Mr. J. Enoch Powellasked the Secretary of State for Trade and Industry what steps he proposes to take to eliminate the disadvantages which accrue to the United Kingdom in consequence of the exploitation of tax concessions available on manufactures assembled in the Irish Republic, details of which have been brought to his attention by the right hon. Member for South Down.
§ Mr. Norman LamontThe right hon. Gentleman has brought to my attention an article appearing inInvestors Chronicle which suggests that certain tax concessions extended by the Irish Republic operate to the disadvantage of other manufacturing nations such as the United Kingdom.
I do not accept that the picture painted by the article is entirely accurate. Certainly the special Irish tax rate of 10 per cent. on manufacturing industry is attractive to potential overseas investors, though less so than the former tax exemption for exporters which was abandoned in the face of Community pressure. However, action has already been taken to establish a system of corporation tax relief grants in Northern Ireland. Moreover, the corporation tax 1003W reform package announced in the last Budget by my right hon. Friend the Chancellor of the Exchequer will result in an improved tax climate which we believe will stimulate productive investment and ensure that successful projects can earn a good commercial post tax rate of return.