Declassified files: US peace plan would have seen UK give tax breaks to their firms

Jonathan Powell was sceptical of the US proposals
Jonathan Powell was sceptical of the US proposals

The US State Department proposed a form of ‘support’ for Northern Ireland which would have involved UK taxpayers subsidising US corporations, according to declassified files.

A confidential and personal July 1994 fax from Jonathan Powell in the UK’s Washington Embassy referred to a series of “very fluid, not to say half baked” ideas from a US State Department seeking to assist the peace process.

One proposal as part of a US package to incentivise US firms to invest in Northern Ireland was for the UK to cut its corporation tax for US corporations from 33% to 10%, to bring it into line with the rate in the Republic of ireland.

But this, Mr Powell highlighted, was “effectively asking us to finance their scheme”.

He attached a paper given to him by David Schafer in the State Department. It said that in the event of a “genuine political settlement” the US would “provide substantial financial assistance to Northern Ireland”.

The two-page paper said that “the President could announce that he will visit Northern Ireland to dramatize his support for the peace settlement reached by the parties” and it could be done “at a trade conference or at a Rose Garden ceremony” honouring the British and Irish Prime Ministers”.

The idea of a Clinton visit was “new to me”, Mr Powell said.