Friday, November 17, 2006

Tax cut pledge opens rift with London

A NEW row between the UK government and the Scottish Executive erupted last night after Jack McConnell promised to fight for lower business taxes north of the Border if Northern Ireland won a special deal from the Treasury. The First Minister told Holyrood yesterday that if Gordon Brown, the Chancellor, bowed to pressure to cut corporation tax in the province, he would argue for the same for Scotland. But last night, government sources in London attacked Mr McConnell over the remark, saying he had "blundered" in giving ground to nationalists' case for fiscal autonomy. The row broke out after Mr McConnell was challenged on reports that Mr Brown was going to give in to cross-party calls to cut Northern Ireland's business tax. Unionist and nationalists in the province have united to demand the cut to allow them to compete with the Republic of Ireland, where corporation tax is 12.5 per cent.

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