Belfast Telegraph

In spite of Executive brokering deal I suspect many people will have kept the Champagne on ice

By Henry Reilly

In spite of our masters in the Executive brokering a last minute deal (of sorts) among themselves, I suspect many people will have kept the Champagne on ice... unless, that is, they wish to drown their sorrows.

Because, for all the platitudes and pats on the back from the great and the good, the Executive has collectively bet the shop on the devolution of corporation tax to Northern Ireland.

And as someone who speaks to local businesses regularly, I, for one, do not believe corporation tax is as significant as some believe.

No business looks at one tax in isolation from the general tax regime in any jurisdiction.

And the UK already has one of the most attractive tax regimes of any Western economy.

That Northern Ireland's economic performance is below par has little to do with corporation tax.

Instead, issues such as ineffective government and overzealous regulation do little to endear us to inward investors, while the John Lewis planning debacle and the persecution of Ashers bakery are hardly conducive to fostering an entrepreneurial spirit.

Nonetheless, if our First Minister is to be believed, the devolution of corporation tax will lead to the creation of up to 60,000 jobs. But, like many of the First Minister's claims, that might be a big "if".

If 60,000 jobs were to be created, they would not go unnoticed by our nearest neighbours. Messrs Noonan, Osborne and Swinney will not stand idly by and watch jobs disappear to Northern Ireland at the expense of their fellow countrymen.

Instead, they'll respond and either match or undercut Northern Ireland's corporation tax rate. Why wouldn't they?

At that point, we're not just back to where we started; instead, we're back to where we started with a reduced subvention from Westminster, having flogged off the family silver to fund it all... as well as carrying around a £2bn bill in our back pocket.

That's why, in the fullness of time, last Tuesday - December 23, 2014 - will not be remembered as the day the Executive parties got their act together, but rather the day all George Osborne's Christmases came at once.

  • Henry Reilly is a Ukip member of Newry and Mourne District Council

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