Northern Ireland looks set to receive responsibility for its corporation tax as UK ministers look at “really radical” measures to help make the private sector flourish and attract new investment.
and the reasons given?
“Recent reports suggest that Northern Ireland’s rate could be lowered in order to provide more effective competition with the Republic of Ireland. The UK currently levies a 28% rate of corporate tax, but it is highly unlikely, however, that, given the sustained criticism from eurozone governments of the Republic’s 12.5% rate, that Northern Ireland’s rate will be anywhere near so low.”
Northern Ireland, a nation state intimately bound to the United Kingdom but with its own devolved government too. Partly inside, partly outside, and soon, it seems with its own peculiar tax-raising powers: for those who have read Treasure Islands, this will look very familiar indeed. There is a two-fold intention here. The first is to reinforce the savage attacks on the corporation tax that is being undertaken by the current UK government. See here for the biggest part of that attack. The second is the desire by interests in the City of London to increase the reach of the British web of tax havens around the world, feeding business to the City. This will, if all goes as they plan it, create a new
Now let’s get one thing straight. This almost certainly won’t be about the headline tax rate at play here, as most people assume. This will most likely be about the exemptions and loopholes. This is what the corrupt and dangerous Wild West model adopted by the Republic of Ireland, one of the world’s most important tax havens, is all about. It’s been a major boost to the power of the City of London, which derives a lot of business from activity hosted in Dublin, and has helped corporations slash their tax rates the world over.
The Northern Ireland tax haven model has been floated for little while now – see here for more discussion of the topic, and the associated report, entitled Pot of Gold or Fool’s Gold? which notes among other things:
The case for cutting Corporation Tax [in Northern Ireland] was demolished by the Varney report of 2007, and yet the same individuals returned with largely the same pitch in early 2010, this time under the guise of a think-tank called the Economic Reform Group Northern Ireland.
Make no mistake here. The last UK government was appallingly slack about corporation taxes and the City, and got itself into a terrible mess as a result. The current government is demonstrating laxity on steroids (or perhaps I should say laxatives.)
The evidence just keeps mounting: the government is on the warpath on tax havens, and not in a good way. The aims seems to be to turn the UK into more of a tax haven, to turn to turn Northern Ireland into a tax haven, and — who knows? – to do the same thing to Wales one day. And there are those such as Martin Gilbert of Aberdeen Asset Management calling for Scotland to go this way too.
The downfall of the Western world continues. Who is going to raise their voice against this stuff?