Fresh doubts over whether SF will cut corporation tax

The Good Friday Agreement Generation debate on BBC One.
Photo by William Cherry
The Good Friday Agreement Generation debate on BBC One. Photo by William Cherry

Just a week after Martin McGuinness appeared to firmly commit Sinn Fein to slashing corporation tax, last night fresh doubts emerged as to whether the party will agree to the tax cut for big business.

The policy has long caused difficulties for Sinn Fein because it is a classic example of right wing economics, while Sinn Fein claims to be firmly left wing and has allied itself to several Marxist movements around the world.

Last Wednesday, the Deputy First Minister said during the UTV leaders debate: “I’m as resolute on the issue of [cutting] corporation tax as Arlene.”

Speaking last night during a BBC pre-election debate in front of an audience of first time voters, Sinn Fein’s Chris Hazzard gave no such firm commitment and repeatedly stressed that the cut would only happen if it was judged to be “affordable”.

When asked “why you think it’s appropriate to hand tax cuts to the rich, rather than the bottom of society”, Mr Hazzard said: “Corporation tax isn’t going to be the silver bullet that a lot of people think that it is.

“But a lot of [economists] would say that corporation tax and the reduction of it will be an advantage when we go to create high-end FDI jobs and invest that in...”

Striking a markedly different tone to that of Mr McGuinness last week, Mr Hazzard repeatedly qualified the possibility of any cut in corporation tax by saying that it would only happen “if it is affordable”.

The South Down candidate said: “The Fresh Start Agreement says ‘if it is affordable, we will agree’.”

Veteran West Belfast Sinn Fein candidate Alex Maskey tweeted in response: “Chris Hazzard makes clear that corporation tax cuts are wholly dependent on affordability and quality jobs created.”

However, the exact wording of the agreement presents a much firmer picture of what will happen, even setting a date on which the cut will be implemented and the exact percentage at which it will be set.

The Agreement – signed by the DUP and Sinn Fein in November – said: “The Executive is committed to an affordable and more competitive Corporation Tax rate... On this basis: The NI Executive commits to a commencement date of April 2018, and a Northern Ireland rate of 12.5 per cent.”

The significance of that decision was that it allowed the Executive two and an half years in which to market the new tax rate in order to tempt investors to create jobs in the Province.

It is not the first time that questions about Sinn Fein’s commitment to the deal have emerged.

Just a day after the agreement, Sinn Fein’s leader on Belfast City Council, veteran republican and former IRA prisoner Jim McVeigh, wrote an online message to reassure supporters about the deal. In it, he said: “As for corporation tax, we won’t be signing up to any cut unless we can afford it and we won’t be able to afford it any time soon comrades! This is about taking further fiscal powers back to Ireland. About giving us the power to reshape our economy.”

That comment was followed by a three-page newsletter distributed by Sinn Fein’s international department days later in an attempt to sell the deal to the party’s supporters.

Despite the corporation tax cut being a major element of the deal, with a cost to Stormont of around £240 million, the document made no reference whatsoever to the issue.