Scotland “blundering in” to the debate on corporation tax could ruin Northern Ireland’s chances of getting the devolved powers to control the tax.

Cambridge University academic Dr Graham Gudgin warned that the Scottish government’s repeated demands for tax control might ruin the “well advanced” case put forward by Northern Ireland for devolving corporation tax.

Dr Gudgin told a Scottish Parliament committee that the UK Government has privately ruled out any chance that Scotland will gain control over corporation tax.

He said that he had been briefed by senior Whitehall sources that they would not hand the power to Edinburgh.

His comments provoked concern among MSPs on the Scotland Bill Committee who are investigating the pros and cons of the policy — a key SNP demand for inclusion in the legislation.

One SNP committee member said the remarks showed the Tory-Liberal Democrat coalition is failing to rule with “respect” for Scotland.

Dr Gudgin accused the Scottish Government of “blundering in” to the debate on tax control and warned that MSPs could “damage Northern Ireland quite

a bit”. Dr Gudgin, who is a member of the Northern Ireland Economic Reform Group, said: “Very few of the Northern Ireland criteria, which have persuaded the current coalition to support the devolution of corporation tax to Northern Ireland, apply to Scotland.

“My information, which I think is very reliable, is that the Tory-led coalition will not devolve corporation tax to Scotland under any circumstances.

“If Scotland keeps pressing this, the most likely outcome is that they will retire from this altogether, and Northern Ireland won't get it as well.

“There's quite a responsibility, I think, on the Scottish Government.

“You could damage Northern Ireland quite a bit.

“You could also damage Scotland's long-term prospects for getting corporation tax. I don't think there are any prospects in the short-term. But in the long-term, if Northern Ireland have it, the arguments are there to be made.”

He added: “If I can put this strongly, the Scottish government seems to be blundering in to this.”

He said he shares business group CBI Scotland's “frustration” with the SNP administration's discussion paper on the tax policy, which he branded “extremely one-sided”.

Background

Corporation tax is 28% in the UK, but only 12.5% in the Republic, which business leaders say is stifling inward investment. Campaigners argue that bringing the tax into line with the Republic could help invigorate the economy here. The UK rate is expected to fall to 24% by 2014 — still significantly above the rate in the Republic.