Does the presence of Chancellor George Osborne in Northern Ireland today signal growing support in No 11 for a derogation on Corporation Tax?
From his arrival here Secretary of State Owen Paterson has repeatedly advocated ‘a rebalancing’ of the economy because of the extraordinary over dependence on State subvention.
First Minister Peter Robinson and deputy First Minister Martin Mc Guinness have been pressing Treasury to make an exception of Northern Ireland on CorporationTax because of the advantage of our neighbours in the Republic of Ireland who operate a Corporation Tax which is roughly half of the UK rate.
One Irish government source claims the argument in Europe over Ireland’s bail out rate has produced an unexpected ‘silver lining.’ The vociferousness of Germany’s Merkel and France’s Sarkosy over the low Irish Corporation Tax rate has resulted in millions of words in the international press. This in turn has registered heavily in North America boardrooms. The Dublin government source added “more inward investment than ever is now expected to flow into Ireland.”
Needless to say George Osborne is taking all of this into consideration. He will be mindful of the potential mischief which Alex Salmond could make for us.
Northern Ireland has lost its ‘special US envoy’ Declan Kelly. His tenure appeared to end abruptly. Secretary of State Hillary Clinton has not named a replacement for Mr Kelly. Has America lost interest in us or has its focus shifted towards elections?
Finance Minister Sammy Wilson, always his own man, has been less effusive about a reduction in Corporation Tax. He sees the downside clearly to the ‘block grant’ in the short-term. He is similarly contrarian on water charges which he would implement tomorrow morning should Peter Robinson give the green light for this. We are at a fork in the road.
Will George Osborne be another Richard Burke, a former Irish European Commissioner, who came here and promised ‘a crock of gold at the end of the rainbow ?’ In fairness to him we are now talking of ‘Peace 1V’ money.
