TWO MPS from the Democratic Unionist Party have suggested that the deal struck by 26 members of the European Union last week may yet force Ireland to make concessions on its corporation tax rate.
Ian Paisley Jr and Nigel Dodds told the House of Commons that Ireland was set to face tremendous pressure from France, in particular, to raise the 12.5 per cent rate of corporate tax in the aftermath of last week’s deal in Brussels.
In a Commons debate on a motion backing Cameron’s stance in Brussels, Paisley said Ireland “will be forced to remove its beneficial low corporation tax as a result of this new arrangement”, and said Cameron’s stance meant the UK could still lower Northern Ireland’s rate if it wanted to.
“This nation can extend, to our part of the United Kingdom, the right to reduce our corporation tax. I know what side of the line I would rather be on,” Paisley said.
Dodds meanwhile told MPs that France and others “have a clear policy when it comes to corporation tax” and hinted that Ireland – which “has built its economic policy around that, to a large degree” – would have to pay close attention to the details of the deal.
The UK’s European minister David Lidington said the UK fully supported the Taoiseach in his attempts to resist a concession on its tax rates.
The Commons motion – which was itself proposed by Dodds and backed by the DUP’s eight MPs, was comfortably passed by 278 votes to 200.
Notably, however, all 57 of the MPs from the Liberal Democrats – the junior partner in Cameron’s coalition, which has criticised Cameron’s effective veto in Brussels – abstained from the vote backing the prime minister.
The warning from the DUP came after Micheál Martin yesterday expressed similar concerns to TheJournal.ie.
It was “unclear how our corporate tax rate is protected”, he said, expressing fears that Ireland could “come under increasing pressure in a German-French dominated intergovernmental union”.
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