Taxing Times
The call from seven leading business organisations for a reduction in the local level of corporation tax has won support from across the political spectrum. The DUP, the SDLP and the Northern Ireland Conservatives voiced their support whilst Sinn Fein linked the move to its wider demand for full "fiscal autonomy". (UPDATE: I should have also mentioned the UUP in that list but somehow missed
During Finance Questions, Sinn Fein's Cathal Boylan asked Sammy Wilson when he hoped to see the Treasury's paper on rebalancing the economy here. The paper is expected to address the Corporation Tax argument. Mr Boylan implied local politicians should be able to weigh up all the information in the paper before deciding on the budget.
This prompted a tart response from Mr Wilson, who reminded Mr Boylan that the Treasury paper was only due to be a discussion document. Stormont politicians, he argued, did not have the luxury of being able to study it before finalising their budget.
Sinn Fein took heart from today's announcement of wide ranging budget powers for the Scottish parliament. Although their spokesman Mitchel McLaughlin agreed with the SNP that the move did not go far enough, he clearly saw it as a step in the right direction.
Unionists may be prepared to embrace a lower local corporation tax rate. But they are wary of the wider powers demanded by Sinn Fein. Their fear: that "fiscal autonomy" may be the thin end of wedge towards the political independence republicans crave.
Of course not everyone is convinced by the corporation tax argument. This morning on ³ÉÈËÂÛ̳ Radio Ulster the tax specialist Richard Murphy (who advises the TUC) slammed the proposal. The Workers Party's John Lowry also voiced his opposition. Citing a previous ICTU report "Pot of Gold or Fools Gold", Mr Lowry claimed that setting up a differential tax regime could cause problems for supermarkets transferring goods from GB warehouses to NI stores.
What's far from certain is whether Owen Paterson has convinced the Treasury to change its mind since the Varney report rejected the lower corporation tax rate lobby. This week the Treasury released a document proposing changes to Corporation tax across the UK, including a lower 10p rate when corporations make profits as a result of new products developed within the country.
The set out a "road map" for various changes over the next three years, but it didn't include any reference to devolving corporation tax to Northern Ireland.
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