No low tax for Northern Ireland

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Some welcome news from the FT:

Plans by Northern Ireland's new power-sharing executive to stimulate foreign investment by cutting corporation tax have been dashed.

In meetings with local politicians and business leaders last week Sir David Varney, a former head of the UK Inland Revenue appointed by Gordon Brown to consider changes in the province's tax policy, poured cold water on the idea.

Demands that business tax rates be dropped to 12.5 per cent to allow the province to compete with the Irish Republic would encourage transfer pricing, he said.

Quite right. And is also now proven, offering such tax rates does not work.

The FT notes:

The decision will come as a serious blow for the ambitions of the new assembly and executive. It had set great store by persuading the government of the case for special treatment for Northern Ireland.

All I can say is that they didn't do there research very well then. I would have thought one phone call would have ended this hope.

Scotland please note......