Gerald Nash (Louth, Labour)
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Question 118: To ask the Minister for Finance his views on the announcement in the recent UK budget that the British Government is considering applying a new 12.5% corporation tax rate to Northern Ireland; his further views that a new rate would affect the ability of the Border counties to attract higher levels of foreign direct investment; if he has plans to address this issue; and if he will make a statement on the matter. [7245/11]

Michael Noonan (Limerick City, Fine Gael)
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The British Chancellor of the Exchequer announced in his Budget Statement on 23 March 2011 that Her Majesty's Treasury would publish a paper on how to help the private sector grow in Northern Ireland. He indicated that the paper would consider the case for Northern Ireland having a lower rate of corporation tax than the rest of the United Kingdom and would also look at mechanisms for devolving power to vary the corporation tax rate to Northern Ireland. A consultation paper, entitled "Rebalancing the Northern Ireland Economy", was published on 24 March 2011. It sets out the various options that could be taken to support the rebalancing of the Northern Ireland Economy, including the issues involved in devolving power on corporation tax issues to the Northern Ireland Executive.

The paper does not make any recommendations but simply attempts to canvass views and submissions on the costs and benefits that a separate corporate tax rate would involve for Northern Ireland and the rest of the UK.

While the paper acknowledges the significant role that a reduced corporation tax rate could have in encouraging private sector investment and growth, it also acknowledges the risks that it would pose for the Northern Ireland Executive, including having to comply with the conditions of institutional, procedural and fiscal autonomy, under EU state aid rules.

As the Deputy will be aware, taxation is a matter of national competence and the issues raised in the consultation paper are first and foremost a matter for the UK Authorities.