Corporation tax campaign gathers pace in Belfast and Edinburgh

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WHILE the political leaders of the three devolved administrations were meeting in Edinburgh on Tuesday, the campaign in Northern Ireland to win control over corporation tax has been gathering pace.

A formal consultation process on whether the Stormont Executive should be given the devolved power to set its own business taxes closes on June 24.
The main aim of the consultation is actually to build up public support to ensure the UK Treasury does not block moves to devolve corporation tax to Stormont.

To the surprise of many, the campaign is being spearheaded by the Conservative Secretary of State for Northern Ireland, Owen Paterson. Last week Paterson was in the province attending meetings with the local business community to drum up support for the move.

“I am urging everyone, business people, community members, your friends, relatives, neighbours, to take part in the consultation process,” he said. “It’s in your hands now.”

Vincent Crowley, boss of Independent News & Media and a leading business figure in Norther Ireland, commented: “We were delighted that the Secretary of State showed such interest in our activities in Northern Ireland. We fully support the campaign to lower the corporation tax rate.”

Last week the campaign hit its stride, with the Northern Ireland Affairs committee at Westminster, the Economic Advisory Group and the business coalition ‘Grow NI’ all coming out in favour of lowering the rate from 28 per cent.

The new chairman of the Institute of Directors in Northern Ireland, Mervyn McColl, went as far as demanding corporation tax in the province be slashed to 10 per cent, in a bid to make the province a “world-beating investment location”. He says devolving corporation tax could make Northern Ireland “the Singapore of Europe”.

In Scotland, however, the Lib Dem Secretary of State, Michael Moore, has refused to endorse the bid to give Holyrood control over corporation tax.

Other commentators, including BBC Scotland’s Brian Taylor (see his blog, 31 May), argue that if corporation tax is cut in NI or Scotland, under devolved powers, then public spending would also have to be cut in line. Otherwise, the move would break European law on unfair regional incentives.

However, this EU ruling applies only to business taxes set by central government. If a regional administration has separate and independent powers to set business taxes, it is free to choose any level – including a cut.

Tuesday’s trilateral summit between the three devolved administrations was hosted by Alex Salmond and his deputy, Nicola Sturgeon. Taking part were Northern Ireland First Minster Peter Robinson, his deputy Martin McGuinness, and First Minister of Wales Carwyn Jones.