Back in 2006, the case for devolving corporation tax powers to Northern Ireland was championed as an economic game-changer. Nearly 20 years later, the idea remains strong\u2014but it\u2019s been quietly shelved, avoided, or kicked into the long grass. I admit that in the intervening years there have been a lot of political\u00a0\u00a0developments locally and internationally. Not all of them have been conducive to the implementation of such a policy, so that\u00a0\u00a0hesitation may be understandable. This, combined with the pressures on public spending, but in truth, it\u2019s a strategic mistake.<\/p>\n
Now, more than ever, Northern Ireland needs a bold, confident approach to attracting investment, creating high-value jobs, and turning our unique economic position into real, tangible opportunity. A reduced rate of corporation tax, properly introduced and strategically managed, could play a key role in that.<\/p>\n
Andrew Webb, Chief Economist at Grant Thornton Northern Ireland, helped develop the original economic model for lowering the rate. At the time, he called it \u201cthe most important thing I\u2019ll ever work on.\u201d His argument was, and still is, compelling: if Northern Ireland could match or approach the Republic of Ireland\u2019s 12.5% rate, we could become a highly attractive destination for foreign direct investment (FDI), particularly in tech, life sciences, and advanced manufacturing. We could position ourselves as a bridge between the UK and EU, offering dual market access, skilled labour, and lower operating costs than other parts of these islands.<\/p>\n
But good ideas are rarely enough on their own. As Andrew Webb has more recently acknowledged, the financial and political hurdles are real. Any reduction in the tax rate under current arrangements would trigger a reduction in our block grant from Westminster\u2014potentially costing Northern Ireland hundreds of millions per year. That\u2019s a daunting prospect when our health service, education system and basic infrastructure are already under severe pressure. Whilst I don\u2019t accept the \u201cbegging bowl\u201d analogy in any way, I also know that continuing to put forward the argument that we should expect more from the treasury is now acutely flawed and in need of a total rethink! Starmer and Reeves have bigger fish to fry! (another Slugger article , for another day!)<\/p>\n
This, to me, is a reason to readdress the concept and It\u2019s a reason to do the harder work of building a sustainable model around it.<\/p>\n
The real issue is not the tax cut\u2014it\u2019s the absence of a wider plan. For almost two decades, Northern Ireland has failed to develop a joined-up, cross-sector strategy that ties tax policy to skills development, infrastructure investment, innovation support and economic transformation. We\u2019ve had time to build it. We just haven\u2019t.<\/p>\n
In doing so, we\u2019re missing a huge opportunity\u2014particularly when it comes to our young people.<\/p>\n
Northern Ireland has one of the best third-level education systems in the UK and Ireland. Our universities consistently produce graduates in engineering, computing, business, and life sciences\u2014exactly the kind of talent that global investors want. And yet, far too many of those graduates face a job market that doesn\u2019t reflect their qualifications. We are a region of over-educated and under-employed young people. That is a policy failure.<\/p>\n
Reducing corporation tax alone won\u2019t fix this. But if we do it in tandem with a targeted FDI strategy, investment in digital infrastructure, and real support for innovation and enterprise, we can start to create the high-value jobs these graduates deserve. We can give them a reason to stay\u2014and a reason to believe their future lies here.<\/p>\n
Of course, none of this works without political stability and public trust. The constant stop-start nature of devolution undermines investor confidence and chokes long-term economic planning. But the answer isn\u2019t to keep kicking the can. The answer is to build consensus, design a credible model for phased implementation, and engage the public in an honest conversation about trade-offs, opportunity, and ambition.<\/p>\n
Andrew Webb is right to call for that kind of political honesty. He recently wrote:\u00a0\u201cIt is time for honest political leadership and public engagement. Citizens deserve to be informed about the choices facing our economy.\u201d\u00a0That applies to corporation tax just as much as to water infrastructure, fiscal reform, or skills investment.<\/p>\n
Northern Ireland has a rare economic advantage: dual market access, a strong education pipeline, global diaspora links, and competitive costs. But we have to stop selling ourselves short. The political cover for reducing corporation tax has existed for years. The economic case is still strong. What\u2019s missing is the courage to act, and the strategy to do it well.<\/p>\n
It\u2019s time to start talking about the possibility of a corporation tax reduction again. It\u2019s also time to start building the conditions that will let us finally deliver.<\/p>\n
<\/p>\n
Eugene\u00a0Reid is a keen observer of all things business and politics. A former elected representative who has had a career working across the private, public and voluntary sectors! Bringing a unique perspective from a diverse and varied background.<\/p>\n
\tDiscover more from Slugger O’Toole<\/p>\n
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