Britain's Chancellor of the Exchequer, George Osborne, has pledged to give Northern Ireland control of its corporate tax rate if politicians can reach agreements during ongoing all-party talks. Representatives in Belfast are currently trying to settle disputes over flags, parades, and other on-going issues, including budgetary problems and disagreements over welfare reform. 

The announcement came during Mr Osborne's Autumn Statement, a pre-budget report made by the UK treasury. In it, Mr Osborne said: "The Treasury believes it [devolution] can be implemented provided the Northern Ireland Executive can show it is able to manage the financial implications."

Belfast has been lobbying for control of the tax so that it can compete with the lower-rates in the Republic of Ireland. As it stands, Northern Ireland shares the same rate as the rest of the UK, which is 21 percent - south of the border corporation tax is 12.5 percent.

The announcement backs-up Westminster pledges to devolve greater powers to regional executives within the UK after Scotland almost voted to leave the union in September. Last week, the Smith Commission, which was formed in the wake of the September vote to examine the issue of Scottish devolution, recommended that Edinburgh should not be allowed to set its own corporate tax rate.

Scotland's First Minister and leader of the Scottish National Party Nicola Sturgeon indicated that she would support Northern Ireland being given control of the tax.

Scotland is likely to argue again that it should be granted similar powers, but Northern Ireland could be viewed as a special case, because it shares a boarder with a state that has a lower tax rate. Stormont hopes that matching the Republic of Ireland on corporation tax will tempt more businesses to setup north of the boarder.

The possible move by the UK's financial administration comes at a time when the president of the European Commission, Jean-Claude Juncker, has been pushing for common tax policies across the European Union.