I have become one of the most vociferous opponents of reduced corporation tax rates for Northern Ireland. I did not intend to be so. I just thought it was poor idea and wrote a report about it for the UK and Irish trade unions.
I’m pleased to note that the FT has now joined the small but effective chorus opposed to this move, saying in an editorial today:
Owen Paterson, the secretary of state for Northern Ireland, says that giving the province the right to vary its corporate tax rate would be “the economic equivalent of the peace process”. Mr Paterson’s enthusiasm has helped the issue up Britain’s political agenda; the government is now completing a consultation on it. Given Northern Ireland’s high levels of joblessness and welfare dependency, the local appeal of the proposal is understandable. For the UK as a whole, however, it raises more problems than it solves.
As it then notes, those problems include senseless tax competition, not least with Scotland and of democratic accountability. As it concludes:
These complications are a heavy price to pay for a reform that will produce at best marginal economic benefits. George Osborne, the UK chancellor, has pledged to await the outcome of the consultation on Northern Ireland’s corporate tax rate before deciding on Scotland’s. He should tell both to go back to the drawing board.
But better still, just scrap the idea.