Madam, - In its policy document "North-South makes sense", the SDLP outlines its position on a harmonised corporation tax rate of 12.5 per cent across the island (The Irish Times, February 14th). If such a proposal were implemented, it would create an even more distorted state of economic affairs in Ireland than exists already.
Currently the UK taxpayer underwrites the public budget of Northern Ireland to the tune of €12 billion a year, which is a luxury the Republic does not have. If the tax rates between the two jurisdictions were harmonised, this would put businesses in the Republic, especially in economically disadvantaged border areas, at a crippling disadvantage to their Northern competitors, since the Northern exchequer would still have the cushion of transfers from London.
In a level playing field, where both jurisdictions had to fund their own expenditure independently, the synergies created for multinational companies by the SDLP proposals could be of great benefit. However in the current climate, and that of the foreseeable future, it would be grossly cynical to entertain such a notion. In terms of stimulating trade, both cross-Border and within the EU, it would make infinitely more sense to introduce the euro as the currency of Northern Ireland to facilitate trade and eliminate currency risk and fluctuations.
It is apparent that trade with Britain, with its almost 60 million people, is not enough to create a self-sufficient Northern Ireland economy. However, enhanced trade with the further 300 million people of the eurozone could make a great difference. - Yours, etc,
ALAN Ó CLÉIRIGH, Kilkerley, Dundalk, Co Louth.