Farren calls for tax-raising powers for NI Assembly

Finance Minister Dr Sean Farren has called for wider powers to raise revenues – including the right to levy monies through income tax – in an effort to rebuild the province's cash-strapped public services.

The SDLP Minister said he thought the Assembly should have the potential to raise revenue by recourse to income tax, but conceded that he did not know whether the power would actually be used.

The move was originally suggested by the SDLP at the drawing up of the Good Friday Agreement but it was rejected. The power currently resides with the UK Treasury department in Whitehall.

Dr Farren said that at a time of crisis for the public sector, capital investments were needed to reverse the legacy of many years of government under-funding. He warned that there would need to be an extra £4 billion investment over the next 10 years to modernise services.

The finance department is also considering a variety of ways to raise money including public private partnerships, rates rises and applications for increased Treasury grants.

However, the Minister was keen to point out that any increase in the tax-raising powers of the finance department would be met by a corresponding cut in investment from Gordon Brown's Treasury department.

"The systems of devolution adopted in the UK are not systems that provide a great deal of fiscal autonomy," he explained.

"Northern Ireland may not be a region with the potential for a great deal more, because the Treasury could say: 'If you are raising more money yourselves, why do you need more money from us?'"

The executive may also request for a loosening of Whitehall-fixed spending controls to allow the executive to target expenditure on key areas and raise borrowing – possibly via the issuing of bonds.

(GMcG)