On Tuesday, while Alistair Darling was offering big business participation in a new forum on the future for corporate taxation in the UK, Gordon Brown was urging Big Oil, in the shape of BP and Shell, to plough a slice of their burgeoning profits back into getting more of the black stuff out from under the North Sea.

Yesterday, while footloose multinationals were still trying to decide whether the chancellor's tax forum was an olive branch or a cul-de-sac, Sir David Varney was publishing his final proposals for making the Northern Ireland economy more competitive.

One of the first acts of the leadership of the restored Northern Ireland Assembly last year was to argue for sharp cuts in corporation tax rates in the province, to help its economy compete with the much more generous fiscal regime long in place in Dublin. The 12.5% Irish rate currently compares with a main corporation tax rate of 28% here in the UK.

The sight of Ian Paisley and Martin McGuinness jointly arguing for lower taxes on corporate profits was one of the more surprising routines of a double act dubbed the Chuckle Brothers.

However, Varney wasn't having that one. In a stage-one review of tax policy in Northern Ireland, published last December, he concluded "a clear and unambiguous case for a 12.5% rate of corporation tax cannot be made".

It would cost up-front around £300m a year in lost receipts, the review estimated.

And, by displacing both capital and profits from other parts of the UK, the net cost in reduced public spending could amount to £2.2bn over 10 years.

These assorted cameos demonstrate just how much is at stake here. In a rapidly globalising world, tax competitiveness, as far as some businesses are concerned, is an opportunity to go where government takes less of your profits.

In recent weeks two significant UK-based businesses, pharmaceuticals group Shire and United Business Media (UBM), have announced plans to relocate to low-tax Ireland. Sir Martin Sorrell's WPP, the world's biggest advertising agency, is considering a similar move. Some business lobbying groups and financial advisers are warning the initial exodus could turn into a flood.

Back in March, a Confederation of British Industry taskforce called for the main rate of UK corporation tax to be slashed to 18% over an eight-year period.

The small companies rate, which went up from 20% to 22% last month, should also be cut to 18% over a three-year period, the lobbying group urged. Governments all want businesses to grow on their patch. That brings more investment and more jobs. However, governments have also grown dependent on the corporate tax revenues that flow for all that activity. That helps pay for a significant slice of what they can then spend on public services.

In the UK, direct corporate taxes currently bring in around 10% of all tax receipts. Cut the rate at which these taxes are levied, so the Varney logic in Northern Ireland goes, and these revenues will tend to shrink. If that happens, what governments can do for their citizens must also suffer.

"Protecting the tax base" has become political shorthand for this dilemma. But how do you protect that tax base when the more mobile companies start picking and choosing where they will be taxed? And if every government does as the CBI wants and slashes corporate taxes, isn't there only going to be one winner? Investors rather than citizens.

Exploring this dilemma more deeply is part of the rationale for Darling's forum. But how low or high corporate tax rates should be set isn't the whole story. As more businesses have begun to operate across national boundaries, where they generate their profits and where these profits are most appropriately taxed has added a whole new layer of complexity to the issue.

While the chancellor can claim that, at 28%, the UK has the lowest main corporate tax rate in the G7, he and his government are under increasing pressure over the question of where the foreign profits of UK-based companies should be taxed.

The existing Controlled Foreign Companies (CFC) rules in the UK were actually introduced by the Tories in the 1980s to counter "tax avoidance through the accumulation of income in subsidiaries in low-tax areas ... and the artificial diversion of business profits from the UK to such companies."

But progressively, as multinational group structures have become more complex and legal test cases, like that of Cadbury Schweppes before the European Court of Justice, have encouraged further corporate challenge, it has become harder to specify what is "artificial" and what is not.

The present government's plans to reform the CFC rules, unveiled last year, received a mixed reception. The final package is due to go out to consultation this summer.

But the creation of Darling's new forum on top rather suggests the Treasury is none too confident that what it is about to propose will resolve its dilemma.