An immodest proposal

One advantage of owning a newspaper is that if you have a radical proposal you want to float into the mainstream, at least one outlet will pick it up. Sir Anthony O’Reilly has an idea for NI’s economy which may be worth a second glance at least.

  • Ireland Today

    I welcome Mr. O’Reilly’s (to me he is still Mr. so long as he carries an Irish passport). Imitation is the sincerest form of flattery. I suspect O’Reilly’s motives are more unionist than nationalist, but the result will be anti-unionist whatever Mr. O’Reilly’s intentions might be.

    The main reason I would support O’Reilly’s suggestion is that it would tend to protect the 12.5% corporate tax rate in the Republic from British attack. I agree it has been the number one factor in creating the Celtic Tiger.

    As somebody who has also lived abroad for the last 30 years I agree with O’Reilly that the Irish Republic “compares very favorably with the political systems of other countries”, and I agree that “sharing the prosperity of the South in the manner that I have outlined will be an enormously important example of what can be achieved within Europe and the world by a peaceful Ireland.”

    So for once I find myself in total agreement with Mr. O’Reilly (except for that awful title bit).

  • Alan

    Hmmmm . . . speech at the Royal College of Surgeons . . . cutting company taxation – cutting public spending?

    And 10 years into derogation we would see the flight to cheaper regions. Better surely to recognise the benefits of our English speaking, skilled workforce and EU membership which will be at the core of future sustainable development, rather than seek temporary tax measures that bring their own disbenefits.

  • NewYorker

    I agree with O’Reilly’s proposal on lower tax for NI. He does not mention, but it is an important factor in inward investment, the political situation in NI. Inward investors shy away from political instability. Corporate planners worldwide will be familiar with the Northern Bank heist and the involvement of a major NI political party. At least so far, that is not a problem for the ROI. Given current circumstances, where would you open a new facility, NI or the ROI?

  • Gonzo

    Despite the stereotype of Irish Americans as plastic paddies – often true, but not always – they never seem as concerned about the type of government we get here so much as ‘is it stable?’

    While it’s a shame that many investors only want stability to get what they can for themselves, it’s a point worth remembering. No stability = no investment.

  • IJP

    Two points:
    – a different corporation tax rate is NOT going to happen (for so long as NI remains within the UK), otherwise you’ll have have demands for it in other UK regions, and HM Treasury couldn’t have that; and
    – as noted above, the biggest single problem for attracting investment is political instability.

  • Jimmy Sands

    IJP

    There is no reason why that should be an obstacle. There are UK territories around the globe with no corporation tax at all. British sovereignty and the British economy do not necessarily coincide.

  • Alan McDonald

    As an American, I agree that stability is more important than type of government. In fact, when I hear our (US) Republicans talk about wanting to spread democracy, I know that they mean they want stable capitalist governments. If the people get to vote, that would be nice, too; but if they vote communist, we reserve the right to overthrow/undermine their anti-capitalist choice.

  • Comrade Stalin

    Jimmy, if you can persuade the Treasury that as well as demanding a £4bn annual subvention that we also need a cut in the rate of corporation tax, you’re a better man than most of us.

  • Comrade Stalin

    Alan, I honestly hope you’re not justifying overthrowing democracy when you don’t like the way the vote goes.

  • Jimmy Sands

    Tovarich, the proposal is being but up as a way of generating the wealth that would, in theory lead to that subvention being reduced, if not eliminated.

  • Alan McDonald

    Comrade,

    My comment was in the way of an observation, not a justification. My own preference is that we left other people to choose their own governments and their own economic policies, but the powers that be in Washington are not as laissez faire as I.

  • Comrade Stalin

    Tovarich ? You shouldn’t have spoken like that.

    Cutting taxes generates wealth. I accept the principle, what I don’t accept is the likelihood that the treasury will apply wealth generating measures to one region of the UK and not another. Politically it’s impossible. How can you tell the people who used to work in the Rover plant that they’re not getting their wealth-generating tax cuts because they don’t blow up enough supermarkets or kill enough civilians ?

  • Jimmy Sands

    Your argument assumes that they see NI as a region of the UK like any other. You could have made the same argument against the introduction of PRSTV. The British public are quite used to NI being a special case.

  • Comrade Stalin

    You would have a point if our Westminster MPs got elected with PR. But they don’t.

    I’d expect a corporation tax reduction for NI to result in a lot of UK companies moving their HQs to Belfast. There’s no debate the desired effect would be achieved, but do you *really* think the British government/electorate are going to countenance that? Furthermore can we be sure the EU would have nothing to say about regional tax rate reductions ?

  • Jimmy_Sands

    Well the voting system was changed for the other elections and no-one batted an eyelid. The flight of HQs to Belfast en masse seems unikely. Other incentives certainly never produced that effect. The EU complains about low corp tax in general. I can’t see that a regional variation would bother them particularly.

  • beano @ Everything Ulster

    Sure to the EU we’re all just regions of a super European state so what does it matter which state a region is in?

  • George

    Alan,
    “And 10 years into derogation we would see the flight to cheaper regions. Better surely to recognise the benefits of our English speaking, skilled workforce and EU membership which will be at the core of future sustainable development, rather than seek temporary tax measures that bring their own disbenefits.”

    Not true, NI needs to start generating wealth so why not try and get billions invested in wealth generation by private companies. If the place is productive enough and the workforce knowledge-based enough then the investment will keep flowing.

    In 1994 foreign direct investment (FDI) into the Irish Republic was one tenth of that for the 10 EU assession countries. In 2004, FDI into the Irish Republic was the same as FDI for all ten put together. This despite Estonia having zero corporation tax.

    Beano,
    It matters which region because there isn’t a common tax rate across Europe

  • beano @ Everything Ulster

    That’s what I mean George, sorry. If there isn’t a common tax rate across Europe, what does it matter to them what the rate in NI is?