Are Tories offering NI a trojan horse or a genuine gift?

Are Tories offering NI a trojan horse or a genuine gift?

Posted on January 7th, 2010 Conall McDevitt 4 comments

Alan Bridle the Chief Economist at the Bank of Ireland speculates today about the possibility of a conservative government introducing a lower corporation tax for Northern Ireland.

According to Mr Bridle a delegation of senior conservatives is expected here soon to promote a regional approach to economic development through lower corporation tax and the designation of Northern Ireland as a regional enterprise zone, which would unlock . However Mr Bridle is also suggesting that the quid-pro-quo for such measure could be a reduction in the block grant for this region.

There is a cross party consensus that a harmonisation of corporation taxes across this island would be a good thing. There is also likely to be a cross party consensus that a reduction in the block grant would be a very bad thing.

As for regional enterprise zones, they have a chequered record and many experts will argues they do little else except stimulate capital investment (i.e. building). The last thing we need is another boom based on nothing more then property. What we need is quality inward investment, a focus on innovation and genuine support for local business to create sustainable employment.

This is one to keep a close eye on. Northern Ireland is not over funded from the block grant, in fact there are major areas in which this region has been underfunded. That should be the starting point for any discussions between the Executive and a conservative British government.

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4 responses to “Are Tories offering NI a trojan horse or a genuine gift?”
1. Alan January 7th, 2010 at 10:34
  
  So the local parties want less tax and more spend.
2. Jeff Peel January 7th, 2010 at 12:02
  
  Conall this shows typical Northern Ireland consensus leftie thinking. There’s no such thing as a free lunch. A reduction in corporation tax – if it represents all the up-sides that many argue in terms of stimulating inward/indigenous investment – is a strategic way forward. The short term cost of reduction is not that great because Northern Ireland doesn’t actually send much corporation tax to the Treasury (our commercial sector is tiny in relative and actual terms). Owen Paterson is certainly of the view (I’ve discussed the matter with him in the past) that the block grant would have to be reduced to cover the cost of a CT reduction. Hopefully that might focus minds at the Executive to strip some vastly wasteful public spending from the NI departments and to clear away a swathe of quangos.
3. Debrah Marinaccio January 23rd, 2010 at 06:08
  
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4. Leprechauns Ireland January 23rd, 2010 at 08:07
  
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