A couple of new snippets on the debate about a lower corporation tax regime for Northern Ireland. First, Colm Heatley interviews Indian businessman Lord Diljit Rana.
‘It isn’t realistic to expect to get £6 billion a year from the government for too much longer, so we need to develop our entrepreneurial skills, private enterprise, and we need to harmonise with the south,” he said.
‘‘Corporation tax and fuel duty are things that need to be harmonised. We need the economy to grow by around 8 per cent a year and we need to create 140,000 new jobs. We can only do that if there is political stability and accountability – that is why we need a deal. (Sunday Business Post)
Heatley also reports that Sinn Fein may seek an economic ministry in a new executive, with the aim of gaining a reputation for competence that woulds stand it in good stead in the Republic.
I think that is probably a sound strategy, but the potential pitfalls are clear:
[Peter Bunting of the Irish Congress of Trade Unions] said the North faced serious
job losses, with 2,000 going in the public sector, and perhaps another
8,000 to follow, and immediate threats to 500 private sector jobs.
Consumer spending would be hit by the introduction of €600 annual water
charges and a 19pc increase in rates on houses.
"People must understand how bad the economy here is. It cannot
absorb these hits unless the private sector can take up the slack," he
said. (Irish Independent)
While Bunting favours targeted grants and assistance, the Indo quotes Sir George Quigley of Bombardier as arguing for an across the board corporation tax cut:
Sir George said the development of an all-island economy would be hindered if the economic gap between North and South was not reduced.
"It would be disastrous for the North to have an all-island development policy if it only drew attention to the fact that the North’s tax regime is not competitive."
Meanwhile, the Belfast Telegraph carries the first hint of the opposition that was always likely to come from the British Government:
Enterprise Minister Maria Eagle has said it would be "very difficult" to allow Northern Ireland to have a lower corporate tax rate in order to equal levels offered in the Republic.
Speaking in New York following a groundbreaking north- south trade mission to Canada, Minister Eagle said her home city of Liverpool and other poor parts of Britain might ask for the same treatment if Northern Ireland works out a special deal. (Belfast Telegraph)
The Telegraph, which has been campaigning on this issue, also has the best summary of where the debate stands so far.
The chance of a package – or Peace dividend – being agreed will increase if the St Andrews Agreement is implemented.
Representatives of the business community have given the Assembly sub-group unanimous support in its plea for a Peace package.
The theme which runs through the Assembly report is that the Peace
package should be wide-ranging and, inter alia, have a large emphasis
on reduced corporation tax rates. Every profitable business would be
better off and many people would expect to see improved job prospects.
The Jonah in the equation must be the Chancellor of the Exchequer
with the wider agenda of how such a package would affect other places,
how much it would cost UK taxpayers, tax equity and the relative needs
analysis for Northern Ireland. (Belfast Telegraph)