I welcome the news from Conor Murphy, who is Northern Ireland's new finance minister, that he has no plans to cut the corporation tax rate there, at least as yet. As the BBC has reported:
Mr Murphy said a change in economic and political circumstances means the issue has now "receded".
Speaking on BBCNI's Good Morning Ulster, he expressed concern about what cutting the tax would mean for public services in Northern Ireland.
A cut in the tax would mean less revenue is collected for the Treasury.
Under state aid rules, the Northern Ireland executive would have to make up the shortfall through a cut in its block grant from Westminster.
He is right. But all of this has been known for a long time. I campaigned on this issue, and broadcast on it a great many times in Northern Ireland over the period 2010 to 2015, tirelessly pointing out how harmful it would be. Time and again I came up against opposition, fuelled in the main by KPMG Belfast it seemed to me, which sought to align the corporation tax rates north and south of the Irish border, without those seeking to do so seemingly having any understanding that this did not create a level playing field in tax, or help Norther Ireland at all.
I am pleased to see that common sense has prevailed. I hope it continues to do so.
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The idea was always predicated on the proposition that businesses would choose NI if it had tax rates matching the Republic. In reality, businesses choose Ireland for human capital reasons and low tax is a bonus for a handful of mainly American companies that engage in profit shifting & transfer pricing gamesmanship on intellectual property.
I am not sure I wholly agree
The real issue is that the tax base north and south is very different
Ireland is in a predicament – having encouraged the low tax seeking corporations to it post office address, it is going to suffer some downturn from Brexit and the EU will catch up with their imbalanced tax rates that have given them some bunce to date.
A little reminiscent of many years ago when EU money built lots of stuff, including many nicely restored harbours.
And with BoJo’s great achievement with the Withdrawal Bill, Northern Ireland is set to flounder too.
I don’t say this with any cheer – it is a totally miserable situation to be in.
Brexit 50p anyone?