IAN PAISLEY and Alex Salmond have been aptly described as an odd couple, but on a closer look it is not difficult to see what their respectively strong unionism and nationalism have in common.
Their growing relationship was on view during Dr Paisley's visit to Edinburgh last week, where they pledged to work together on transport, energy and taxation in a devolving United Kingdom. Northern Ireland and Scotland have a common interest in co-operating on their approach towards Whitehall and Westminster, where both men got to know one another well as leaders of minority parties from 1997. They resented being marginalised by the larger parties, and have since found common cause in deepening Northern Ireland and Scottish devolution.
In Edinburgh Mr Salmond said a recent tripartite agreement between the Scottish, Welsh and Northern Ireland administrations to press the British government on tax means that "progress is possible" on this and other economic issues. Last weekend British prime minister Gordon Brown told Scottish BBC he favours a review of the 10-year devolution experience, including taxation policy. "There is an issue about the financial responsibility of an executive or an administration that has £30 billion to spend but doesn't have any responsibility for raising . Now the question is, just as local government has to raise some of its money through council tax , just as many other areas in the world where there are devolved administrations have to raise money through assigned taxation, is there a case for doing so?"
This is a substantial departure in Labour Party policy on the subject. Up to now the party has rejected the idea of conferring separate tax raising authority on devolved administrations. It has preferred to maintain the centralised block grant system which distributes funds proportionately to the UK's different regions through the Barnett formula devised in the 1980s. Mr Brown is having to think politically about the issue because he and the Labour Party are under real pressure from Mr Salmond's Scottish Nationalists. The SNP has skilfully exploited its time in office by adopting increasingly autonomous spending programmes without having responsibility for taxation. It has gone on to link them to their demands for Scottish independence, provoking the Labour Party to propose an alternative constitutional debate.
A central review of fiscal powers within devolution would make it easier for Dr Paisley and Mr Salmond to press home their demand for reductions in corporation tax to attract investment. Next May's investment conference in Northern Ireland would be made much more attractive, especially for US companies if that were possible. Reducing corporation tax there was rejected in Sir David Verney's last report, but he is to recommend other economic stimulants before then. These latest political moves show the question is still open.
This is a good example of the inter-relationship between developments in Britain and north-south issues in Ireland.