The Irish Republic attracts 20 times more foreign investment than Northern Ireland, which has now just 26% of it’s southern neighbour’s economic value, down from 45% just 13 years ago, according to a report from Goodbody Stockbrokers, who conclude that a reduction in Northern Ireland’s corporation tax rate would give a huge boost to the region’s economy.
Not surprisingly, the report also cites the area’s reliance on the public sector as a drag on economic activity and entrepreneurship.
“In the most recent data available, the public sector accounted for 27pc of gross value-added (GVA), compared with 18pc and 15pc in the UK and Republic.
“This heavy reliance on the public sector may be partly attributed to the weak rate of entrepreneurial activity in the province. As a measure of this, business registrations per 1,000 population were 30pc below those in England in 2003,” it says.
The report also notes that while the Isle of Man and Channel Islands can set their own taxes as they are not actually part of the UK, any cut in the North’s taxes might require EU approval as well as a British government decision.
Is it not time for the parties in Northern Ireland to start campaigning for a harmonisation of corporation of tax rates with the Irish Republic so that the area can compete on a level playing field?