small businesses, the kind of organisations that you represent.
If you look at the profit profile of those smaller companies,
I'm assuming you're likely to see a smallish proportion that do
extremely well, but a large number that are kind of doing okay
and making small profits. Then we look at lowering corporation
tax and we look at where the impact is going to be felt. It would,
under that scenario, largely be of benefit to the larger companies—the
utilities, et cetera—and of far less benefit to the small
organisations that you're representing. Will it follow that,
in a sense, the smaller companies are disadvantaged by using money
in this form—that is, by lowering headline rates of corporation
tax? What perhaps we should be looking at is more payroll taxes,
particularly if we want to encourage employment.
The other part of my question would be another downside
that has been put to us as a Committee in terms of lowering corporation
tax, which is the socalled deadweight effect. While we're
trying to use that as a mechanism for bringing in FDI, the reality
is, under EU state aid regulations, it has to apply to everybody,
and therefore it's not just those who are bringing in that benefit
but the existing companies that get a windfall gain. I'd really
value your comments on those two issues, please.
Roger Pollen: I
think that the expectation would be that those indigenous smaller
companies that get a windfall gain, as you put it—effectively
an unexpected investment in them by the Executive—would
be much more likely to go on and increase their employment, take
on additional employees and expand their businesses. That's been
the general finding, or there has been survey work that has suggested
that people would take on additional employees if the costs of
doing so were reduced. One of the ways of reducing them would
be to take less tax off them; there are others, such as national
insurance holidays, that are worth considering.
To go back to this question about the stated aims
of trying to rebalance Northern Ireland's economy, if you try
to do it within the existing resources and you try to do an element
of it by increasing taxes there, whether it's through rates or
whether it's through payroll tax, or whatever else, and you try
to take more money out of the existing system to try to pay for
improving it, it's very unlikely to succeed. There's a rebalancing
that needs to be done. The vast majority of businesses in Northern
Ireland are very small businesses, which shows there's a lack
of large businesses. One of the objectives has to be to try to
develop or attract more large businesses, so that you have a better
balance across the economy, because it's those large businesses
to which a lot of other smaller businesses will provide goods
and services. It has to be something that will change the balance
that's there at the moment.
Q316 Mel Stride:
Just on that point, your argument for lowering corporation tax
would be more to do with attracting larger companies in and changing
that element of the mix than encouraging and sustaining the small
business community that you represent; would that be right?
Ken Redpath: They
would indirectly be sustained by that action. By encouraging
larger companies, it would feed down the chain to small businesses,
stimulating them to create profit, and maybe bringing more of
them into the corporation tax net than were there before.
Q317 Mel Stride:
Can I quickly switch to Invest NI for a moment? Do you feel that
they are adept at encouraging entrepreneurship and new small business
startups in Northern Ireland?
Roger Pollen: About
6,000 new businesses start up each year in Northern Ireland.
If you look at them, measuring them after three years and after
five years, there's the highest survival rate of small businesses
in Northern Ireland anywhere in the UK. There's clearly something
about the environment or the support that's offered in that environment
that is succeeding better there than elsewhere. Surely then the
objective has to be to move that from 6,000 to 9,000, or to increase
it in any case. If there's a proven track record of being able
to sustain that establishment of businesses in the longer term,
then that's an area to focus on. Invest NI, I think, have been
very good at offering a lot of support through various resources—websites,
information and so on—that I know a lot of small businesses
avail themselves of, so I think they have been good. Could they
be better, is that the question?
Q318 Mel Stride:
Specifically, with the independent review of economic policy that's
just come through, do you think there have been any improvements
recently as a consequence of that?
Roger Pollen: One
of the things that are coming back to us from a lot of small businesses
is that there are over 200 sources of business advice for small
enterprises in Northern Ireland. Now that's confusing. 200 places
you can go to get advice if you're running a small business or
want to set one up. In one of our surveys recently, we asked
how useful it would be if a small advice business centre, with
trained staff who could provide business advice and refer people
to other agencies, were to be established. Now, I accept these
results are still to be finally analysed, but 73% have indicated
that that would be either quite useful or very useful to them.
In other words, there should be a much smaller array of sources
of quality information and advice than currently exists. I think
there is an opportunity and a need to sharpen up the advisory
environment that's there.
Ken Redpath: There
are too many. There are local councils, local enterprise agencies,
Invest NI and others. It is confusing for the average man on
the street to know exactly where to go. They think, "I'll
go to Invest NI," only to be thrown down the chain again,
so there needs to be a refocusing slightly of that by Invest NI.
To date, yes, they have done a good job and they've brought some
very highprofile jobs to Northern Ireland, Citibank being
one of them recently. They've increased their number substantially.
They're focusing now on bringing better highvalue jobs
to Northern Ireland, which will pay better wages. Some of the
call centres in the past, of course, have been low wage, and it
hasn't necessarily helped the economy in Northern Ireland, because
we want higher wage earners.
Q319 Naomi Long:
It's good to have you at the Committee. A number of Members have
already touched on the issue of windfall gains and the potential
that has to be a bone of contention in reducing corporation tax.
There would be companies that, doing nothing differently from
what they're doing today, would end up gaining from that. In
particular, for example, the banks and some of the large utilities
could make a windfall gain from a reduction in corporation tax,
without any step change in their delivery or job creation activity.
In probing this with the Finance Minister and indeed with a number
of the economists who have given evidence, most people seem to
agree that this would have to be applied uniformly and there would
be very few options for clawback. It would be a cost that would
have to be borne. How would you and your members feel about that?
Roger Pollen: I
think asking members how they feel about banks is a big subject
on which we could spend quite a lot of time, and it may take us
on to another area of interest within this discussion.
Chair: It's not part of
your survey, then.
Roger Pollen: It
is, actually; we just haven't got the answers yet. The issues
haven't yet been fully explained to the small business sector
sufficiently well for us to be able to go out and get a satisfactory
view from them. There would be great concern obviously if, on
the one hand, the banks appear to be making lending very difficult
to the small business sector and, on the other hand, are being
subsidised by the Executive. That is, to be honest, a detail
that will emerge, I suspect, once we get some information coming
forward on how this process might actually be able to be applied
in practice. At the moment, we're commenting in the absence of
hard facts. As you say, there are a lot of views on it.
Q320 Naomi Long:
I have to say that all the views would agree that it would have
to be applied uniformly. It couldn't be applied differentially
between existing and new business, for example; it would have
to be applied to all businesses that were liable for corporation
tax. I'm raising the issue specifically because I'm aware of
the difficulties that many small businesses are having in terms
of being able to access lending and so on, particularly in what
is a very constricted banking market in Northern Ireland. It's
just that the banks could be a major beneficiary of the reduction
in corporation tax, as could some of the large utilities, but
without having to create more employment or have any other strings
attached, in terms of, for example, assisting small business.
Foreign direct investment does, if you like, have a trickledown
effect to small business and does have a knockon effect,
but that wouldn't necessarily be the case in those two sectors.
I just wanted to probe whether your members had given that consideration.
Ken Redpath: We
don't have an answer at the moment, because we haven't raised
the question. Some of the big utilities probably do mitigate
their tax anyway, by moving offshore and things like that. Maybe
the Exchequer is losing some tax at the moment, which maybe they
could get the utilities paying, keeping all their tax in Northern
Ireland.
Roger Pollen: The
question in some ways would surely be: is it worth the advantages
to all of the rest of the economy and the sector to deny the banks
that opportunity? In other words, you think it would be good
to stop the banks getting that benefit, but the cost of stopping
them getting it is actually damaging to the rest of the sector
that you're trying to sustain. It might then fall to the Executive
to try to look at other opportunities for drawing in additional
revenue from the banks and utilities that have benefited from
this, keeping the playing field level on corporation tax, but
finding other ways of making them contribute better. Ultimately
you would also have to say that a healthy banking sector is good
for business. I appreciate the point you're making about their
not being able to attach strings to it, but a healthy banking
sector is essential because, at the moment, we're not seeing a
healthy banking sector and businesses are suffering as a result
of it.
Q321 Naomi Long:
Just to explore further, in terms of job creation, Ken, you mentioned
that it would create liquidity in your business and you would
therefore be more predisposed to expansion, job creation and so
on. In the FSB survey of members—the published version
that we have—it was mentioned that in Northern Ireland people
actually expect to employ fewer staff in 12 months' time
than they did at the point when the survey was taken, as opposed
to the rest of the UK, where people were detecting the opportunity
for recovery. Would something like a change in corporation tax
and so on offset that, or would it do more than that? Would it
potentially be an incentive to drive the recovery forward?
Ken Redpath: Yes,
a lot of the small businesses, as you say, probably are marginal.
In these economic times, they are talking this way. I think
it's the general talk; everybody's talking about reducing costs,
reducing staff. If they were able to retain some extra profit
in their business, as I said before, I think it would help incentivise
them to think about not talking it down but possibly talking it
up for a change. There is a lot of talking things down at the
moment, and we have to get a bit away from that sort of mindset
and give a stimulus to people talking up for a change. We have
to be more positive, which may come with a change in corporation
tax. Most small businesses I hope would employ extra staff if
they did get a change in the corporation tax, because they would
have something more to play with in their business. If there's
something else added along with that—I don't know whether
they could tinker a wee bit with NIC or something else—that
would give them that stimulus, maybe to create that extra job,
instead of reducing a job.
Q322 Naomi Long:
Just to explore that one step further very briefly, a number of
the people who have given evidence have suggested that, whilst
corporation tax may be beneficial, it is not a silver bullet to
resolve all the problems in the Northern Ireland economy. Given
that that's the case, most people are saying that it would be
useful as part of a package of measures. Given that you represent
small and mediumsized enterprises, which are predominantly
the businesses in Northern Ireland, what other measures would
you want? You mentioned planning already as one area where you
would want to see reform but, if you were to make up the package,
what else would be in it, in addition to planning and corporation
tax? [Interruption.]
Roger Pollen: I'm
sorry.
Kate Hoey: Small businesses
can never turn their phones off.
Roger Pollen: I
actually did; it's obviously very important. Apologies for that.
Beyond corporation tax, there are other bits we've touched on—other
tax breaks such as rates relief and flexible capital allowances.
The Assembly's already introduced a small businesses rates relief
programme. We'd like to see that go much further. That's been
helpful, but I think it could be extended and could deliver more.
Looking at the early results of the current survey that's going
out—I think it was the 2009 one you referred to—58%
of members are saying that they would like to see savings on employment
costs, and national insurance holidays. What we haven't looked
at yet is whether there is scope for considering that in a way
of driving a degree of social change, so that you get actual direct
subsidy to get to people who have been longterm unemployed
and so on, and use small businesses to target that and treat that
as a separate entity, not unrelated to the enterprise zone ideas.
We touched on planning regulations. Assistance with staff recruitment
is one thing that comes back as being something that small businesses
would like, and assistance with employee training is another.
If you've got a small business and you need to put in place training
programmes for your employees to upskill them and to allow your
business to perform better, the difficulty of doing that yourself
can be quite significant.
Ken Redpath: I
agree that corporation tax solely on its own is not the magic
bullet. It can be the headline to encourage other lesser but
beneficial things to happen, as Roger was telling you, on planning,
possibly NIC and other associated things that would help business
stimulate business on a day-to-day basis. But, yes, it's not
the top thing, and it is not that if we don't get that it's the
end of the world, but it is a big, big help.
Roger Pollen: The
other thing that is coming back from the early results of that
survey is research and development incentives. That's somewhere
where Northern Ireland recently has been performing well. I think
2009 recorded the highest ever R and D spend, up 40% in cash terms.
That shows what tax policy harnessed to effective and targeted
Government action can do to drive beneficial change. A lot of
companies in Northern Ireland are well placed to capitalise on
that. Coming back to Invest NI support, there's a good basis
in terms of the science park, universities and so on like that.
Again, finding a way of putting direct and meaningful change
in there would be very helpful.
Q323 Kate Hoey:
I'm a great supporter of the Federation of Small Businesses right
across the UK, and you're obviously affiliated to the overall
national Federation. As a London MP who's got lots of businesses,
some of them in great difficulty, how would you feel, as part
of that national organisation, if Northern Ireland were to be
treated differently? I have a lot of constituents who already
think Northern Ireland gets far too much support. How would you
feel if, in the end, Northern Ireland ended up with a much lower
corporation tax than the rest of the United Kingdom?
Roger Pollen: I
think that we would be delighted; however, we would see it hopefully
as a pilot, so that if it succeeds there, it might be reversed
back to where the rest of our membership is active. I know we
had beneficial treatment in terms of the national insurance contributions
holiday that was announced in the Budget in June, which was done
on a regional basis; Northern Ireland was one of the beneficiaries,
but other places weren't. The FSB's approach was very much that
this was discriminating against the businesses in the areas that
weren't being targeted. It would always be our approach that
it's a UKwide organisation representing UKwide businesses
that are trying to operate within that environment. On our border,
we have the Republic of Ireland, which has a different tax regime,
and that is probably why we're feeling the pain of that much more
acutely than mainland GB. It's because, within a few miles, there's
somebody who's operating under a more beneficial tax regime.
I think there's a reason for that. If people are suggesting that
we've already had far too much—I know that that's a comment
that has been made—
Kate Hoey: I wasn't saying
I shared that view.
Roger Pollen: I
appreciate that. If that were the case, why hasn't it worked?
Why do we need additional assistance? Why do we need some degree
of "special treatment" at the moment? I think it's
because the circumstances that we have endured for 40 years
have created an environment, in which we now find ourselves, with
the private sector out of balance with the public sector and within
itself. The lack of large businesses there means that there is
some need for an external force to come in to change the dynamic.
After that, we're totally confident that private business and
private enterprise will take up the slack, but it needs an external
force to allow that change to happen.
Q324 Kate Hoey:
So you'd just see it as a temporary twoyear measure, or
threeyear measure?
Roger Pollen: No,
definitely not. I've spoken to industrialists elsewhere, outside
of Northern Ireland, and said, "Look, we are considering
a reduction in corporation tax here; it's within the political
discussions. Were we to do that, what would that mean to your
company? Would you consider coming here, and if not, why not?"
The answer has come back loud and clear that if there was anything
that suggested it was other than a longterm commitment,
they just wouldn't entertain it. It has to have stability and
that's why it has to have a degree of crossparty support,
and support that takes it beyond the turn of a single Assembly.
It has to be seen to be a structural change.
Ken Redpath: Any
large organisation coming into Northern Ireland would be investing
as well. They're not going to put investment in unless it's going
to be seen as more permanent.
Q325 Lady Hermon:
To quote a phrase that you've used on a number of occasions, Mr
Pollen, you see a need for rebalancing the economy in Northern
Ireland. Can I just ask both of you whether you really think
in your conscience it is fair and equitable to reduce corporation
tax for the benefit of reducing tax on profits of very large businesses
in Northern Ireland, at the expense of somewhere in the region
of £300 million coming out of the block grant to be
spent on schools, hospitals, aftercare, and looking after the
elderly? Is that, in your mind and in your conscience, fair and
equitable? How would you explain that to the people of Northern
Ireland?
Roger Pollen: The
FSB doesn't have a collective conscience. Are you asking me personally?
Q326 Lady Hermon: Yes,
I am asking you personally. Explain it to us as a Committee.
I find it very difficult to reconcile the fact that we will be
advocating a reduction of corporation tax to benefit large businesses,
many of them not members of your federation at all, at the expense
of the budget for hospitals and education.
Roger Pollen: I'm
honestly not being flippant when I say that. Your penultimate
point is interesting: that many of them are not our members.
The very fact that we're advocating it for people who are not
our members indicates the conviction we have that this is the
right thing to do for the economy of Northern Ireland. We are
sitting in Northern Ireland with hospitals built in South Down,
where the accident and emergency can't be staffed full time because
there isn't the resource there to do it. I take your point—your
suggestion is that there are even more resource now going to be
taken away to sustain business.
If you look at how you're going to change the environment
in the longer term, you have to have more money coming in, generated
within Northern Ireland. Once you get into that situation, then
you can do more and deliver more services. Until you get to that
point, you cannot continue, and it has been made clear to us that
we cannot continue with a subsidy culture, where we are dependent
on a block grant, and where we aren't capable of generating the
revenues that we need to play our part.
Chair:Sylvia, have you
finished?
Lady Hermon: I would like
to hear from Mr Redpath. He, too, has a conscience, I'm sure.
Ken Redpath: I
have a conscience, I assure you. On the face of what you say,
yes, you would think that's a bad thing to do—
Q327 Lady Hermon:
Sorry to intervene. You're the witness, and I'm sorry to repeat
the question. I just think that one of the points that has come
through on a number of occasions, when you've responded to questions
from Naomi Long, for example, was that the point hadn't really
been made when you were surveying your members. A number of points,
a number of details and the outworking of the reduced corporation
tax hadn't actually been put to your members. Am I right in that?
Roger Pollen: That's
still an ongoing exercise.
Lady Hermon: To add to
that list, I would hope that, when you're surveying your members,
you actually explain to them what the knockon effect for
the block grant to Northern Ireland will mean for wives, families
and the vast majority of people in Northern Ireland who are not
in a business—that there will be a corresponding reduction
in the block grant to be expended on schools and hospitals.
Roger Pollen: With
respect, when we survey our members we put facts in front of them
and we put questions to which we want the answers to help inform
the discussion. That would be a subjective judgment that you've
suggested we should put to them—that in order to achieve
one, we should have the other. You're saying, "The effect
of that would be to create this," and I think that's speculation.
I think that the whole point of this session and these sessions
that you've been having is that there's no settled will as to
what the direct impact of this would be. There will be a period
of change, as there always is when taxation policy changes, but
you cannot necessarily extrapolate out how that's going to impact
and over what period.
Q328 Lady Hermon:
Just to repeat a point that was made by Mr Williamson here to
my right—he was absolutely right to do so—that, according
to the evidence we've already taken, the Azores judgment in Europe
will mean that, if there is a reduction in any region of the United
Kingdom or a member state of corporation tax, there must be an
equivalent reduction in the block grant, otherwise it is an unlawful
state aid. The impact from day one, if corporation tax were to
be reduced by the Assembly—as we heard yesterday from the
Secretary of State—would be a corresponding cut in the block
grant. That is a fact. That is not subjective opinion. That
is not my expression or my conscience talking. That is a fact.
Am I right, Mr Williamson?
Gavin Williamson: You're
absolutely spot on.
Chair: Before we go too
far down this road, what you're saying, without answering the
question for you, is that that may reverse over five or 10 years.
Ken Redpath: That,
hopefully, is what the statistics will show us—that over
a period of time, it will be reversed.
Q329 Oliver Colvile:
At the very beginning, you agreed that you would welcome a lowtax
economy; you think that would be a good thing. Has anybody done
any modelling to work out how much more money may come out of
a lowtax economy, especially with corporation tax? Have
you any idea? I'll give you an example, and I banged on about
this, I have to say, during the course of the last month or so.
I watched a television programme on Channel 4 that talked
about Hong Kong and how it had reduced taxation quite significantly.
Almost immediately they had seen a very significant growth in
tax take as far as the revenue is concerned. Have you any idea
as to whether that might happen here and how that would work and,
indeed, how much extra? The other thing is how quickly you think
that there would be a stimulus to grow business within Northern
Ireland.
Ken Redpath: It
is an ongoing thing; we haven't got the answers to all these.
Roger is still surveying and we're still, as an organisation,
putting these things together, so I can't give you a direct answer
on that. As you said yourself, in Hong Kong it was shown that
reducing the corporation tax did stimulate overall growth in the
economy, and the general tax intake was greater. That's an example.
Roger Pollen: Closer
to home, within the Republic of Ireland, as we've said, the transformation
over the decades from the '90s onward showed a vast growth in
the economy by taking that decision to cut corporation tax. It's
also interesting that 50% or thereabouts of the exports from the
Republic of Ireland are from pharmaceutical companies alone.
They're multinational companies that choose to be based there
because of their corporate climate.
Q330 Mel Stride:
On Sylvia's point, very quickly: on the issue of being asked to
give your view as to whether it's right to lower corporation tax,
because of course it has to be paid for out of the block grant
and may have an effect on other areas, like health and education,
I'm assuming that you are here to represent your members and your
members' interests. You might argue that it would be for others—politicians
such as ourselves and other people and witnesses we might have—to
start to conjure with those judgments. You're here basically
to promote the interests of small business. Would that be correct?
Roger Pollen: That's
correct, and I don't think it's within our competence to make
that kind of judgment.
Mel Stride: I just wanted
to clarify that in my own mind, thank you.
Q331 Mr Benton:
Just quickly, arising out of the last couple of contributions,
if I understand the situation correctly, a healthier economy in
Northern Ireland brought about by a reduction in corporation tax
would effectively mean, if I've understood you correctly, that
the hospital that you referred to, for example, would be manned,
albeit that the wherewithal to man these, shall we say, defunct
operations would have to come from some form of taxation. Couple
that with the concerns that have been expressed about windfalls—in
other words, beneficiaries being companies that do not bring an
additional well-being factor to the overall economy. Now, if
you couple them together, it tends to suggest that, before granting
the reduction in corporation tax to any particular large or small
business, maybe there should be examination of whether the business
satisfies some criteria and has made a contribution to enhancing
the wealth of Northern Ireland. Now, is that an impractical situation
as far as small businesses are concerned?
Ken Redpath: Sorry,
just to clear this up, regarding what you've just said, are you
indicating that the large companies that would benefit—
Mr Benton: What I'm saying
is that if the Government were disposed to say, "Yes, let's
have a reduction in corporation tax in line with the Republic,"
that would mean that some companies would not do a hand's tap,
but they would be the beneficiaries of it. This applies equally
to small businesses. What I'm putting to you is, supposing the
Government were minded to do this, how difficult or how unwieldy
would it be to say to companies, "Look, here is the incentive
if you like—reducing the corporation tax—but you show
us and you indicate to us exactly, precisely, what you've done
for the general enhancement of the Northern Ireland economy,"
through increased job opportunities and all the criteria that
we've mentioned? It's just a thought, following the two previous
contributions, as I said. I wondered how difficult it might be
for small businesses to look at an approach like that.
Ken Redpath: Yes,
you're getting at the social conscience that Lady Hermon was mentioning
in relation to businesses. If they're getting the benefit, is
there some indirect way that they can give back to the community
in, for instance, health and manning hospitals? That sort of
thing could be worked out, but would need to be gone into. I'm
sure everybody's there to give good will, if they can. There's
a possibility that some structure could be worked out, but it
would need a lot of consultation and it would have to be worked
through as a model to see if it would work. It's one of those
things to explore, yes.
Q332 Mel Stride:
Just to move away from the corporation tax incentive for a minute
and look at the other incentives there might be here, do you think
that the current incentives for R and D, skills development and
perhaps IP as well are sufficiently strong in Northern Ireland
at the moment, or do you think there is scope for movement there
as well?
Ken Redpath: There
are attractive incentives for R and D at the moment. That's been
increased in recent times. The incentives are there. Of course,
everything can always be improved upon. You can always tweak
things a bit better where they may be failing. There's always
room for improvement, but I believe overall that there are adequate
incentives to do those sorts of things that you're referring to.
Q333 Mel Stride:
John Simpson suggested when he came here that lowering corporation
tax, for some of the reasons we've discussed this afternoon—the
deadweight issue, assisting existing businesses and not necessarily
therefore being used to attract new ones coming in—might
not be the right way to go. What you might actually do is focus
on things like R and D tax credits, et cetera, as a means of coming
up with an incentive that is more likely to be appealing to those
coming into Northern Ireland than to existing players, and that
is more attractive to companies that might expect to have a greater
propensity to produce jobs and actually employ people. He said—I'll
run it by you here to see if you agree with it—that the
Irish Republic might be able to say, "We have the lowest
corporation tax rate of 12.5%", but if we get all these other
measures sorted out, he said we might be able to say for Northern
Ireland, "Come to us and we'll probably make you tax-free
for five years." It's this idea of targeting using measures
other than corporation tax. Do you feel that that is something
that could work?
Ken Redpath: We
have discussed this in the past. It's the headline that we're
really after here. Those things are grey areas, if you want to
put it that way, to attract companies. What's attracted multinationals
to the Republic of Ireland is essentially the reduced tax rate,
not R and D.
Q334 Mel Stride:
I think Mr Simpson was suggesting that you'd have to move from
where we are now to another place and, in that other place, you
would have sufficient incentives in there to be able to say, as
your shopwindow statement, "Come to us and we'll probably
make you tax-free for the next five years." Would that positioning
do it, do you think?
Roger Pollen: I
don't know how many of you sell, but I think the difficulty that
certainly the First Minister and the Enterprise Minister have
said they feel is that they've gone out with a very good story
about Northern Ireland's economic prospects, the cost of doing
business there, the educated work force, the access to universities
and everything else, and they feel that the thing they are missing
in their locker, to use the phrase, is the reduced rate of corporation
tax to match the Republic. You have to look back over the past
number of years and say that, despite all of those benefits that
we have had over the Republic—lower labour costs and everything
else—they have still been the ones that attracted the FDI.
Therefore, it would suggest that that is still something that
is needed to enable the selling to go on. I think the other package
of benefits you're talking about and that John was referring to
is essential as well, as part of a mix of making it succeed, but
in terms of actually attracting people in, that would be a difficult
sell, "We'll probably make you tax-free for five years";
it's not a strong message.
Q335 David Simpson:
Gentlemen, no matter which way this works out, whether we achieve
the corporation tax lowering or not, I think there's going to
be an element of risk and gambling on all this, because there
are going to be a lot of factors that have to dovetail in. This
global economic crisis that we're going through makes it even
more difficult. In relation to the point that I put earlier,
on the comments of John Simpson, who said that corporation tax
should be No. 7, you felt that it just wasn't that simple. When
I look at the briefing notes from the Federation of Small Businesses
NI Voice annual survey, out of those surveyed, 49% of the
members said that the main priority to improve economic prospects
was to cut business rates. Second to that was bank lending, more
bank lending and lending fairly, at 41%. No. 3 was cut employers'
national insurance. No. 4 was jointly held by keeping VAT at
15% and maintaining low interest rates. Joint No. 5, which is
interesting, was increasing personal tax allowances and—this
isn't too far away from No. 7—corporation tax. Last of
all was reduced, 10% lower income tax rates; 14% surveyed said
that. The FSB NI Voice has come out with a survey saying
that corporation tax is sitting at No. 5 according to the members
surveyed, not No. 1.
Now, I do believe, and I think Naomi hit on it, that
corporation tax is part of this. As a businessman, I'm in the
same position as Ken; I detest paying tax but I have to do it.
I'm in the same position; we are in the position of paying tax.
I do believe, personally as a businessman, there are other fiscal
elements. R and D is very difficult for small companies. Small
companies like ourselves are very much handson. It's very
difficult to avail oneself of R and D, so we have to look at other
fiscal proposals. I think there is a mix, a cocktail, of fiscal
proposals that we can use. I do believe corporation tax is in
there. I'm not convinced, personally speaking, it's No. 1 on
the list.
Chair: I think that's
like one of those exam questions where the last word is 'discuss'.
Roger Pollen: The
first thing to say on that is I suspect that that, again, is the
2009 survey. At the time when that was commissioned, there was
little or no discussion of being able to devolve corporation tax,
and therefore of being able to change it in one part of the UK.
Asking that question then and now will almost certainly get different
answers. What's interesting is that a lot of the other elements
there are still consistent with what the members are saying now.
It's the package of benefits around that: it's the business rates;
it's the R and D taxation rates; it's the—sorry, you've
got it in front of you; I don't.
Q336 David Simpson:
I could be completely wrong on this now, but whenever the Manufacturing
Focus Group was involved in the Programme for Government that
has been done in the Assembly—and Naomi's nodding here—I
understood that at that stage corporation tax was talked about.
It was on the agenda. It may not have been high up the agenda,
but it was on the agenda in 2009 and well on the agenda, at that
stage.
Naomi Long: 2007.
Roger Pollen: That's
also a survey of FSB members in the Northern Ireland, the majority
of whom are not incorporated. Looking at it from a selfless point
of view, you can have one view on corporation tax—
David Simpson: Not from
a conscience point of view.
Roger Pollen: In
other words, they're sitting there thinking, "What in this
list affects me?" It they're not incorporated, corporation
tax isn't going to be No. 1 on their list. If you're saying,
"What affects Northern Ireland's economy?" then it's
a different question, to which you'll get a different answer.
Q337 David Simpson:
If it doesn't affect them—I'll finish with this, Chairman—they
would not accept the fact that they would be penalised for bigger
companies getting a reduction?
Roger Pollen: What
we're looking at and trying to draw out of our members and from
the information available is what impact it would have on small
businesses indirectly, whether they individually benefit from
it or not. They will benefit from a more dynamic economy.
Q338 David Simpson:
Really what you're saying is your members would not be happy with
banks, utilities or newspaper magnates achieving lower corporation
tax. I said that for a reason.
Chair: I think we've probably
covered that.
Lady Hermon: Could I just
add that in fact not all newspaper proprietors are in favour of
a reduction of corporation tax?
David Simpson: That's
correct.
Q339 Oliver Colvile:
One of the points made in the last five or 10 minutes was how
difficult it is for small and mediumsized enterprises to
do research and development. That's always an issue. Would you
agree that that is a problem for your members—to do R and
D and to have access to it? If that is the case—tomorrow
we will be having a long discussion in this place about universities
and things like that—is it not an idea that small businesses
could approach universities in order to get them to do some of
the R and D work for them? Would that be helpful?
Roger Pollen: I
may be jumping ahead; you may want to talk about what else might
be in an enterprise zone.
Chair: We are looking
at that next, yes.
Roger Pollen: Perhaps
leading on to that, there is the issue of looking at how you can
make better use of the assets we have, which of course is Lady
Hermon's point in many ways as well. If you've got a finite pot,
what can you do with it and how can you do more with that? This
has not been researched or surveyed and, if I can add a big health
warning, it's simply early work in progress, but one thing is
to look at the intellectual property that has been developed within
the universities there and has not yet been exploited. It has
probably not yet been published. It is to see if there's a way
of releasing that almost as open source, but with caveats attached
to it, so that the development of it must either be done in Northern
Ireland or, in some way, have a link back so that there are financial
benefits to Northern Ireland. By putting it out there, people
who have not been involved in the process of its development can
actually start to say, "That's something we can make use
of and can develop."
Oliver Colvile: If the
Federation of Small Businesses would be interested in doing it
on a national basis, I would be very interested, most certainly
for my constituency down in Plymouth.
Q340 Naomi Long:
Very briefly, you mentioned the enterprise zone. We had an interesting
exchange with the Secretary of State yesterday with respect to
what an enterprise zone might look like. I don't think we are
any clearer as to what package of measures might be included,
other than reduced corporation tax. It was interesting that David
drew out of the findings of your survey that the restricted banking
arrangements in Northern Ireland are a significant challenge and
something you'd like tackled. The Secretary of State pretty categorically
said that won't be part of the enterprise zone package yesterday,
although I hope he will change his mind in light of what we said
about it.
Roger Pollen: Sorry,
could you clarify what he said wouldn't be part?
Naomi Long: The issue
of dealing with banking in Northern Ireland specifically, and
the restricted banking market, which is something that I raised
in the context of it being repeatedly raised with me by small
businesses, in particular, that are not able to access decent
lending arrangements with local institutions. Are there other
elements that you would like to see as part of an enterprise zone?
Feel free to say that banking is an issue, because it would reinforce
the argument that a number of us put yesterday. Are there other
elements in addition to simply the corporation tax that you feel
would be necessary to make an enterprise zone meaningful?
Roger Pollen: Can
I cut straight to the banking one first of all, and say, yes,
that ought to be considered? Certain banks are making efforts;
other banks are saying that they are surprised at how few people
are coming to them looking for money, and so on. The bottom line
is that small businesses are having great difficulty in getting
finance at the right rates. It seems to us that one of the sensible
ways, if we are really going for some fresh thinking on this,
within the context of the enterprise zone, is to explore the concept
of Post Bank. I know FSB's called for it nationally. I think
there are difficulties with that because of the arrangements with
the Bank of Ireland and the finance there, but it seems to us
that's another reason for suggesting that you consider Northern
Ireland as a pilot and see if you could actively develop the Post
Office network to provide business banking facilities at an affordable
rate, and do it within the context of an enterprise zone, so as
it can be treated as a pilot. That might fit in and mesh with
other Government priorities to do with the Post Office but allow
us to move forward, because we are part of the UK that has its
own banks, but banks that are not regulated within Northern Ireland.
This may be a way of introducing a new player into that game
and introducing a new dynamic into business financing.
Q341 Chair: That's
an interesting point. I'm sure we can look at that in our next
discussions, thank you. Anybody else? Any final questions you'd
like to put? Okay, it's been a very interesting discussion.
Thank you very much.
Roger Pollen: Can
I add just one thing, Mr Chairman? It seems to me there is a
remarkable opportunity facing us at the moment. Yes, there are
lots of difficulties and so on, but American policy at the moment
is to repatriate American jobs to America from all parts of the
world except for Northern Ireland, where their policy is to put
them in there. That's a remarkable opportunity—to have
the world's biggest economy very sympathetic to us and supportive
of that. At the same time, you've got President Barroso from
the European Commission making commitments to do special things
with and for Northern Ireland. He's meeting the First Minister
and Deputy First Minister tomorrow in Brussels. Add to that the
fact that the Coalition Government have recognised that there
is a need for a longterm structural change to move from
the status quo to something more sustainable, and they're seriously
considering granting taxation and other powers that no other region
in the UK enjoys. Finally, consider that all five of the main
parties of the Assembly are broadly in agreement that the private
sector and, in particular, small businesses are central to delivering
recovery. When you get that coincidence of US, European, UK and
local good will and interest, it shows that there is a tide that
needs to be seized. Corporation tax is almost certainly going
to be central to that in some way, given that the interests are
in significant part lying outside of Northern Ireland and the
UK, so there is an opportunity here. I think it's quite clear
that none of us have a clear idea yet as to how that might look
and what it will include, but I think that we would certainly
as a federation urge very strongly that you look at all the measures
you can to seize that tide and to make a significant gamechanging
move.
Chair: I think we're in
danger of provoking further discussion.
Q342 David Simpson:
Roger, when you talk about the Americans and trying to get into
other parts of the globe, there was an interesting comment by
the New York Stock Exchange, which has moved into Belfast. It
said that corporation tax was not No. 1. There were other issues
ahead of it, going back to the John Simpson thing. There were
skills, technology, infrastructure and the work force, all of
which came before corporation tax. It was a factor, yes, of course,
because they're in the South as well, but it wasn't their top
priority.
Roger Pollen: If
I may extend the conversation slightly, Chairman, yes, it's being
looked at, but that's why we're saying that we should consider
what other measures there are. If there are other measures that
can be taken without stepping outside of the Azores issue, whereby
there can be gamechanging investment made into the other
issues we talked about, such as reducing business taxes, creating
more flexibility there, national insurance and so on, then obviously
the small business sector is going to benefit from that as well.
We aren't saying that there is a clear and obvious solution to
the issues we face, but there's certainly so much good will that
we need to capture. Corporation tax is very much an important
part of the considerations.
Ken Redpath: I
agree.
Chair: Thank you very
much for coming. We have enjoyed it.
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