Northern Ireland corporation tax will create 4,500 jobs a year

The Economic Advisory Group looked at the effect of announcing by next year a reduction in the rate to 12.5% to allow the province to compete with the Republic of Ireland. Its report concluded that 58,000 new jobs would be created by 2030, 42% of which would come through foreign investment.

The standard of living will improve by £24,500 per person and export sales could rise to £15bn, the report added.The group, chaired by former Monetary Policy Committee member Kate Barker, was set up by the Northern Ireland Executive and has been working on the review for a year.

"It is the view of the EAG that with this measure, Northern Ireland should be expected to achieve significant convergence toward living standards experienced elsewhere in the UK," Barker said. "Furthermore, with a lower rate of corporation tax, the economy should achieve the necessary rebalancing toward greater private sector activity, with increased productivity levels and export-led growth.

"It is important to note the ‘business-as-usual' option shows that Northern Ireland is forecast to remain significantly below UK living standards." However, she added that the reduced rate would not be a "silver bullet" and it would need to be introduced with other measures to rebuild the economy.