Free State left UK at just the right moment

Garrett FitzGerald argues that some revisionists have taken the re-drafting of history too far. In particular, he argues that the southern state got out of the UK before it was economically too late (subs needed) to kick out for economic independence, “at a moment when the cost of the break was still bearable, involving as it did only a small reduction in public service salaries and in the very limited social welfare provisions of that period”.

It is true that the IRA and Sinn Féin have sought to use 1916 as an excuse or cover for their violence against the unionist community in Northern Ireland, and far too many people have allowed them to get away with that tactic. But the truth is that neither the often sectarian motivation of the IRA in Northern Ireland nor the ruthlessness of their campaign against its unionist community find any parallel whatever in the 1916 Rising. It is not difficult to imagine the horror with which the 1916 leaders would have greeted today’s attempts by the IRA to justify their past actions by reference to what happened in Dublin 90 years ago.

Another case often made against the Rising is that it was unnecessary. We are told that Home Rule would have been conceded after the first World War. That may well be true, but it does not follow that Home Rule would then have led peacefully onwards to Irish independence. That is frankly most unlikely. Indeed, I would describe this thesis as alternative history gone mad.

Firstly, there is little reason to believe that Britain would have permitted Ireland to secure independence peacefully at least until many decades after the second World War. Secondly, long before that point could have been reached, the growth of the welfare state within a United Kingdom of which Ireland remained a part would have involved a scale of financial transfers from Britain to Ireland that would have made the whole of our island even more financially dependent upon Britain than Northern Ireland is today.

By the time that Britain might finally have been prepared peacefully to concede independence to our part of Ireland, the financial cost of such a separation would have been so great for our people – probably entailing a drop of 25 per cent or more in living standards – that it is highly unlikely that the Irish people would have been prepared to accept such a sudden and huge drop in their standard of living.

The truth is that we got out from under British rule just in time – at a moment when the cost of the break was still bearable, involving as it did only a small reduction in public service salaries and in the very limited social welfare provisions of that period. And, of course, without the independence thus secured in the aftermath of the Rising we could never have become a prosperous and respected state and member of the EU. For it is only because we became politically independent that we have enjoyed the power – which Northern Ireland lacks today – to adopt policies enabling us, somewhat belatedly, to catch up with the rest of Europe, including Britain, in terms of national output and living standards, and to join that Union in our own right, rather than as a subordinate region of the eurosceptic UK.

Without the impetus to early Irish independence provided by the Rising, it seems to me impossible to make a credible case for the emergence of a successful Irish State by the end of the 20th century. Indeed, I have never heard anyone even attempt to make a case for a successful Irish economy being achieved on the basis of a move to Home Rule rather than independence in the early 1920s.

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  • The truth is that we got out from under British rule just in time…

    Though that only means that the rising led – accidentally – to some good consequences. To say that it was justified, we’d need to say that the leaders of the rising had predicted Irish depedence on a British welfare state and that the rising was a proportionate response to the problems it posed.

    Besides, if the Irish had stayed in, and if the costs of leaving became to high, wouldn’t that simply mean that the Irish would have preferred to stay in the UK?

  • CS Parnell

    I have to say his argument sounds like tripe to me.

    There are lots of good reasons for an independent Ireland, but “we wouldn’t have the burden of a free health service” isn’t one of them.

    Of course the article also ignores the dismal failure of official republicanism – which had left the country a total basket case by the mid 1950s.

    Today Ireland is a success, but an awful lot of Irish men and women were thrown overboard to the empty theories of sinn feinism to get there.

    Was it worth it? I suppose no Irish man or woman is ever likely to say home rule was the better choice, but you cannot eat a flag.

  • “Besides, if the Irish had stayed in, and if the costs of leaving became to high, wouldn’t that simply mean that the Irish would have preferred to stay in the UK?”

    I don’t think so. It would have meant they wouldn’t have had the option.

    If I want to move house to the other side of Dublin but the cost of housing means it’s too high for me, then I am going to stay put but that’s not my heart’s desire is it?

  • Not really UI. It’s more like this: a person lives with his or her parents on very low rent and lives the high life. Moving out will make them much worse off. Are you saying they have no choice but to stay put?

  • DK

    What is he on about – the rest of the “empire” was given up in the 20th century without much fuss or major wars – would Ireland have been any different, expecially if it had, like Canada, Australia, & New Zealand, home rule from 1919?

  • Roger

    Given that quite a few people in England would happily get rid of Northern Ireland, Wales and Scotland to save on the subsidies it’s quite likely that a “home rule Ireland” with much larger subsidies would have been given complete independence whether it wanted it or not.
    In fact, if Ireland had become completely independent as a united country in 1922 it would have had a disastrous economic effect. For most of its history independent Ireland was entirely dependent on the money sent back from Britain by Irish people working there. A completely separate country whose citizens had no more right to enter Britain than any others would have been plunged into mass unemployment and probably starvation almost at once.

  • Robert Keogh

    DK,

    Google for Aden/Yemen and post-WWII African independence struggles like Kenya and Zimbabwe. The british had to kicked out of every single territory they invaded.

  • Irishman in St. Petersburg

    What Fitzgerald doesn’t consider if that if Ireland had stayed within the UK, the cost of subbing Ireland might have made a welfare state prohibitively expensive. And if the UK hadn’t been able to build what Ernest Gellner called a ‘social bribery fund’, the crises of the 1970s might have been even more severe.

    I think he’s right to suggest that a Home Rule Ireland would not have been an adequate solution to Ireland’s economic needs. What I’m seeing is a sort of giant Cornwall, beset by underdevelopment and joined in that condition by a Northern Ireland whose industries (in our timeline) went into decline from the 1950s onwards.

    The result might have been a violent conflict in all 32 counties, not just 6. On the other hand, maybe there would have been the emergence of a hegeomonic bloc of progressive social democrats, depending on how things turned out in the rest of the UK.

    Arguing counter-factually like this can be fascinating, but in the end it provides no answers to the questions we’re asking, because we can’t know what would have happened if certain events in our history had not occurred – we can speculate endlessly, but we can’t *know*.

    What I think we can safely rule out is a progression to Irish independence via Home Rule. I’m open to correction on this, but AFAIK, none of the proposed systems of Home Rule would have conferred even the limited statehood received under the treaty of 1921. It was that statehood which allowed Ireland to push for the Statute of Westminster in 1930, under which London lost its veto power over legislation in the Dominions (which remember only included the white bits of the empire). This is what provided the basis for the full de facto independence achieved with De Valera’s constitution in 1937 and the Declaration of the Republic in 1949.

  • aquifer

    Where is the evidence that Ireland could not have progressed from home rule to a nominal dominion status to full independence, just like Canada, OZ and NZ?

    The British attitude to the North ‘balance the books, the welfare is gratis, and we will leave you to run your own affairs’ indicates the opposite. Churchill even offered to hand the North to Devalera.

    The Irish separatist rejection of negotiated and progressive independence was divisive and reckless. Their dishonouring of negotiated agreements poisoned relations and entrenched sectarianism in the North.

    The Irish economic exiles in Britain and Northern Catholics paid the price for their armed adventurism.

  • Irishman in St. Petersburg

    1. Churchill *never* offered to hand NI back to Devalera. He sent an ambiguous telegram saying ‘now or never, rise now and be a nation once again’. Or do you know something I don’t know? If so, a wee reference would come in handy.

    2. How independent was Australia in the 1970s, if the Queen’s man, the unelected governer-general, could dismiss the elected government of Gough Whitlam? What role if any did Canada, New Zealand and Australia play in the negotiations for the statute of Westminster? Did they also campaign vigorously for an end to the Westminster veto? Would the Statute of Westminster even have been passed without the Free State? Would a Home Rule Ireland have had the same status as the Free State, allowing it to participate in the Statute of Westminster negotiations (not a rhetorical question btw)?

    3. When exactly did Irish separatists dishonour agreements? Britain did not exactly play by the rules in the years leading up to 1916. In case you’ve forgotten, the mild agenda of Redmond and Co. brought forth an armed response from the UVF which was allowed to arm itself by a British government which turned a blind eye also to the Curragh mutiny.

  • Brian Boru

    “What is he on about – the rest of the “empire” was given up in the 20th century without much fuss or major wars – would Ireland have been any different, expecially if it had, like Canada, Australia, & New Zealand, home rule from 1919?”

    Differences there being:

    A: Proximity.

    B: The latter were seen as “kith and kin dominions” as most of their people were of British ancestory and therefore as more deserving of self-government in a way the ‘barbarous’ Irish/Indian etc. were not. Remember the Amritsar Massacre?

  • Brian Boru

    “Besides, if the Irish had stayed in, and if the costs of leaving became to high, wouldn’t that simply mean that the Irish would have preferred to stay in the UK?”.

    In our hearts yes but our heads may have been misled – like 20-30% of Northern Catholics according to polls – that we might be worse off on account of “losing our subsidies”. Garrett is right.

  • “Not really UI. It’s more like this: a person lives with his or her parents on very low rent and lives the high life. Moving out will make them much worse off. Are you saying they have no choice but to stay put?”

    That’s a bit generous, Ciarán. It’s more like: a person living with his/her parents who have not been good role models and who have on one occasion been content to let the person starve. They don’t like the opinions of their child and seek to impose their views upon him/her.

    Wouldn’t you want to get out of such a household? Wouldn’t good parents do everything in their power to provide for the child’s wishes?

  • J McConnell

    Fascinating argument.

    Independence was good because instead of screwing the British tax payer for god knows how many billions in welfare payments, and the likely inability to ween itself off these payments, it allowed Ireland the freedom to (eventually) screw EU taxpayers for E55 billion of welfare payments.

    Plus it allowed Ireland the independence to become little more than a tax haven for high gross margin multi-nationals after all other economic policies had failed.

    So now instead of being dependent on London for keeping the trough filled Ireland is depended on Brussels keeping the trough full. And instead of being dependent on the general health of the UK economy for its economic well-being, Ireland is totally dependent on whether foreign tax authorities declare Ireland a tax haven used for tax evasion purposes, and on ultra low Euro interest rates to keeping the property bubble from collapsing.

    It just needs one unfavorable decision by a U.S IRS tax judge declaring Ireland a tax-haven and you can quickly say goodbye to 15% to 20% of Irish GDP. Euro interest rates of 6% or 7% and you can say goodbye to at least another 8% of GDP as the property bubble bursts.

    Does not sound like a very robust achievement to me.

  • mytuppence worth

    OZ, NZ and Canada were never in the UK. We can never know what might have happened with Asquith’s third bill had WW1 not intervened. Having shafted Asquith over his conduct of the war, Lloyd George then shafted Redmond by giving Carson a blank cheque on the six counties never having to be part of the “Home Rule” set up. He was the real villain of the piece.

  • Crow

    “Churchill *never* offered to hand NI back to Devalera”
    ,
    In the Summer of 1940 Churchill asked Malcolm MacDonald, the dominions secretary, to approach de Valera with the offer of a declaration in favor of reunification in exchange for British use of the treaty ports. At subsequent cabinet meetings, the offer was expanded to become effective once Ireland became a belligerent on the side of the Allies. This caused consternation in the NI government and inspite of Cragavon’s charges of treachery, the government added a clause to the proposal that said this solemn undertaking should take effect at an early from which there would be no turning back.

  • observer1111111

    Fascinating argument.

    “Independence was good because instead of screwing the British tax payer for god knows how many billions in welfare payments, and the likely inability to ween itself off these payments, it allowed Ireland the freedom to (eventually) screw EU taxpayers for E55 billion of welfare payments”

    A nice sophisticated bit of Paddy Bashing here.Instead of giving us some credit for organising our economy,its easier to falsely accuse us of leecching of Brussels which is bollox..

    The fact is significant economic growth occured in the 1960’s.It was scuppered by two things.The oil crisis of the time and the fact we were still tied into sterling.All the proves is the last financial tie we had with the UK hindered us.

    This tax haven arguement goes on and on when in fact Britain,France or any other EU country can do the exact same with the stroke of a pen.The fact that they don’t is not some act of benevolence.This is criticism is like some dosser complaining about his neighbour ‘cos he has a job and I don’t’when he does nothing but sit on his arse all day.

    The fact is we can stand on our feet as a nation and always could.Unlike the North we don’t need the UK subvention.Unlike the North we don’t need the EU subvention.Unlike the North we haven’t had £1 billion of EU funding directed to the North that was Earmarked for Liverpool in the 80’s.Of course by a Tory Govt that has done more to propogate the conflict in Ireland than any other element.from Carson/Bonor Law to Thatcher/Molyneaux.

    Who kept Britains trough full for cenuries.Ireland did.When Ireland starved the milk and honey of the counry was literally plundered and sent to the four corners of the world.The same thing happened in India,China and anywhere else the excuse for piracy called the British empire existed.

    New Jerusalaem is dead.Good riddance.

  • J McConnell

    crow

    According to the diaries of Lord Crawford the approach first came from DeValera rather than Churchill. MacDonald was the intermediary because he knew DeValera quite well.

    The discussions were soon abandoned because DeValera was living in the typical Republican fantasy land. The British were desperately seeking in those very dark days someway of helping secure their sea-lanes and their very survival and DeValera, a third rate parish pump politician obsessed by the trivia of a profoundly parochial nationalism, was only interested in arguing legal minutia.

    DeValera was just another Father Tiso.

  • observer1111111

    That is according to Lord Crawford.The fact of the obscene ‘Lord’ bit in front of his name should make his bona fides questionable.Like Churchill he was also part of that establishment which would make it more dubious.Churchills ‘A nation once again’ telegram to De Valera could only mean one thing to a nationalist or a unionsist for that matter. The fact that he did not take the bait only means he was wise his disingenuous nature.

    Churchill was king of the parish pump hence the his pandering speeces in praise of Ulster in contrast to the Republic in his victory speech.This was nothing new for toryism.Evidence of this is the Abu Hamza of his day,Edward Carson being able to set up a private army unmolested, willing to murder British soldiers and oppose constitutional politics.However the nature of the communication with the Irish Government meant he was either lying or was willing to sell out the Unionists once he got what he wanted.Probably any of the two depending on which day of the week.

    Father Tiso-Sounds more like Paisely.However the puppetmaster has cut the strings.

  • Irishman in St. Petersburg

    I don’t think the comparison with Tiso stands up at all. If Dev was another clerical fascist, why did he resist the strong pressure from the catholic right in the south to recognise Franco’s government during the Spanish Civil War? Why was Dev (if memory serves) the only European leader to condemn Mussonlini’s invasion of Ethiopia? (and in case you’re wondering, I’m *not* an FFer)

    The stuff posted by Crow is fascinating though, and I’d like to know more. So please, a reference or two – where has this been written up?

    observer11111 – exploitation there may have been (again that’s something I’d like to know more about) but there was an autonomous element to England’s industrialisation, in that it was the English peasants and workers who were exploited to fund development! As for the tax haven thing, the point is that multinationals have for decades engaged in creative accounting by which they shift their profits from one subsidiary to subsidiaries in other, lower tax countries. And the effect that has on the statistics of those countries is to overestimate the extent of economic activity growth and development.

    This is not to deny that there’s been real change for the better in the south. But it’s still an inferior performance compared to the Scandinavian countries which were largely as poor as Ireland 100 years ago. The fact that Ireland failed to follow the Scandinavian example doesn’t invalidate the pursuit of national independence, it simply means that the fruits of independence and statehood were not used adequately for the good of the people as a whole.

  • observer1111111

    Irishman,

    I agree that the FDI arguement is not clear cut.However I don’t think the comparison with Scandinavia is always a correct one.It is increasingly put forward as the model we should/could have gone for.For a start Sweden itself was a part of the empire club for centuries and punched far above their weight.It would have accumulated a lot of wealth during this period.When a more socialist system did come into being this wealth was there to draw from as well as their indigineous industry i.e Bofors/SAAB.Norway is oil rich.I am not sure about Finland but the fact that they were able to defeat the Soviets in a War prior to WW2 shows they were probably sufficiently industralised.In short there was a lot more old money in Scandinavia.

    These countries developed in a period wher globalisation did not have the same impact on Economics.There was an autonomous element to Business in the Empire.However it should remembered that Capital Investment in was restricted to Protestants for many years in Ireland.The skills for ingenuity were there.check the craft museum in Collins Barracks.Plus a large population who were disenfrancised from voting and at the time of independence disenfrancised from the land in living memory.This is the base Ireland was coming from.

    This is another arguement though.To try and say Irelands neutrality was collaboration is an astronomical stretch of the imagination.The same rules would apply for Sweden and Switzeraland.It would be like saying Britain collaborated with the North Vietnamese in Vietnam.Ludicrous!It would be like saying the British people were pro apatheid because Thatcher was willing to accept greasy Krugerands from the apartheid regimeS

    Similarly trying to portray Irelands low corporate tax rate as unethical is another red herring especially when every other country has this power.Also it should be noted Britain is just as protective of its power over taxes.The Irish were never Equal as a part of the empire.This was as true in 1912 as it was in 1690.Arthur Griffith even put forward a model similar to the dual monarchy of Austria Hungary.The fact is Ireland was a distinct culture conquered by a stronger Enland.When constitutional politics did evolve firstly it was a Protestant only Club.Even when the Act of union was passed in this atmosphere it was influenced by Bribery and Coercion.After Emancipation it took another century almost to acheive the nationalist goal constitutionally.And when it was finally being realised along came Carson.,the UVF and the tory shit stirring machine.

  • CS Parnell

    What is missing from this argument is a cold and rational look at Home Rule. Maybe a 32 county Home Rule parliament might never have opted for independence – in the same way that it seems highly unlikely to me that we’ll ever see an independent Catalonia or a Scottish Republic. In the end the things that matter to people – health, education, industry, trasnport – are under their control so why lose the advantages of being part of a larger block?

    Now, maybe in Ireland it would have been different, certaintly Garrett is right in the sense that a welfare state would have bound the Irish more closely with the British.

    But would a multi-national state have been so bad? Being a bit of a part-time Marxist I find the “working man has no country” argument quite a persuasive one. That, incidentally, is not incompatible with wanting to see Irish unity today, as being part of the UK today is obviously not the same as being part of a 32 county Home Rule Ireland.

    A 32 county Home Rule Ireland might have meant that the political slum of the 1950s North and South might have been avoided. No mass emmigration and no Catholics as second class citizens – the “seige within the seige” in Heaney’s magnificent words.

    Irish sovreignty is now shared with the Brits through the EU. Does that make us all less Irish? No.

  • Irishman in St. Petersburg

    Wasn’t partition an integral part of the Home Rule proposals brought in just before 1914, in order to appease the rejectionist unionists?

    That being the case, why on earth would anyone think a 32 county Home Rule Ireland was ever going to happen?

  • observer1111111

    CS parnell

    I think in the case of catalonia the economic arguement would favour independence.AFAIK catalonia is one of the wealthier regions.In this case I think the demography does not favour the Catalans to a large enough degree.Madrid is certainly not in favour.A multinational state might not have been so bad but a lot of autonomy would have to be there for each state.Not a collection of subordinate states to England.I think what I am talking about is a smaller EU.

    Irishman

    You are right but initially home rule was supposed to be a 32 county affair.I would have to check the history books but when the home rule bill was passed it was for the island.The two parliaments option was chosen around 1918.

  • The Beach Tree

    Actually observer, the partition option was contained in an amendment to the “Government of Ireland Act 1914” forced through by Lord Carson et al. in July of 1914.

  • George

    JMcConnell,

    “Independence was good because instead of screwing the British tax payer for god knows how many billions in welfare payments, and the likely inability to ween itself off these payments, it allowed Ireland the freedom to (eventually) screw EU taxpayers for E55 billion of welfare payments.”

    Firstly, what of the at least 200 billion in fishing rights Ireland gave to the EU? Count them in and Ireland is the EU’s second largest contributor after Germany. Can I call that fish welfare?

    Secondly, you don’t seem to know how EU money is spent. There is no such thing as a free lunch and just in case you didn’t know, the majority of money went to a handful of farmers not to the Irish people or economy as a whole. Read up on CAP. The agricultural deal was for France really, the Irish financial windfall was a side-effect.

    “Plus it allowed Ireland the independence to become little more than a tax haven for high gross margin multi-nationals after all other economic policies had failed.”

    Really? And how much comes from this tax haven you speak of pray tell?

    “So now instead of being dependent on London for keeping the trough filled Ireland is depended on Brussels keeping the trough full.”

    On what do you base this? Figures please rather than wild, unsubstantiated claims. How much of the 150 billion GDP Ireland will create in 2006 is down to Brussels? Back up your argument or else it is but prejudice at best, lies at worst.

    “And instead of being dependent on the general health of the UK economy for its economic well-being, Ireland is totally dependent on whether foreign tax authorities declare Ireland a tax haven used for tax evasion purposes, and on ultra low Euro interest rates to keeping the property bubble from collapsing.”

    How do you figure this out? Give me some evidence of this claim. Just because you say something, doesn’t make it true.

    “It just needs one unfavorable decision by a U.S IRS tax judge declaring Ireland a tax-haven and you can quickly say goodbye to 15% to 20% of Irish GDP. Euro interest rates of 6% or 7% and you can say goodbye to at least another 8% of GDP as the property bubble bursts.”

    On what grounds could a U.S. judge declare Ireland a tax haven under U.S. law? Where do you get this 20%of Irish GDP figure?

    “Does not sound like a very robust achievement to me.”

    Doesn’t sound like a robust argument to me.

  • Brian Boru

    “Wasn’t partition an integral part of the Home Rule proposals brought in just before 1914, in order to appease the rejectionist unionists?

    That being the case, why on earth would anyone think a 32 county Home Rule Ireland was ever going to happen?”

    I think the Home Rule party (or at least Redmond) was prepared to tolerate a temporary exclusion of the North from Home Rule. Maybe they understood it in those terms.

    “The discussions were soon abandoned because DeValera was living in the typical Republican fantasy land. The British were desperately seeking in those very dark days someway of helping secure their sea-lanes and their very survival and DeValera, a third rate parish pump politician obsessed by the trivia of a profoundly parochial nationalism, was only interested in arguing legal minutia.

    DeValera was just another Father Tiso.”

    As I understand it, the ‘offer’ was too vague to be accepted. The British were proposing a North-South committee to negotiate reunification after the war. Dev’s govt wanted to know what happened if the Unionists on the committee refused to co-operate. The answers from the British were not clear enough to be worth entering the war for. No doubt Dev remembered how Collins had been deceived into thinking that the Boundary Commission would hand Catholic parts of the North to the Free State and once bitten twice shy as they say.

  • observer1111111

    Beach tree,
    As I said I would have to check the history books but I believe what you say.It’s amazing what the threat of terorism can acheive.

  • J McConnell

    george

    > Firstly, what of the at least 200 billion in fishing rights Ireland gave to the EU?

    Ireland never gave 200B of anything. That is a purely notional value. The E55B is a real number. Total value of fish extracted from Irish territorial waters by non-national boats since 1973 seems to be more than an order of magnitude less that the number you quoted. Plus non-national extraction is not a displacement activity, Irish boats would never caught most of those fish if the non-national boats had not.

    > Secondly, you don’t seem to know how EU money is spent.

    E35B was CAP money, most of the rest was structural funds. Ireland still nets over E1B p.a, almost all CAP money. And what a complete waste of money. What has the E35B bought the country? A sector that produces a smaller net GDP contribution than the Intel plant in Leixlip.

    > Really? And how much comes from this tax haven you speak of pray tell?

    More than 50% of what the CSO call the ‘modern sectors’ are only here for tax reasons. They have no meaningful on-shore operations apart for shunting international revenue through Ireland. Microsoft and Oracle, and all the Belgian phrama companies are probably the best examples. The ‘modern sectors’ account for more than 35% of GDP, 60% of exports, and almost all the missing 10% GDP / GNP differential. Those, and the EU cash, account for the majority of the primary inputs in the Irish economy.

    > How do you figure this out? Give me some evidence of this claim.

    Read the most recent ERSI report of the economy, lots of fact there. Also there have been lots of articles in the Irish, UK and US press business sections in the last few years about the very dodgy position of Ireland tax haven status. There are currently a lot of big multi-nationals spending lots of money in DC lobbying to keep the status quo, and lots of complaints about the flagrant abuses by their Irish subsidiaries. You must have missed the story all over the papers a few months ago about Microsofts Irish shell company (separate from MS IRL) that had revenue of $9B last year and 20 employees?

    > On what grounds could a U.S. judge declare Ireland a tax haven under U.S. law?

    US tax law applies to all world income of all US companies and US citizens. Does not matter where you live or do business you have to file US tax returns ever year. Foreign income is normally covered by double taxation treaties. If you engage in activity anywhere in the world that reduces your US tax liability, and a tax judge declares that the reduction was tax evasion, if that activity was aided by the laws of a country then that country can be declared a tax haven. This means that any double taxation treaties are set aside. Ireland came very close to being declared a tax haven by an IRS tax judge last year, if it had, all US multi-national business activity in Ireland would have been taxed by the IRS at US rates and charged to the US parent company. If and when this happens you can say quickly kiss goodbye to at least 50% of the modern sector.

  • J McConnell

    observer1111111

    The 27’th Earl of Crawford, or David Lindsay as he was known when he was a Conservative/ Unionist M.P until 1913, wrote one of the best political diaries of the early 20’th century. He was a party whip during the constitutional crises of the Balfour years and had impeccable political sources right up to his death.

    As a staunch unionist he would have been scandalized and no doubt would have wrote about it in very trenchant terms if a Conservative prime-minister with a history like Churchills had approached DeValera on such a subject, and not vice versa.

  • observer1111111

    As a staunch unionist I’m sure being outraged and scandalised would have been his natural state.Let’s just look at the his credentials as you have posted them.

    Conservative/Unionist MP until 1913.This hardley makes him unbiased.The fact is the Conservative stance on Ireland was completely biased and smacked of Hypocrisy.Conservative involvement in the gun running at Larne comparitive treative of Irish Nationalists to embark on a simialr exercise at Howth.

    He held great company with the likes of Arthur ‘Bloody’ Balfour who actively promoted unionist unconstitutional militancy in the Early 20th Century.

    The approaches made to Devalera from Churchill are well documented in the UK and Ireland and are available to public scrutiny.The fact that you are quoting some obscure politician from the 19th/early 20th Century as a credible source with impeccable sources makes your arguement a bit thin honestly.I have spent twenty minutes googling Davy Crawford and have found nothing of his political career.I did discover that his lineage went back to the 14th century.A time when these noblemen were no more than Barbarians.

    His kind had an undemocratic obstacle over constitutional politics in Britain.Until this was broken Britain wasn’t a true democracy.They most forward thinking thing they did was to end this shambles that was little more than a caste system.

  • Brian Boru

    I think that our links with Irish-America may have helped save us from being declared a tax-haven before, and hopefully they will again.

  • J McConnell

    observer1111111

    Lord Crawford’s diary was first published by the Manchester University Press back in the ’80’s and although not as well know as those of Greville or Creevey, which cover earlier periods of parliamentary history, it is just as wonderful a primary source on the personalities and motivation of those in power at the time. The early part of Crawford’s diary compliments nicely Roy Jenkins book Balfour’s Poodles, which is the best traditional history of the constitutional crises triggered by collision of Asquith and the Diehards. Without this crises there would have been no election of 1910, and therefor no Home Rule Act of 1914.

  • observer1111111

    Well for such a “wonderful” authority it doesn’t seem to have withstood the relatively short test of time.Balfours poodle on the other hand,at least a reference can be found.Similarly Lord Crawford himself hasn’t.His memory seems be dwarfed by his sixteenth century ancestor..

    Without the crisis there would have been no hone rule act 1914?

    Without the house of Lords the act may have been passed in 1886.

  • George

    JMcConnell,
    the Dail was told last December that EU boats had extracted 2 billion worth of fish in one year alone. That’s a real figure to me and it’s real money to the countries that went on to sell that produce.

    “Ireland still nets over E1B p.a, almost all CAP money. And what a complete waste of money.”

    I assume you are agree that the majority of EU money to Ireland, which was CAP, was a side-effect of a deal with France and wasn’t responsible for the growth in the Irish economy.

    “More than 50% of what the CSO call the ‘modern sectors’ are only here for tax reasons.”

    When you say “tax reasons” I assume you mean competitive business environment. What is wrong with that. Ireland has a veto on its tax rates for eternity if it wants. There is no reevaluation clause with our EU partners.

    This competitive environment explains how Ireland received more FDI from the US in 2003 than China. For example, you mention Leixlip which cost billions in investment and employs thousands.

    “They have no meaningful on-shore operations apart for shunting international revenue through Ireland.” Please explain why they invested more here than in China if that is the case.

    You mention Microsoft: It has its European Operations Centre in Ireland where 1600 people work while hundreds others are contracted.
    Oracle employs a similar number. Amgen is spending close on a billion on its production facility in Carrigtowil. Might I point out to you that, per capita, Ireland is the largest exporter in the world. This isn’t something to be worried about this is something to build on. Do you want us to go back to exporting beef and butter alone?
    The multi-nationals do have meaningful operations but I agree they also use Ireland’s tax system.

    “There are currently a lot of big multi-nationals spending lots of money in DC lobbying to keep the status quo, and lots of complaints about the flagrant abuses by their Irish subsidiaries.”

    You say you are talking about the intellectual copyright issue with Microsoft reported in The Wall Street Journal last November.

    Microsoft has since applied to the Irish Companies Office to re-register its Round Island One and Flat Island Company subsidiaries as companies with unlimited liability – means no more public announcements. That means Ireland’s financial services sector should begin to grow even more in the future.

    The international financial services sector already accounts for 6pc of GNP and is expected to grow 50% in the next five years.

    I suppose the question is do we want Ireland to be like Switzerland or Luxembourg or like Laos. I’ll take Switzerland or Luxembourg thank you very much. We still have a long way to go to catch them. Multinationals take double the profit there. You seem to be saying there should be a law against small countries making money, I don’t.

    “If you engage in activity anywhere in the world that reduces your US tax liability, and a tax judge declares that the reduction was tax evasion.”

    Let me know when a US judge declares doing business in Ireland, Switzerland, Singapore, Luxembourg tax evasion.

    “Ireland came very close to being declared a tax haven by an IRS tax judge last year, if it had, all US multi-national business activity in Ireland would have been taxed by the IRS at US rates and charged to the US parent company.”

    This is where I feel you miss the point. As the New York Times points out in its editorial on the Wall Street Journal piece, if the US comes down hard on Microsoft, Ireland, with “its plausibility as a home for genuine investment because it is a place where foreign corporations have built and staffed offices and plants” will become home to more business.

    The crux here is that if you produce in Ireland, you pay Irish taxes, even if you are a US multinational. US liability reduces.

    I quote the NYT:
    “That means, in a particularly hard-to-swallow twist, that the tax havens encourage companies to send increasingly large chunks of their businesses offshore as well.”

    This is exactly what Google is doing. Instead of repatriating its money to the US ahead of any future “clampdown”, it is repatriating its workers here to legitimise its business in the eyes of the American taxpayer.

    If your mythical American judge pulls the plug, it is more likely to lead to a jump in investment rather than a contraction, in my view.

    That is why they are so hesitant. But that’s business. If you want state planning join the communist party.

  • J McConnell

    george

    Funnily enough, in todays Infoworld, a computer industry trade paper, is a story about Symantec being hit with a $1B fine for tax evasion with their Irish subsidiary.

    This is just the tip of the iceberg. Unless you are in the industry, and spend a lot of time in the Bay Area, and have been directly involved with the financing angle of startups for many years, you probably wont be too familiar with the game of cat and mouse played between the IRS and software companies over the years. It gets little coverage in the trade press let alone the mainstream press yet it has involved sums of many many hundreds of billions of dollars of potential tax liability of the last few decades.

    Microsoft is probably the poster child for this game. MS funnels more than 25% of its $40B revenue through various Microsoft companies in Ireland even though less than 2,000 of its 40,000 employees work for them, and absolutely no meaningful R&D development works happens in Ireland. None of the products and services that MS Ireland sells through to Europe are developed there. If MS Ireland used standard multi-national accounting practices used by other industries regarding transfer pricing of products sold its revenue would drop about 90%.

    Its the same story with the other companies in the software sector in Ireland, although apart from Oracle none are quite as aggressive in their tax evasion as Microsoft. The dirty little secret of the Irish software industry is that tax is the only reason they have any presence in the country.

    What this all means is open to interpretation. Just how aggressive will the IRS be? Will the French and Germans be as easily fooled next time as they were with the Padraig Flynn’s gambit? All I would say is compare the basic economic inputs of the Finnish and Danish economies with Ireland and guess which ones are most at risk from outside enforcement of tax and accounting laws. And notice that France, Germany, Italy and the U.S all have very large deficits and will become less amenable to tax evasion when, especially in the case of France and Germany, the crushing burden of baby-boomer welfare costs balloon in the next decade.

  • Carsoniste

    This completely contradicts his previous statement on the BBC website that the rising was neither supported by the people nor necessary due to the advent of home rule on the horizon

  • Brian Boru

    Carsoniste I have also read and listened on the BBC website and I think you are getting the wrong end of the stick. I believe he said (roughly) that without the Rising we might have got Home Rule but ended up not being able to leave the UK because of a likely dependence being build up on the UK taxpayer, which would make people more fearful of the economic consequences of leaving. When Garrett Fitzgerald says “that may well be true” I think he is talking about the claim that Home Rule would have come, rather than the Rising being unnecessary.