As I feared and after all the hype, the presumed coping stone for a Northern Ireland expansion strategy has been kicked in the long grass. ( Did Cameron stub his toe?) Even though the 12.5 % company tax looks safe in the Republic, (although still tbc) the British government has balked at introducing a similar rate for Northern Ireland, according to the Prime Minister in an interview with the Bel Tel.
The reasons are not hard to find and are overwhelmingly political. Despite the unanamity of the f ront benches at Westminster in favour of a British contribution to the Irish bailout sections of the soft left – like Polly Toynbee in a Guardian column re-run by the Irish Times – are in an unholy Little England alliance with the europhobe Tory Right like Bill Cash to slam the Irish ” tax haven” for helping “to cheat tax form the world’s treasuries for decades.” As if no other country is allowed to vary its tax base if it annoys the London chattering classes.
Nevertheless in face of this pincer movement, Cameron is probably wise to beat a retreat – even before he ordered the advance. It would do NI no good at all to be put in the corner with the Republic when xenophobic British insecurities are running high. What price now Enterprise Zone Northern Ireland?
From the Cameron interview…
While calls continue from politicians and some business leaders for Northern Ireland’s rate to be brought in line with the Republic as a means of attracting overseas investment, Mr Cameron indicated that was unlikely to be a major short-term priority.
He said: “In terms of the low corporation tax rate, I think we have to be careful here. I do believe it’s up to countries to set their own tax rates, I don’t believe in a European-wide setting of tax rates.
“I think we have to be careful before we do too much insisting on what people should do. It’s important that countries set tax rates that are sustainable.
“In terms of Northern Ireland, this issue I don’t think has gone away, but obviously the focus will be much more on how we get the Southern Ireland economy much more stable and growing.
“We will have to see where the tax rate ends up at the end of that before taking forward this agenda.”
Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London