Belfast Telegraph

UUP peer voices opposition to corporation tax cut plan

By Margaret Canning

Lord Kilclooney said lower corporation tax would harm the "95% of the population of Northern Ireland who are not company directors".

In a statement at the House of Lords, the businessman said people in Northern Ireland could well suffer from reduced public services if corporation tax is cut.

He said Assembly election candidates should be challenged on whether they support cutting tax "or those who want to see Northern Ireland continuing to have the same responsibilities and benefits as everyone else in the UK".

A recent report by the Treasury, which is now being consulted on, said cutting corporation tax in the province could mean a fall in the block grant of up to £300m a year.

The peer, who is head of newspaper business The Alpha Group, said there were other factors which would dictate where a company might set up, such as labour costs, energy costs and availability of skilled labour.

"That is why Dell withdrew several thousand jobs from the Republic, albeit with a 12.5% corporation tax rate to relocate in Poland, with a 19% corporation tax and more recently HP - the USA technology giant with plants in Galway, Leixlip and Belfast - opted to select Belfast with its higher corporation tax as its new global centre of software excellence," he said.

While its supporters said a low rate of tax would create 90,000 new jobs, the Co Armagh peer said it would take 20 years to know if that was a realistic claim.

At best, the claim was "wishful thinking", he said.

"But there is no doubt that a reduced block grant from the Treasury to Stormont will hurt the 95% of Northern Ireland people who are not company directors," he added.

Lord Kilclooney said politicians "should be on the side of the ordinary people - the majority in Northern Ireland - and expose the risk of a lower corporation tax".

He also said the arguments in favour of cutting tax in Northern Ireland were "even less convincing" as the UK main rate is set to fall to 23% in the next four years.

The House of Lords independent cross-bencher said the public were being "conned" by the pro-tax cut campaigners.

He said the launch of the Treasury's paper last month had been accompanied by a "major public relations campaign", led by Mr Paterson.

"Interestingly, the three daily newspapers in Northern Ireland carried identical statements from six business spokesmen - ie, all supplied to each paper from the one source - in order to con the wider population."

The peer also accused Mr Paterson of being motivated by a desire to ensure the Treasury saved money on Northern Ireland through a cut in the block grant.

He said the Conservative had let "the cat out of the bag" when Mr Paterson told the Northern Ireland Affairs Committee that cutting corporation tax would result in a smaller block grant.

"In one stroke, he revealed himself as a little Englander rather than one seeking the best interests of most people in Northern Ireland," Lord Kilclooney said.