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EU preparing to rein in Republic's tax regime

Graham Gudgin essentially argues the case (Comment, April 24) for the two Irelands, Northern and the Republic of, to be each an integral part of a larger political and economic union: either that of the European Union, or that of the United Kingdom, or both, as it is at present with Northern Ireland - being part of the UK, it is part of the European Union. But, if a choice has to come, he would argue for the UK, rather than the European Union.

The assistance Northern Ireland receives from the Treasury to maintain its present level of welfare spending, it receives because its levels of personal taxation, or company taxation, are the same as other parts of the UK, even though Northern Ireland as a unit (and the same applies to similar parts of the UK, even parts of England) may actually return less to the Treasury than is spent on Northern Ireland by the Treasury.

A similar system to this at present does not operate throughout the European Union (hence, for example, the present woes in Greece) and will not operate until the EU achieves the greater political union it has in mind. Whether the Republic of Ireland will be happy with a greater political integration with greater control from Brussels is an interesting point.

On entering the EU, the Republic received large, one-off subventions to help it to build its infrastructure, which was woefully behind that of Northern Ireland.

Having done that, it hit on the idea of raising money through low corporation taxation to encourage companies to locate their headquarters in Dublin.

The outflow to the Republic seems to be of little concern to London, but not to Brussels, and steps are being taken not to prevent a state within the EU from setting its own corporate tax rate, but to make sure that it's a rate that applies only to economic activity within that country and not other EU countries.

Surely, what should interest the Northern Ireland electorate, yet not sufficiently emphasised, although underlying Graham Gudgin's article, is that, in effect, no party - not even Sinn Fein - is standing on a ticket of a separatist Ireland.

WA MILLER

Belfast

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