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DUP's pact with Conservatives ticks most of the right boxes, but misses trick on corporation tax

Letter of the day: post-brexit economy

The confidence and supply agreement between the DUP and the Conservative Party is sound and positive. Sinn Fein will have to work very hard to find a way to criticise it successfully.

Although there is mention of corporation tax rate devolution in the agreement and what looks like a target of this year's Budget for some progress, the DUP has made a mistake in failing to secure firmer funding commitments for rate reductions - should a new administration seek them.

They should also have sought an agreement that if direct rule is the way things go in the short term, direct rule ministers would implement a corporation tax rate-cut themselves. A 12.5% rate would ultimately boost Northern Ireland far more than any spending increase.

Furthermore, there is potentially an interesting twist with corporation tax. As we, sadly, leave the EU, the remaining 27 member states will integrate surprisingly quickly. The political elite in the Republic will want to be at the heart of that process, but in due course that will come at a heavy price.

The French, especially, very much dislike the low corporation tax in the South. They regard it as unfair competition. A minor state like the Republic, in a far more integrated EU, will simply not be allowed to keep its low corporation tax plaything into the medium-term future. But we at least, in Northern Ireland, obviously will - though we first have to reduce it. At that point, the economic playing-field between North and South would become far more level.

That, alongside a sensible soft Brexit deal, might enable a return to the time when Ulster was among the most prosperous parts of the island. That, at least, should be the aim.

john gemmell


Belfast Telegraph


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