Paying for devolution…

“A cut in the rate of corporation tax is vital if Northern Ireland’s economy is to succeed,” the Tele reports DUP First Minister Ian Paisley – who intends to stand for Westminster again – telling the Ulster Fry fringe breakfast at the Labour Party conference. However, yesterday in the Assembly, DUP Finance Minister Peter Robinson clearly didn’t think it would be the end of the world if the tax wasn’t cut. Regardless of the difference in emphasis in senior DUP ranks, and because the Assembly doesn’t have any tax-varying powers and is only expecting a 1% increase (in real terms) in Westminster’s block grant, questions are now being raised about how Northern Ireland will pay for its upkeep. Selling off public buildings is a ‘no brainer’ (surely folly to use that phrase, Peter?) PFI schemes? At the moment that’s on hold until next year, thanks to Partenaire’s legal challenge to being left out of tendering. Regional and domestic rate increases (he wants to fix the levels of the latter for three years)? Well, Robbo seems to have something in mind. How would you feel about road tolls? A tax on property developers (probably not Paisley Jr’s favourite option)? Higher Planning Service charges (assuming they ever get to your application) and a hike in MOT fees are all being discussed, according to Chris Thornton.

  • It was Sammy Mc Nally what done it

    Also at the assembly, courtesy of the Irish Times

    SDLP Assembly member John Dallat suggested that a painting of a pope blessing King William as he marched to battle at the Boyne should be displayed to “intrigue” visitors to Stormont.

  • willowfield

    Save money by reducing the number of departments and the number of MLAs.

    What about the “Civic Forum” – does it still exist? If not, scrap it: what a shameful waste it was/is.

    Selling off public buildings will only raise money in the short term and will lose money in the long term as the Government is forced to rent the buildings back.

    Ditto PFI – gets things built at low cost in the short term but costs more in the long term.

    Rate increases? These should be set by local councils, not by the Assembly. Scrap the regional rate and transfer those services removed from local government in 1973 back to the councils.

    Road tolls? Possibly as a disincentive to drivers, but proceeds used to fund public transport improvements.

    A tax on property developers? Not sure how this would work, but yes in principle (only in relation to residential property).

    Higher Planning Service charges? Unsure.

  • astic

    You mean restore the painting that was removed in the 30s because certain people did not accept that the Pope financed part of William’s army?

  • me

    Keep the money they want to give to the UDA.

  • heck

    how about not paying Nor Iron’s share of the British defense budget.

    instead of spending the money on nuclear weapons (wmd!) and sending it to illegal wars in the middle east spend it on roads, schools and hospitals.

    can all republicans get a refund on their enforced contribution to the civil list?

  • Dawkins

    Ulster Fry fringe breakfast?!

    Yuk. Thousands of Ulsterman drop dead every year because of arteries clogged by this garbage fried in hog’s lard. You’d think the politicians might show a better example.

    Mind you, looking at the pix of the attendees, I have to say a chap would be hard pressed to spot a healthy peep among them….

  • Bretagne

    Give the MOT test, to the local garages rather than having to drive your car to some drab industrial estate in Coleraine, or worse, New Buildings.

    This keeps employment local and removes the need for unnecessary journeys. Cheaper and greener, and probably more popular….

  • More economic nonsense from Paisley. He constantly touts for a cut in the corporation rate for BIG business whilst studiously avoiding mentioning the fact that the corporation rate for SME’s went UP in the last budget!

  • Rory

    “A cut in the rate of corporation tax is vital if Northern Ireland’s economy is to succeed,” the Tele reports DUP First Minister Ian Paisley

    If Gordon has his way and his plans go right there will of course be a cut in Corporation Tax and evermore as the state of the economy (and forcing through cuts in education and health in particular) allows. So on that level Paisley can always claim a victory as and when it happens.

    But of course what he really means is a cut that brings the rate below the prevailing rate in the rest of the UK and ideally to the same level, or better still a lower rate than that prevailing in the Republic of Ireland.

    This simply cannot and will not happen and the First Minister knows this full well. The logical conclusion therefore to draw from his assertion is that if the Northern Ireland economy is not to collapse it would need to have its taxation affairs regulated by that neighbour with a legitimate interest in assuming control where the rate of Corporation Tax would give it a competitive edge over its powerful and overwhelming Big Neighbour.

    Could this be a form of creeping economic unification being trailed by the First Minister as a prelude to its inevitable political consolidation once he is safely beyond blame in the bosom of the Lord?
    .

  • John East Belfast

    As an Ulster Unionist I must nevertheless admit that Robinson has been talking a lot of sense since he took up this position.

    Pailsey knows no more about the tax consequences of a CT Rate cut than Archbishop Eames does when the latter signed that letter – with ROI business men (with northern operations) – when the cat was let out of the bag that it was really all about them paying a low rate of tax throughout Ireland.

    That the Belfast Telegraph – owned by INM Group – constantly makes a headline if anyone in passing comments on this issue is also telling.

  • DK

    ““A cut in the rate of corporation tax is vital if Northern Ireland’s economy is to succeed,” the Tele reports DUP First Minister Ian Paisley”

    Has he not noticed that the economy is succeeding at the moment, with generally the best indicators of all the UK regions and better that the Republic sometimes as well (for example see: http://tinyurl.com/342usu ). Do we really need a corporation tax cut at all?

  • kensei

    JEB

    “- when the cat was let out of the bag that it was really all about them paying a low rate of tax throughout Ireland.”

    Business men in making case for low tax shock. Dastardly nationalist plot, that one.

    Their Nationality is irrelevant. What is relevant is whether or not such a move would encourage them to bring business, and hence jobs and investment, North, and whether the current tax rate is preventing them.

    DK

    “Has he not noticed that the economy is succeeding at the moment, with generally the best indicators of all the UK regions and better that the Republic sometimes as well (for example see: http://tinyurl.com/342usu ). Do we really need a corporation tax cut at all? ”

    Hugely reliant on the public sector, and any idiot can sell tenners for a fiver.

  • John East Belfast

    kensei

    “Business men in making case for low tax shock. Dastardly nationalist plot, that one.”

    You dont fully appreciate how CT works.

    The net tax you pay will always be that rate of your home territory once you re-patriate your foreign earnings.

    In most cases companies set up operations in low tax environments and then they have a problem with the post tax earnings – if they bring them home they pay their higher home tax. Therefore such companies leave them abroad as unpatrioted foreign earnings – in the US case this is becoming billions of $.

    The ROI is unique in that it has already a Low Tax Home market therefore ROI corporates going abroad are actually removing their tax advantage by doing so.

    However they look north of the border and see the lower wage costs and lack of union problems and they are scratching their heads about how do they get the advantages of that without giving up their ROI tax advantages.

    Hence the great campaign to uniformise CT throughout the island – championed of course by the INM Group’s own Belfast Telegraph.

    Just have a look at the signatories to that letter and you will see the vast majority are ROI corporates with operations (or operations pending) in NI. My God Michael O’Leary even signed it and then a couple of weeks later announced their location to Belfast.

    In case they are unsuccessful this is why the alternative is now being flown – ie why not have ROI corporates in NI pay the ROI Rate !

    Basically the ROI Corporates want their cake and eat it.

    They want all the advantages of a well educated and health cared for NI workforce which is paid for by the balance of the UK tax take but they dont want to pay or it.
    In the south the low CT Rate is subsidized by higher VAT, Stamp Duty and higher Income tax rates kicking in earlier.

    They want the best of both worlds

    All that will happen is that more post tax profits of the ROI corporates operating north of the border will flow out of the UK Exchequer and into the south.

    Meanwhile NI which already has the lowest unemployment rate in the UK and some of the highest housing costs would be greatly damaged by a sudden influx of FDI in search of lower tax. It would drive up wage costs, housing and lead to massive immigration on a par with the last few years in the south.
    It would not be the type of controlled steady growth that NI needs.

    The whole issue is a complete con by ROI corporates and they are exploiting both the ignorance of NI politicians as well as the natural desire not to appear as the ones calling for High Tax.

    I only hope Vardy sees sense and kicks this wasteful and distracting exercise into touch.