Corporation tax North and South
BRITISH PRIME minister David Cameron’s expressed willingness at Stormont yesterday to open the door to a reduction in Northern Ireland’s 26 per cent corporation tax rate represents a welcome and significant advance in political devolution and economic empowerment. The decision is not made yet – the consultation process launched by the Treasury will not close until June 24th – but strong expectations have been raised which are unlikely to be dashed.
That said, the devil will be in the detail. Issues ranging from the timing and scale of the cut – some parties want to go lower than the Republic’s 12.5 per cent – to the scope of tax-varying powers devolved, have the potential sharply to divide the Northern parties from each other and from London. And, not least, on how to deal with the effects of the likely knock-on cut of some £300 million a year in the North’s block grant from London.