Examination of Witnesses (Questions 40-47)
MR VINCENT
SHERIDAN, MR
EAMONN DONAGHY
AND MR
BRIAN KEEGAN
27 FEBRUARY 2008
Q40 Stephen Pound: I agree with you
as an incentive. One of the points Mr Donaghy made, which I thought
was extremely powerful, when he talked about structural problems
within Northern Ireland he talked about a large pool of people
who are not economically engaged, and talked about the disbalancing
effect of the overhang of public investment, to which we can probably
add the large number of people engaged in agriculture and their
age, there is a whole range of factors. Varney is now producing
what we would colloquially call Varney II. What would you like
to see collectively as the main thrust of Varney II? Would you
like to see those structural internal issues within Northern Ireland
addressed or do you think Varney II should simply re-visit Varney
I in the light of your extremely good response to it?
Mr Sheridan: I will pass over
to Eamonn but we have made a submission to Varney II. We did not
bury our heads in the ground—
Q41 Stephen Pound: I suspected you
had not.
Mr Sheridan: If you read our response
to Varney, we come back again to the importance of the corporation
tax rate, but we have made a detailed submission to Varney II.
Q42 Chairman: You have seen Sir David
and discussed it, have you?
Mr Donaghy: We met with Sir David
back in June. I suppose one of the things that I was disappointed
with in Varney back in December was the fact that there was a
report that was produced the Monday before Christmas that basically
said, no, you cannot have any corporation tax, let us take this
off the table and move on. I believe this is such an intrinsic
and important part of the future of the economy in Northern Ireland
that it deserves a wider articulation and a wider debate than
just the report that Sir David has produced. We are hugely grateful
today to at least air our views on this issue. I would highly
commend to the Committee that this is an issue that you may wish
to consider further because I do believe that it is of fundamental
importance that the economy of Northern Ireland is fostered and
encouraged, not only to help us come from where we have been but
also to help to become stronger members and contributors to the
overall economy.
Q43 Stephen Pound: For the record,
you are saying that Varney II should still have at its centrality
the issue of corporation tax?
Mr Donaghy: We believe that, yes.
Lady Hermon: Do the terms of reference
actually allow the Varney II to look at that?
Q44 Chairman: Are you not banging
your head against the proverbial brick wall?
Mr Donaghy: Sometimes it has felt
like that but if you give up too easily then it was not worth
fighting for. I genuinely believe that this is a key issue and
I would greatly commend the Committee to consider that in its
deliberations.
Mr Sheridan: It is a brick wall
for us but it might not be a brick wall for you and the Committee.
Our hope is that by coming here today we might engage your interest
in the subject and the passion which we feel for it and instigate
some further inquiry into Varney I.
Q45 Chairman: Your passion is clearly
undiminished. You are anxious that in spite of the fact that Varney
has gone to Varney II that he should indeed turn that up and look
again at corporation tax, which you seem to be implying is the
golden key?
Mr Sheridan: It is. It is not
the only key but I think an awful lot of the other things are
in place. It is the stimulant that will capitalise on all of the
other good things that are there. I would have serious concern
that the Northern Ireland economy would not be able to capitalise
on the very many positives without it having a rate of corporation
tax comparable to the Republic.
Chairman: I see. Would it be a good quid
pro quo if the Republic raised the fuel duty—
Stephen Pound: I was very carefully not
mentioning that, Chairman.
Q46 Chairman: You will know that
this Committee has actually made certain recommendations in that
field because of the problems caused there which must impinge
upon many of the businesses that you serve and the people to whom
you give advice. Does one good turn deserve another?
Mr Sheridan: We have not got the
influence that you might ascribe to us but if we could help in
other ways, well then we are certainly open to suggestions.
Q47 Chairman: The offer of your services
is touching!
Mr Sheridan: Other rates of tax
were mentioned earlier on, but could I say that it is a big thing
for us as an Institute to get a hearing before this Committee
and we do appreciate that but it was not lightly sought and we
do really appreciate the importance of this. We will not be back,
and I will be bold enough to speak on behalf of my successors,
to talk about a unified rate of income tax or VAT or capital taxes
because they do not have the same potential one way or the other.
I cannot envisage any other issue where my Institute would be
seeking to influence a Committee of this nature.
Chairman: We appreciate your passion
and we appreciate your sincerity but we are faced with practical
problems that as politicians elected to the United Kingdom Parliament
we have to look at. This Committee has a specific and particular
responsibility with regard to the affairs of Northern Ireland.
Three members of this Committee serve on the Assembly and a fourth
member is from Northern Ireland, so we of course are very anxious
to see Northern Ireland prosper in every possible way. We are
very anxious to see the imbalance of employment which at the moment
is grossly distorted in favour of public service and we want to
see that dealt with. We are listening carefully to what you are
saying but the whole thrust of your evidence this afternoon has
been that whatever is done would be enormously helped if this
particular concession were to be made, and we have got to take
on board those recommendations in a United Kingdom context and
decide whether that is something that this Committee can recommend
or not. We have certainly listened very carefully to the points
you have made and you have made them with passion and conviction.
We know that you are dedicated to a prosperous island of Ireland,
both parts of it, and we share that sense of dedication. It is
whether this particular dilemma can be resolved in a way that
Varney thought it could not be resolved.
Stephen Pound: I would say, Chairman,
that we do have form in this area where an earlier Committee inquiry
dealt with the Aggregates Levy. There was a clear financial disadvantage
to companies operating in Northern Ireland against the Republic
and we were able to isolate that issue and make a recommendation
to the then Chief Secretary of the Treasury, who agreed on a reduction
in the Aggregates Levy in the North to prevent that competitive
disadvantage that was being felt, so we are on your side on this.
I cannot speak for the Committee but I think most of us are acutely
aware of the points you have made dramatically and with expertise
this afternoon and in the evidence to Varney.
Chairman: I have got to draw this to
a close because a division has been called five minutes early.
The bells are now ringing and we must go and vote but before you
go I would say that we cannot commit as a Committee at this stage.
We have got to reflect and deliberate on what you have said. We
are very grateful to you for taking the trouble to come. We wish
you great success in what you are doing individually and collectively
towards the economy of the whole island of Ireland. Thank you
very much.
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