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Tax reduction might not be as good as it sounds

Former Secretary of State Shaun Woodward is correct to challenge the view that Northern Ireland needs a cut in corporation tax to grow its economy.

For too long, the Executive has based economic growth plans on handouts, or reduced taxation. Whether it is water charges, business rates, prescription charges, university fees or airfare duty, the only solution our politicians seem to have is reduced taxes.

Up to now, this policy clearly hasn't worked.

In reality, the Executive has no real investment or development plans. Our fixation with tax-breaks, refusal to pay taxes and our politicians' populism over pragmatism, has seen the deterioration of our once-envied health service and educational system.

While it is clear that the vested interest groups, such as big business and the Northern Ireland Retail Trade Association, will obviously try to protect their profits, the impact of such ill-thought-out proposals will disadvantage more than it will benefit.

Woodward is quite correct: any proposal to reduce corporation tax here will be a gamble; it will be gambling with our public services and investment, possibly pitting growth against profits. Tax relief should only be considered as an incentive. Such a strategy may create the stimulus for growth and recovery; however, nothing is guaranteed.

Yet one thing is certain: populist tax-reduction schemes, called for by the privileged to benefit the privileged, will not be in the best interests of Northern Ireland and will do nothing either to rebalance or grow our stagnant economy.

TRAFALGAR

Millisle, Co Down

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