Corporation tax reform could bring 58,000 new jobs

Northern Ireland could attract 58,000 more jobs by 2030 if corporation tax was reduced to Republic of Ireland levels, an independent study has found.

The findings were revealed by Stephen Farry, the Employment and Learning Minister, during a round of statements in response to the 760 job losses at FG Wilson.

The job losses at the Caterpillar subsidiary, which may now exceed 1,300, are a result of the company’s decision to move production of smaller generators to China because it is closer to its Far Eastern markets and manufacturing costs are lower.

Enterprise, Trade and Investment Minister Arlene Foster will travel to Illinois next week, when she is on a US trade mission, to meet senior Caterpillar executives to discuss the future of the FG Wilson plants in Northern Ireland.

Mr Farry stressed how important business tax cuts could be to such efforts.

“Increased demand for higher level skills will continue to exist even without a reduced rate of corporation tax,” he said.

“However, an external report that I commissioned this year into the potential skills requirements arising from a lower level of corporation tax indicates that a reduction in the rate to 12.5% could create up to double the jobs that could be created today — that equates to 58,000 extra jobs.”

He predicted that most of these would use advanced skills and said that “2,000 are expected to be in the advanced manufacturing sector”.

He continued: “The research shows that our skills base, in particular STEM subjects (science, technology, engineering and mathematics) will be critical in driving the full benefits of a lower corporate tax regime.”

Both Mr Farry and Ms Foster expressed confidence that the skills of FG Wilson workers could be quickly redeployed and could help attract new investment.

“Evidence shows that frequently people of such background can more rapidly leave the unemployment register than average, and indeed may never join it,” Mr Farry said.

Ms Foster said she had received a written assurance from Caterpillar management in America that they remained committed to manufacturing larger generators here, and that they would examine ways to move more production to Northern Ireland.

Ms Foster also announced the resumption of a business support scheme which had been suspended for a year because of a legal challenge.

On the suggestion of Patsy McGlone of the SDLP, Ms Foster will ask the British Government to apply for aid from the European Globalisation Adjustment Fund.

The fund aims to help redundant workers and suppliers who lose orders as a result of shifts in global trade patterns.