Liz Truss’ plan to give a post-Brexit tax break to Northern Ireland to entice hundreds of companies to return has been blocked by chancellor Rishi Sunak.
The foreign secretary wrote to Boris Johnson last month to call for a series of measures to boost trade between Northern Ireland and Great Britain, including tax breaks and a new fast lane for goods crossing the Irish Sea.
This included a new “unilateral green lane”, which would allow businesses to send goods from Great Britain to Northern Ireland with less paperwork.
However, The Sunday Telegraph reports that the Treasury did not approve of the proposal and that it has been scrapped by the government.
A Whitehall source told The Telegraph: “Tax cuts are difficult legally and Northern Ireland had a lot of money from the new deal last year. Throwing money at Northern Ireland wouldn’t necessarily resolve the issue.”
Negotiations between the UK and EU on altering the implementation of the protocol have dragged on since last summer, with both sides agreeing that there needs to be less checks on goods crossing from Great Britain to Northern Ireland.
Johnson’s government has continually threatened Brussels that it is willing to trigger Article 16 and suspend the protocol if it does not agree to re-write the protocol and end almost all checks on goods crossing the Irish Sea.