The follow-up to Sir David Varney's review of Tax Policy in Northern Ireland was published on Wednesday 30 April, but in common with its predecessor report, there were no innovations proposed in the field of taxation.

ICAI had made detailed submissions to this second Varney Review, and in relation to tax had proposed enhancements to the R&D Credit Regime in Northern Ireland. This is because our position is, and remains, that if Northern Ireland is to get out of the economic doldrums, it needs to reduce its dependency on Public Sector spending in favour of Private Sector growth. From our experience in Ireland, Foreign Direct Investment was key to this, and a favourable tax regime is key to FDI. Our submissions to the first Varney review had resulted in parliamentary hearings for ICAI both at Westminster and at Stormont led by our President, Vincent Sheridan, and the referral of our evidence by the Westminster Committee on Northern Ireland Affairs to the Chancellor of the Exchequer, Mr Alastair Darling.

Unfortunately, innovation in any aspect of the tax regime for Northern Ireland does not appear to be on the Varney agenda. Apropos of R&D credits he observed:

Enhancing R&D tax credits for Northern Ireland, or indeed other forms of targeted enhancement, would undermine the basic market-driven premise and underlying principles of the R&D tax credit scheme. As a result, such a change would risk distorting the efficient allocation of R&D in the UK as well as damaging the policy's success as a simple, predictable and transparent measure.