Corporation Tax
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House of Commons Northern Ireland Affairs Committee Corporation Tax First Report of Session 2010–12 Volume II Oral and written evidence Additional written evidence is contained in Volume III, available on the Committee website at www.parliament.uk/niacom Ordered by the House of Commons to be printed 18 May 2011 HC 558–II [Incorporating HC 803, HC 919 and HC 951] Published on 9 June 2011 by authority of the House of Commons London: The Stationery Office Limited £21.50 The Northern Ireland Affairs Committee The Northern Ireland Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Northern Ireland Office (but excluding individual cases and advice given by the Crown Solicitor); and other matters within the responsibilities of the Secretary of State for Northern Ireland (but excluding the expenditure, administration and policy of the Office of the Director of Public Prosecutions, Northern Ireland and the drafting of legislation by the Office of the Legislative Counsel). Current membership Mr Laurence Robertson MP (Conservative, Tewkesbury) (Chair) Mr Joe Benton MP (Labour, Bootle) Oliver Colvile MP (Conservative, Plymouth, Sutton and Devonport) Mr Stephen Hepburn MP (Labour, Jarrow) Lady Hermon MP (Independent, North Down) Kate Hoey MP (Labour, Vauxhall) Ian Lavery MP (Labour, Wansbeck) Naomi Long MP (Alliance, Belfast East) Jack Lopresti MP (Conservative, Filton and Bradley Stoke) Dr Alasdair McDonnell MP (SDLP, Belfast South) Ian Paisley MP (DUP, North Antrim) David Simpson MP (Democratic Unionist Party, Upper Bann) Mel Stride MP (Conservative, Central Devon) Gavin Williamson MP (Conservative, South Staffordshire) The following members were also members of the committee during the Parliament: Stephen Pound MP (Labour, Ealing North) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/niacom. Current Committee staff The current staff of the Committee are Mike Clark (Clerk), Duma Langton (Inquiry Manager), James Bowman (Senior Committee Assistant), Becky Crew (Committee Assistant), Karen Watling (Committee Assistant), Becky Jones (Media Officer) and Ravi Abhayaratne (Committee Support Assistant). Contacts All correspondence should be addressed to the Clerk of the Northern Ireland Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 2173/1341; the Committee’s email address is [email protected]. Witnesses Corporation Tax in Northern Ireland Wednesday 27 October 2010 Page Eamonn Donaghy, Head of Tax, KPMG Belfast; Member, Northern Ireland Economic Reform Group; and Chair, Tax Committee, Institute of Chartered Accountants and Victor Hewitt, Director, Northern Ireland Economic Research Institute and Member, Northern Ireland Economic Reform Group Ev 1 Jeremy Fitch, Managing Director, Clients Group & Business International, Invest Northern Ireland Ev 10 Brendan Morris, Chair, Northern Ireland Branch, Chartered Institute of Taxation, John Whiting, Policy Director, Chartered Institute of Taxation, and Martin Fleetwood, Tax Partner, PricewaterhouseCoopers Ev 16 Wednesday 10 November 2010 Terence Brannigan, Chairman, CBI Northern Ireland and Nigel Smyth, Director, CBI Northern Ireland Ev 23 Sammy Wilson MP MLA, Minister of Finance and Personnel, Northern Ireland Assembly, Arlene Foster MLA, Minister of Enterprise, Trade and Investment, Northern Ireland Executive, Bill Pauley, Head of Strategic Policy Division, Department of Finance and Personnel, Northern Ireland Assembly, and David Thomson, Deputy Secretary, Department of Enterprise, Trade and Investment, Northern Ireland Executive Ev 30 Wednesday 17 November 2010 Mr Peter Bunting, Assistant General Secretary of the Irish Congress of Trade Unions (ICTU), and Mr Richard Murphy, Director, Tax Research Ev 41 Dr Esmond Birnie, Chief Economist, PwC Northern Ireland Ev 51 Wednesday 24 November 2010 Mr Tony McManus, Global Head of Enterprise Software and Head of Operations in Belfast, NYSE Technologies, and Mr Mark MacGann, Senior Vice President, Head of European Government Affairs and Public Advocacy, NYSE Euronext Ev 58 Mr John Simpson, Part-time Consultant, Visiting Professor at the University of Ulster Ev 64 Wednesday 8 December 2010 Roger Pollen, Head of External Affairs and Ken Redpath, Chairman of the Belfast City Branch, Federation of Small Businesses, Northern Ireland Ev 74 Wednesday 12 January 2011 Page Professor Rosa Greaves, Professor of European Commercial Law and Head of School of Law, University of Glasgow Ev 85 Mr Phillip Kermode, Taxation and Customs Union Directorate General, EU Commission Ev 92 Northern Ireland as an Enterprise Zone Wednesday 9 February 2011 Roger Pollen, Head of External Affairs, Federation of Small Businesses, Northern Ireland, Patricia O’Hagan, Member, Federation of Small Businesses, Northern Ireland, Aubrey Calderwood, Managing Director, Capitus, and Andrew Reid, Consultant, Capitus Ev 100 Wednesday 16 February 2011 Lord Heseltine, former Secretary of State for the Environment Ev 114 Professor Greg Lloyd, Head of the School of the Built Environment, and Professor of Urban Planning, University of Ulster Ev 123 Wednesday 2 March 2011 Nigel Smyth, CBI Northern Ireland Ev 133 Bill Scott, Director of Regional Economic Development, Invest Northern Ireland, and Oonagh Hinds, Manager of the Regional Business Team, Invest Northern Ireland Ev 143 Wednesday 9 March 2011 Mr John Simpson, Part-time Consultant, Visiting Professor at the University of Ulster Ev 152 Responsibilities of the Secretary of State for Northern Ireland Wednesday 30 March 2011 Rt Hon Owen Paterson MP, Secretary of State for Northern Ireland, Alan Whysall, Head of Constitution and Political Group Northern Ireland Office, and Jon Donaghy, Member of Constitution and Political Group, Northern Ireland Office Ev 162 Rebalancing the Northern Ireland Economy Wednesday 27 April 2011 David Gauke MP, Exchequer Secretary, and Mike Williams, Director, Business and Indirect Tax, HM Treasury Ev 180 List of printed written evidence Corporation Tax in Northern Ireland Page 1 CBI Northern Ireland Ev 196 2 Chartered Accountants Ireland and Chartered Accounts UIster Society Ev 199 3 Chartered Institute of Taxation (Northern Ireland Branch) Ev 192 4 Eamonn Donaghy, NIERG Ev 221 5 Professor Rosa Greaves Ev 221 6 Victor Hewitt, NIERG Ev 221 7 HM Government Ev 217 8 Invest Northern Ireland Ev 212 9 KPMG Ireland Ev 195 10 Northern Ireland Economic Reform Group (NIERG) Ev 207 11 PricewaterhouseCoopers LLP Ev 202 12 Commissioner Šemeta Ev 219 Northern Ireland as an Enterprise Zone 13 CBI Northern Ireland Ev 231 14 Capitus Ev 221, 237 15 Federation of Small Businesses Ev 224 16 Invest Northern Ireland Ev 229 17 Professor Greg Lloyd Ev 234 18 John Simpson Ev 235 List of additional written evidence (published in Volume III on the Committee’s website www.parliament.uk/niacom) Corporation Tax in Northern Ireland 19 Bombardier Aerospace Belfast Ev w4 20 Ireland-U.S. Council Ev w8 21 Northern Ireland Independent Retail Trade Association Ev w1 22 Peninsula Hi-Tech Ltd Ev w5, w10 23 Alan Trench Ev w11 Northern Ireland as an Enterprise Zone 24 Belfast City Council Ev w22 25 Bombardier Aerospace Belfast Ev w21 26 CB Richard Ellis Limited Ev w26 27 Limavady Borough Council Ev w18 28 Northern Ireland Council for Voluntary Action Ev w30 29 Richard Glynn, CEO of Ladbrokes Ev w21 30 Wilbert Garvin Ev w14 cobber Pack: U PL: COE1 [SO] Processed: [07-06-2011 16:03] Job: 008108 Unit: PG01 Source: /MILES/PKU/INPUT/008108/008108_o001 Corrected Corp Tax 558-i.xml Northern Ireland Affairs Committee: Evidence Ev 1 Oral evidence Taken before the Northern Ireland Affairs Committee on Wednesday 27 October 2010 Members present: Laurence Robertson (Chair) Mel Stride David Simpson Gavin Williamson Mr Joe Benton Jack Lopresti Ian Lavery Oliver Colvile Naomi Long Ian Paisley ________________ Examination of Witnesses Witnesses: Eamonn Donaghy, Head of Tax, KPMG Belfast; Member, Northern Ireland Economic Reform Group; and Chair, Tax Committee, Institute of Chartered Accountants, and Victor Hewitt, Director, Northern Ireland Economic Research Institute and Member, Northern Ireland Economic Reform Group, gave evidence. Q1 Chair: Okay, can I welcome you to the because, for want of a better word, we believe Committee? This is the very first session we are passionately that this is the right way for Northern holding in our inquiry into the levels of corporation Ireland to proceed. We are here as volunteers as tax, with particular reference to the levels in Ireland, opposed to paid hands. so we consider it to be a very important inquiry. It is also the first inquiry that this reformed Committee has Q3 Chair: Okay, thank you for that. One of the held since the election, so that is the importance that things that is provoking the discussion and the inquiry we attach to it, when there are so many other issues is the fact that, statistically at least, Northern Ireland that we want to come on to. So we consider this to be underperforms in terms of economics. Obviously, we a very important issue. Can I perhaps just ask you to are conscious of the effect that the Troubles have had introduce yourselves and tell us a little bit about your over many, many years, but what do you see are the organisation and what it does—what its aims and economic reasons for that underperformance? objectives are? Victor Hewitt: Perhaps I will take that. You are quite Eamonn Donaghy: My name is Eamonn Donaghy. I right about the underperformance. During my lifetime, am Head of Tax at KPMG in Belfast. I am a member my father’s lifetime and probably my grandfather’s of the Economic Reform Group, which Victor, my lifetime, Northern Ireland has always been down in colleague, will tell you a little bit more about, and I the bottom three of the UK regions.