Recommendation 15

We welcome the work of the Independent Fiscal Commission for Northern Ireland on further fiscal devolution. The devolution of such powers will not address the difficult situation in which public services currently find themselves but could help strengthen the economy and increase the fiscal accountability of the Executive. Income tax devolution has precedents in Scotland; devolution of the apprenticeship levy could complement the responsibility Stormont has for education and skills; and taking up corporation tax powers would acknowledge Northern Ireland’s unique geographic and economic position within the Union. However, further fiscal devolution comes with potential risk too. We welcome the work of the Independent Fiscal Commission for Northern Ireland on further fiscal devolution. The devolution of such powers will not address the difficult situation in which public services currently find themselves but could help strengthen the economy and increase the fiscal accountability of the Executive. Income tax devolution has precedents in Scotland; devolution of the apprenticeship levy could complement the responsibility Stormont has for education and skills; and taking up corporation tax powers would acknowledge Northern Ireland’s unique geographic and economic position within the Union. However, further fiscal devolution comes with potential risk too. There is a need for a much greater level of stability before we should consider significant additional changes to the fiscal powers in Northern Ireland. We do not believe that income tax should be devolved to Northern Ireland at the moment. Separately, we would question whether the administrative capacity is in place to manage what is an extremely complex and fundamental element of the taxation system. Upcoming Fiscal Framework negotiations between the Government and Northern Ireland Executive should include reference to further fiscal devolution. We recommend these negotiations start in the first half of 2024. (Paragrap