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Last Updated: Thursday, 2 November 2006, 09:26 GMT
Funding package 'needs more work'
Peter Hain and Gordon Brown
Peter Hain said the money offered by Gordon Brown was generous
Northern Ireland's political parties have said more work must to be done to finalise the so-called peace dividend.

Chancellor Gordon Brown has announced a 50bn spending package linked to the establishment of a Stormont executive.

However, the parties are disappointed the chancellor has not offered to cut corporation tax.

The DUP called the funding an "opening offer" which was no more than 3bn of new money, while Sinn Fein leader Gerry Adams said it was still early days.

The parties want corporation tax reduced from 30% to match the Irish Republic's rate of 12.5%.

'Extraordinary settlement'

However, according to Northern Ireland Secretary Peter Hain, the package on offer represents an "extraordinary settlement".

One economist said the new money could be as little as 2.5bn, but Mr Hain said even this sum would be generous.

"If it were only 2.5bn, people ought to be grabbing it before the chancellor has a chance to close his red box," Mr Hain told the BBC's Good Morning Ulster on Thursday.

"No other part of the United Kingdom, including Wales which I also represent as its secretary of state, has got anything like this package."

Mr Brown, who announced the package after Wednesday's talks with Northern Ireland's political parties, said the funding would be worth 50,000 per household in Northern Ireland.

The general consensus afterwards among the politicians was that more work needed to be done to finalise the so-called peace dividend.

It is necessary to get this package to a state where it is acceptable
Peter Robinson
DUP deputy leader
Mr Adams said the chancellor had indicated he was prepared to talk further on the subject of corporation tax.

Mr Adams said: "We have to come at this positively.

"The British chancellor has come up with a whole series of measures. We have to look at the detail of it."

DUP deputy leader Peter Robinson said: "The chancellor has to start from some point - we might have hoped he could start from a slightly higher point than he did.

"It is necessary to get this package to a state where it is acceptable."

Ulster Unionist leader Sir Reg Empey said that they were "disappointed" by the response on corporation tax.

But he added: "I don't think this marks the end of it. We have to use this as the commencement of a process."

The cash offer is linked to the return of devolution
The SDLP's Mark Durkan said the detail of the package still needed to be studied.

Mr Hain said EU law banned the government from lowering corporation tax levels solely in Northern Ireland.

"There is a problem in that our legal advice tells us that under the Azores ruling, it is illegal under EU rules for a member state to allow one region to adjust its level of corporation tax while maintaining another level in the rest of the country.

"In other words, you can reduce the level of corporation tax for everybody in the UK or nobody at all. Sinn Fein and the DUP have challenged that - we are getting our Treasury experts on to it."

Mr Brown said he was still considering the parties' views on the package, but there was much there to attract inward investment and stimulate the economy.





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