Northern Ireland: Piggybacking the Celtic Tiger

Robin Sheeran The Politics Show Northern Ireland

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Bertie Ahern: the low-tax Taoiseach

Bertie Ahern loves the idea; Peter Hain says it is the only way forward for Northern Ireland. The concept of an all-island economy is creeping up the agenda.

The prospect of piggybacking on the success of the Celtic Tiger holds a powerful attraction for many business people, but one major obstacle stands in the way.

The remarkable economic success of the Republic in the past 15 years has been based to a large degree on low rates of corporation tax.

As the Taoiseach, Bertie Ahern, said in a recent speech in California: "We understand the importance of taxation for international business.

"We have one of the lowest corporation tax rates in the world, as well as low taxation of labour.

"This is a cornerstone of our success and it will continue."

Calls to slash the levels of corporation tax in Northern Ireland from the UK level of 30% to match the 12.5% level in the Republic are now commonplace.

Even the DUP can see the advantages.

The party's Trade and Industry Spokesman, David Simpson, had this advice for Gordon Brown ahead of his recent budget:

"Northern Ireland would be every bit as attractive to inward investment as the Republic in terms of language, location, educational attainment, skills levels and infrastructure but the lower corporation tax rate does not make for a level playing field."

This week on Politics Show from Northern Ireland, our reporter, Rosy Billingham, considers the prospects for a genuine all-island economy.

What is the likelihood of the Chancellor varying the rate of corporation tax within one part of the UK, and what would the reaction be in Wales and Scotland?

In a recent newspaper interview the Secretary of State, Peter Hain, is quoted as saying, "You can't have a differential tax regime, whether it is corporation or petrol tax, across different regions of the United Kingdom."

Despite this blunt rejection the calls for reform of the current tax regime continue.

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Jim Fitzpatrick presents Politics Show from Northern Ireland

The Politics Show from Northern Ireland presented by Jim Fitzpatrick.

Tune in to the Politics Show from Northern Ireland on BBC One on Sunday 23 April 2006 at 13.50pm.

You get a second chance to see the programme again that night, at 23.15 on BBC One.

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