Pay up on corporation tax: Cameron

David Cameron has called for multi-nationals in the Republic of Ireland to pay the full 12.5 per cent rate of corporation tax as he prepares to decide on the devolution of that power to Stormont.

He recognised the “particular needs” of Northern Ireland with its land border with a low tax jurisdiction and “also the fact that some companies are not paying even that rate of corporation tax in the Republic of Ireland – something which I hope will over time change.”

His comments – at the Northern Ireland Conservatives’ reception in Birmingham – follow on from Barack Obama’s criticism of “magically Irish” US-based companies which chose incorporation in Ireland and negotiated agreements to pay minimal tax to the Irish exchequer.

The Prime Minister sought to deflect dissent over Mark Reckless’ defection to UKIP by criticising his constituency predecessor, Shaun Woodward, who joined Labour from the Tories in 1999. Woodward, who was Northern Ireland Secretary between 2007 and 2010, defended his move by saying that the Conservatives had moved too far to the right. He did not contest Witney in the 2001 general election but moved to the safe Labour seat of St Helens.

The Prime Minister’s full speech:

Well, thank you very much indeed … it’s great to be here. [I’ve got] just a few simple messages for our friends in Northern Ireland.

Message number one. It is absolutely right that the Conservatives are properly established in Northern Ireland.

I believe in our United Kingdom. We’ve just re-affirmed that United Kingdom with the referendum in Scotland and I believe a political party should be able to establish itself, be voted [for] and supported wherever they are in our United Kingdom. So thank you to the Northern Ireland Conservatives for all the work you do.

[The] second point I want to make … I hope you’ve seen from this government the very consistent record of engagement in Northern Ireland.

This is a vital part of our country. It has a number of particular needs and I hope you’ve seen whether through the decision to hold the G8 in County Fermanagh, whether [from] the investment conference that I hosted in Belfast or indeed through all the work that we’re doing on the Economic Pact that I’ve worked on with the First and deputy First ministers, we take Northern Ireland’s economic and political future very, very seriously.

Point number three is a particular request I have for all Conservatives in Northern Ireland which is that … we’re obviously at a very sensitive time in the discussions of how we make sure the devolved institutions continue to work. And obviously one of the great blockages in Northern Ireland at the moment is the issue of welfare.

Now, I know this is sensitive and difficult and we need the Democratic Unionists, the Ulster Unionists, the SDLP and Sinn to agree but I think there is a particular role that we Conservatives can do, I think, which is pointing out the massive success of welfare reform in the rest of our United Kingdom.

We’re here today at a party conference celebrating the fact that 1.8 million more of our fellow countrymen and women are in work, that half a million fewer are reliant on out-of-work benefits.

Welfare reform: yes, it is difficult, yes, it is a long-term policy but actually it is so much better for people to have the hope and the prospect of a job than to have a life on welfare and dependency. So I hope you can help with that call to Northern Ireland which I hope can unlock these discussions.

[The] final point from me is that we’re going to have to be very patient and very persistent in making sure that the devolved institutions continue to work and work well. It’s difficult because we’re going to have to address all of the issues: the flags, the parades, the past, all the issues over welfare and, of course, there is the prime issue – which I remain committed to – of making sure we can reach a special agreement over corporation tax in Northern Ireland.

It is not the only solution to the problem of having an over-large state sector in Northern Ireland and a private sector that is too small but I do recognise the particular needs there are when you’re sharing a land border with the Republic that not only has a very low rate of corporation tax – which is its perfect right – but also the fact that some companies are not paying even that rate of corporation tax in the Republic of Ireland – something which I hope will over time change.

It’s great to have the Ambassador from the Republic [Dan Mulhall] here. You’re extremely welcome, sir. I can’t think of a time when the relations between the United Kingdom and the Republic of Ireland have been better, and I think that is all to the good for people in Northern Ireland.

I think Her Majesty’s extraordinary visit to the Republic and the President’ s very successful visit back to the United Kingdom really set the scene on what ought to be the relationship in these islands between close neighbours, close friends with so many ties of blood and friendship and all the rest of it.

And I’m really proud that I have such a good working relationship with the Taoiseach, Enda Kenny, and we work extremely closely together. One of my favourite moments in the last year was visiting the First World War battlefields with him and seeing that in that appalling carnage how many people from right across Ireland had signed up [and] fought so bravely and valiantly on the Western Front. And I thought it was very moving for the first time for the British Prime Minister and the Taoiseach of the Republic to stand together and commemorate that.

I hope you enjoy our conference. Obviously, it good off with a slightly … I know what it’s like because I took over from a ‘traitor’ and someone you’re familiar with in Northern Ireland: Shaun Woodward

All I can tell you is when this happens, the people in the constituency, particularly the Conservative Party workers, feel a real sense of anger because they feel: “I pounded those streets, I stuffed those envelopes, I banged on those doors, so you could sit your well-upholstered bottom on those green benches in the House of Commons and I’m furious that you’ve let me down.”

So I know that it is a long way from County Down or County Fermanagh or Belfast or wherever to Rochester and Stroud but I think we should all make this pledge at the Conservative conference this year: “That seat is coming back at the by-election.”

And with that, please have an enjoyable conference. I hope you’ll see at this conference that not only have we a record of turning our country round and securing our United Kingdom but we’ve also got a plan that turns our long-term economic plan for the country into a plan for every family to give them the security of a job, of a better income, of the chance to buy their own home [and], as you heard today from the Chancellor, the chance to pass on your pension to your children. Dealing with the nitty-gritty of life because people want to know in our country that there’s light at the end of the tunnel and the plan will deliver for themselves and their families as well as for our country.

That’s what the conference is about. I think it’s going to be a great success and in 200 days’ time, I hope that I will no longer be leading a coalition government. I’ve had enough of coalition. Frankly, I’ve had enough of Liberal Democrats but that’s another issue. But I hope I’ll be the Prime Minister of a Conservative-only government with your help.

Thank you very much indeed.