Joe McHugh (Donegal North East, Fine Gael)
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Question 50: To ask the Minister for Enterprise, Trade and Innovation his views on rebalancing the Northern Ireland economy consultation paper that was published in March 2011 by the British Treasury; if he will respond to the invitation for submissions in view of the paper's potential implications for enterprise, employment and trade here and on this island; and if he will make a statement on the matter. [7162/11]

Richard Bruton (Dublin North Central, Fine Gael)
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The recently launched UK Government's consultation document on "Rebalancing the Northern Ireland Economy" was developed against the background of an aim to increase the size of the private sector and drive faster economic growth in Northern Ireland. The consultation paper sets out options that could be taken to support rebalancing of the Northern Ireland economy, including the issues involved in devolving the power to vary the corporation tax rate for profits in Northern Ireland.

The document does not at this stage reach specific conclusions, but merely seeks views on the options raised. In keeping with normal Government policy of not commenting in this type of forum on the economic policy regime in other EU jurisdictions, I do not propose to make a submission on behalf of the Government on the issues raised in the consultation paper.

However, in the arrangements established under the British/Irish agreements it is of course a long-established practice that Governments in Ireland work closely with the Northern Ireland Executive and with the UK Government to achieve economic and social development on the island of Ireland. Our involvement in promoting the competitiveness and development of the Northern Ireland economy, through involvement in and financial contribution to cross-border initiatives, has resulted in benefits to both parts of the island.

A stronger and more balanced economy in Northern Ireland should not be seen as something about which we should be in any way defensive, but rather as something that would create mutual gains North and South. The existing North/South bodies work on an all-island basis to secure economic development. There is a long history of co-operative action between agencies such as Enterprise Ireland and Invest Northern Ireland in order to achieve mutual benefit together that can be greater than what they might achieve separately.

In relation to inward investment, circumstances in the Northern Ireland economy have been different to those in the South. In general, Northern Ireland has had higher corporation tax rates, but lower wage and other costs. Because GDP per head in Northern Ireland has in recent years been lower than in the South, it has been possible for some industrial grant rates in Northern Ireland to remain higher than in the South. But when it comes to attracting inward investment, locations in Ireland must compete with alternative locations all over the world, not just with locations in Europe. For an individual project, it will often come down to a situation where a foreign multinational will choose between locating in Dublin or in Singapore or in Switzerland. It very rarely comes down to a choice between Dublin and Belfast.

I therefore welcome any moves to increase economic growth in Northern Ireland. The development of a world-class all-island economy is of strategic importance and strongly complements our mission to accelerate the development of world-class Irish companies. The challenges and issues faced by companies are shared throughout the island. By promoting an all-island economy we can build our competitive advantage internationally, target the economic problems that persist, and deliver better services for all companies and individuals.