Belfast Telegraph

Why Robinson and his Finance Minister are at odds over corporation tax

Stormont chiefs want to close deal, but at right price

By Liam Clarke

Horse-trading on plans to lower corporation tax in Northern Ireland is likely to go right down to the wire. That is why DUP ministers like Sammy Wilson and Peter Robinson are playing 'nice cop, nasty cop' in their public statements.

A public consultation on corporation tax closes on June 24 with predictions that a decision could be made before the end of the year. The current corporation tax rate in the UK is 26%, compared to 12.5% in the Republic. Low rates of corporation tax are considered an important means of attracting overseas investment.

Hundreds of millions a year are at stake and there is only one chance to cut the deal with London, so the trick is to get it at the right price. Ministers don't want to pay an exorbitant price by appearing too eager to the Treasury.

Yet they don't want to lose the deal, and they know that Nick Clegg, the Deputy Prime Minister, is already sceptical about the whole idea. And they certainly don't want voters to think the change isn't worth having. They want to be able to claim a victory.

So far Peter Robinson, the First Minister, has been playing nice cop by making it clear to London that he wants the powers. Arlene Foster, the Enterprise Minister, is an even nicer cop. She has talked up the employment potential, predicting 58,000 new jobs, to encourage business and the voters that the leap is worth making.

Meanwhile their party colleague, the Finance Minister Sammy Wilson, has been the nasty cop. He has questioned the price, and over the weekend he made a point of looking London's gift horse squarely in the mouth.

Under EU rules the business tax can only be cut below the UK's 26% rate if Stormont takes responsibility for levying it. The DUP is committed to go one further and "work towards a 10% rate". That would be even more expensive, and there is no absolute guarantee how much new investment would be attracted in by the lower taxes.

Belfast Telegraph


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