Finance Minister Mairtin O'Muilleoir to challenge PM Theresa May on 10% corporation tax rate
Finance Minister Mairtin O'Muilleoir has said he is "not interested in a corporate taxation race to the bottom" after reports that the government will slash the UK tax to below the special rate planned for Northern Ireland.
The news comes as Prime Minister Theresa May prepares to offer a new Brexit forum to the leaders from all the devolved administrations at a meeting of the Joint Ministerial Council (JMC) in London today.
As part of the Fresh Start Agreement, Stormont is planning to cut the tax rate here to 12.5% next year, to match that of the Republic.
But yesterday the Sunday Times reported that fears of a harsh Brexit deal with the EU has led to secret plans in Downing Street for a 'nuclear option' to cut UK corporation tax from 20% to 10%.
Yesterday, Mr O'Muilleoir said that "for my part, I am not interested in a corporate taxation race to the bottom".
He said: "Hardly a day goes by without a different solution being mooted to deal with the Brexit mess created by the Tories.
"We have our sights set on an affordable 12.5% rate in order to create thousands of jobs. That remains my intention but I will tell the British Government in London that they need to give the devolved administrations clarity about their intentions."
However, DUP MP and former finance minister Sammy Wilson said there was no downside to a 10% rate, as it would mean no reduction to Stormont's funding from Westminster to make up the Treasury's tax shortfall.
"It actually saves us having to spend money reducing corporation tax. We would benefit just the same as the rest of the UK. It would make the UK as a whole an attractive place for foreign firms to invest," he said.
He added that the Irish government "had too much to lose" in terms of trade with the UK to oppose such a change.
Leading economist John Simpson called it a "useful threat" for the UK government. "It means Northern Ireland doing it's own thing would be meaningless, but we would benefit alongside the rest of the UK," he said.
"The Republic of Ireland will go bonkers, they'll be caught out playing their own game. It's the sort of thing we'll hear more about when the negotiations with Europe get more difficult."
It's understood that Mrs May will make the offer of a new official forum, to be chaired by Brexit Secretary David Davis, to Arlene Foster and Martin McGuinness today, as well as the leaders of the Scottish and Welsh governments.
Mrs May said: "The country is facing a negotiation of tremendous importance and it is imperative that the devolved administrations play their part in making it work. The new forum I am offering will be the chance for them all to put forward their proposals on how to seize the opportunities presented by Brexit and deliver the democratic decision expressed by the people of the UK."
If the devolved governments accept the offer of formal discussions, a new sub-committee of the JMC will be established, chaired by Mr Davis and attended by nominees put forward by the devolved governments. The PM will offer a first meeting by the end of November and at least one more by Christmas as negotiations progress before Article 50 is triggered by the end of March.