Erikka Askeland: Life of Brians is not going to be easy, with Irish tax woes taking centre stage

Lenihan and Taoiseach Brian Cowen consider giving ground on corporation tax a last resort. But how long they last in their respective positions is another question entirely. The Irish government has a series of mid-term elections before they are due for the big one in May 2012 and an increasingly unhappy populace could see a general election triggered far before then.

The prospect of a rise in business taxes across the Irish sea would be good news for Scotland, but only in the sense that our neighbour would be weakened rather than Scotland made stronger. Ireland's freedom to lure foreign direct investment to an English speaking country through the low rate of corporation tax was one of those baubles Alex Salmond and the SNP coveted so much they could almost taste it.

It was this, as well as the billions frittered away in reckless lending in a property bubble, that were the main drivers of the "Celtic tiger" economy. But the circumstances under which this happened might as well be ancient history. Now is a different world. The world's largest economies have all agreed on stringent belt tightening, which throws a wet cloth over any heated desire for global expansion.

So it would be quite reasonable to be sceptical that any closing of the gap would prove a boon to Scotland, mainly because there is as much likelihood of a rush of overseas investment to anywhere in Europe now as there would be a variety of barnyard animals taking flight.

Which isn't to say that global flows of money have stopped altogether - there is still much to play for. India for example has seen foreign direct investment increase more than ninefold in the past year.

The EU insists that it isn't forcing Ireland to do anything and that tax rates are a sovereign matter.

But then these niceties are a little like the difference between someone being asked for their resignation rather than being fired. The fact is Ireland has a massive problem in getting its 32 per cent deficit to its target to 3 per cent of GDP by 2014. That's an unprecedented level of fiscal consolidation and one that very well may require tax increases as well as cuts - if not an EU loan.

Troubled times ahead for house builders - so no change there

HOUSEBUILDERS beware.As the coalition government has put a finger in the eye of the middle classes by taking child benefit from high earners, support for the housebuilding industry and by extension the housing market is also coming to an end.

Last week, the Homebuy Direct programme closed down. This was a Labour scheme which saw the government take a stake in buyers of new homes as part of a shared equity scheme.

The frightening thing was that the major listed house builders sold an estimated to 15 to 25 per cent of their houses via the scheme. As the housing market sputters and wheezes, removing any incentives now will be an unwelcome kick in the ribs.

The Bank of England has also set stern face to the possibility of extending the government's 185bn special liquidity scheme. This programme, which has kept the mortgage market at least liquid since 2008 is set to end in 2012.

There are signs that the oil of liquidity is returning to rusted markets for mortgage-backed securities and it may yet be that banks will be able to wean themselves off the government guarantee of the mortgage market by then.

But this is an optimist's view and quite frankly there just aren't that many of those around these days.

The coalition could do what the US Fed is doing and make reassuring noises that government support will be extended - quantitative easing or SLS. But they will have to tread a very careful line.

In days when most people believe bankers are being treated better than nurses or teachers it is a dangerous game to say mortgage lenders or housebuilders will get any special treatment.