North's corporate-tax cut 'no threat to South': Gilmore
A potential cut in the North's corporate tax rate to the level in operation in the South is not a threat to the Republic’s economy, Tánaiste Eamon Gilmore has insisted.
Stormont ministers are lobbying the UK Treasury for the powers to set their own corporation tax in a bid to kick start the region’s flagging private sector by making it more competitive with the South.
On his first official visit to meet Executive counterparts in Belfast, Mr Gilmore said a tax cut in the North should be viewed as an opportunity for the whole island.
“We don’t see that as a threat at all,” he said.
“I think the challenge for both of us is to work together to grow the economy north and south, that certainly is something that is very much on the minds of the Irish Government and it’s something that we intend to work co-operatively on with the First Minister, Deputy First Minister and with the Executive here.”
The business levy in the UK currently sits at 26%, compared to 12.5% in Ireland.
Mr Gilmore held separate meetings with First Minister Peter Robinson, Deputy First Minister Martin McGuinness and Justice Minister David Ford at Stormont Castle before visiting a number of cross-community projects supported by the Irish Government.
“I think what we have to do in terms of the economy of the island is look at the opportunities there are for growth, look also at areas where we can more sensibly and perhaps more cost effectively deliver services both sides of the border,” he said after meeting Mr McGuinness.
He pointed to co-operation in the health sector and noted the planned cancer unit in Derry which has been part funded by Dublin and will treat patients from both jurisdictions.
A Treasury paper on stimulating Northern Ireland’s economy presented a cut in corporation tax as a potential option. Any reduction would be countered by a proportionate cut in direct funding from London through the block grant.
While the issue is out for public consultation it is unclear whether the UK Government will approve the move, mindful that other regions may accuse it of treating Northern Ireland favourably.
There is also a debate within the Assembly as to what rate should be set, with some parties suggesting a level even lower than that of Ireland's.
Union bosses are opposing the cut, claiming it will take much-needed public funding and put it in the pockets of big businesses.
Sinn Féin favour an equal rate on both sides of the border.
“We’ve always said in the course of this debate what we want to see is an equalisation of the positions,” the Deputy First Minister said after the meeting in Stormont Castle.
“I think that’s the sensible way to proceed, but all of this is going to be subject to negotiation.
“First of all we have to get the powers given to us by the Treasury and London and that’s been a bit of a battle because there are mixed signals coming from the Treasury and from the political end of things.”
He said he and Mr Robinson would be pressing the case once again at the Joint Ministerial Council meeting with British Prime Minister David Cameron and Scottish and Welsh leaders in London next week.
“Obviously we are in the lead in relation to the lowering of corporation tax, we want to see that happen but it has to make economic sense from our perspective, there are costs attached to it that we have to take into account whenever we move forward,” said Mr McGuinness.
“The main thing is to get the power devolved to us. From a party political perspective Sinn Féin has been arguing for more levers to be given to our Executive.
"The granting of the power to lower the rate of corporation tax I think will be a huge boost and will fit in well with trying to develop an all-island economy and do that without threatening anyone’s allegiance – I think we all know that there are things we can do to benefit our citizens north and south without it impinging in any way on the allegiances of anybody within this Executive.”
