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Bloody Sunday, election, Irish, Ireland, British, Ulster, Unionist, Sinn Féin, SDLP, Ahern, Blair, Irish America

DUP & UUP clash over financial incentive package

(by Liam Clarke, Sunday Times)

Stormont's ministers have had their first public clash since the assembly was reinstated last week.

Peter Robinson, the finance minister and deputy leader of the Democratic Unionists, predicted that the exchequer may still come forward with "an incentive package" to offset the republic's competitive advantage of a lower rate of corporation tax in attracting outside investors.

Robinson rounded on Michael McGimpsey of the Ulster Unionists for predicting that negotiations with Gordon Brown for more money would be fruitless.

McGimpsey told the BBC: "Brown has no reason to give us extra money and, as far as I can see, there's no extra money there. We're on our own – it's the block grant and it's dealing with resources that we can see."

Robinson hit back, saying, "Quite frankly I don't think that it is McGimpsey's role to be speaking on issues which are not his department. Negotiations are still continuing so it is mad for me or any other minister to talk about it."

Robinson pointed out that Sir David Varney, a former head of HM Revenue and Customs, is conducting a review of Northern Ireland's industrial incentive package, to be finished in September.

"Sir David's team is comparing the incentive package that Northern Ireland has with the republic and weighing up the competitive issues. It is absurd for any minister, while that review is being carried out, to reach conclusions."

Irish corporation tax stands at 12.5% and is regarded as a key driver in the country's economic performance. It has helped to secure more than 1,000 foreign investments in areas including technology and pharmaceuticals. These, in turn, have created a huge pool of highly skilled workers, many of whom have gone on to develop their own businesses. The north's economy is heavily reliant on the public sector.

Corporation tax in Britain stands at 28%, recently reduced from 30%. All the main Northern Ireland parties, the unions and employers bodies support a reduction in northern rates.

So far, the government has refused to move, arguing it cannot have different tax rates in different parts of the UK.

May 13, 2007

This article first appeared in the Sunday Times on May 13, 2007.