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Last Updated: Thursday, 2 November 2006, 13:54 GMT
Irish goverment to unveil package
Peter Hain and Gordon Brown
Peter Hain said the money offered by Gordon Brown was generous
The Irish government is to unveil its own financial package for Northern Ireland after examining the plans revealed by the Chancellor.

Chancellor Gordon Brown said on Wednesday the British government would provide 50bn over the next ten years.

Irish deputy prime minister Michael McDowell said he would consider Mr Brown's package carefully.

Mr Brown linked the spending package to the establishment of a Stormont executive.

Michael McDowell, speaking in the Dail on Thursday, said: "This is a significant programme of expenditure over a number of years and we are now studying it to see what is already committed and what is new.

"The Irish government will make its own intentions known in relation to additional new expenditure to aid the peace process in Northern Ireland and infrastructural development there when we have an opportunity to study the British package."

Following their meeting with Mr Brown in London, Northern Ireland's political parties said more work must to be done to finalise the so-called peace dividend.

However, the parties said they were disappointed that the chancellor did not offer to cut corporation tax.

They want corporation tax reduced from 30% to match the Irish Republic's rate of 12.5%.

The DUP called the funding an "opening offer" which was no more than 3bn of new money, while Sinn Fein leader Gerry Adams said it was "still early days".

Michael McDowell
Michael McDowell said the expenditure was significant

However, according to Northern Ireland Secretary Peter Hain, the package on offer represents an "extraordinary settlement".

One economist said the new money could be as little as 2.5bn, but Mr Hain said even this sum would be generous.

"If it were only 2.5bn, people ought to be grabbing it before the chancellor has a chance to close his red box," Mr Hain told the BBC's Good Morning Ulster on Thursday.

"No other part of the United Kingdom, including Wales which I also represent as its secretary of state, has got anything like this package."

Mr Brown, who announced the package after Wednesday's talks with Northern Ireland's political parties, said the funding would be worth 50,000 per household in Northern Ireland.

Mr Hain said EU law banned the government from lowering corporation tax levels solely in Northern Ireland.

"There is a problem in that our legal advice tells us that under the Azores ruling, it is illegal under EU rules for a member state to allow one region to adjust its level of corporation tax while maintaining another level in the rest of the country.

"In other words, you can reduce the level of corporation tax for everybody in the UK or nobody at all. Sinn Fein and the DUP have challenged that - we are getting our Treasury experts on to it."

Mr Brown said he was still considering the parties' views on the package, but there was much there to attract inward investment and stimulate the economy.


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