Member of Parliament for Amber Valley


English Votes for English Taxes

On Tuesday 27th January, I asked the Secretary of State for Northern Ireland, Theresa Villiers, whether she thinks it is right for Northern Ireland to be able to set their own Corporation Tax rate, whilst their MPs are still able to vote on the rate of Corporation Tax in Great Britain, following the introduction of the Corporation Tax (Northern Ireland) Bill to the House.

The Bill seeks to make provision for and in connection with the creation of a Northern Ireland rate of corporation tax. I am keen to make sure that with the creation of a Northern Ireland corporation tax, Members of Parliament representing Northern Ireland constituencies are then not able to vote on the rate of corporation tax in England.

I have concerns about the practise of allowing Northern Ireland to set its own corporation tax to compete with us, without having any measures in place to prevent Northern Ireland MP’s to vote on the rate here in England. This means that Northern Ireland would be able to set a lower tax rate to compete with us and then for their MPs who sit in the House of Commons, will be able to vote on our rate of Corporation Tax.

I have concerns about the risk of encouraging tax avoidance by allowing companies to move there for a lower tax rate. More fundamentally, I am worried that, a Northern Ireland corporation tax rate set lower than what it is in the rest of Great Britain, will attract jobs and investment away from Great Britain.  I therefore believe that, before this Bill proceeds further, measures must be included in the Bill which deal with this issue so that MPs can only set taxes which their constituents will pay – it’s the same issue if we were to devolve income tax to Scotland. I am serving on the Corporation Tax (Northern Ireland) Bill Committee and I am committed to raising the issue of English Votes for English Taxes once again.

Nigel Mills MP: Is my right hon. Friend aware of the data which suggest that almost twice as much will be raised from companies moving from Great Britain to Northern Ireland than from those moving into Northern Ireland from overseas? If that is the case, does she think it fair that Members from Northern Ireland may vote on the UK-wide corporation tax rate as well as their own, when they are effectively competing with our constituents?

Theresa Villiers MP (Secretary of State for Northern Ireland): I emphasise that the new system is designed to deal with artificial avoidance. A number of measures are in place to prevent abuse of the new system; I will come to those in a moment. In relation to voting on taxation matters, my hon. Friend will be aware that ensuring that the devolution settlement is fair to the English as well as to the rest of the United Kingdom is an important matter under consideration by the House and by the political parties. I am sure it will be extremely important that we get the right outcome to ensure that the devolution settlement is fair across the board, but it is also crucial that we have a coherent and unified tax system.