The debate on the future of corporation tax tests the area where NI journalism and comment is at its weakest – business and economics. It also tests of the robustness of editorial independence when commercial judgment is decisively on one side. Naturally business is rampantly in favour – how can turkeys do otherwise than vote for the permanent abolition of Christmas? Companies are clustering round the Grow NI campaign launched by the NI Chamber OF Commerce and backed by the Secretary of State. When you’ve got a campaign you gotta have a brand and a logo. Fair enough, though I still find it peculiar to see a cabinet minister in the position of lobbying his own government.
It’s all too easy for the media to surf the wave and abandon their own navigation. It’s fair enough too for the company owning the Belfast Telegraph to make the natural commercial judgement that lower corporation tax would benefit them. But I hope this will not overbalance the paper’s editorial judgment. The paper catches the flavour of the Grow NI campaign with enthusiasm. Its authoritative columnist John Simpson traces the buildup of the campaign and only notes delphically.
Debate on the economy for political and business leaders is entering a demanding phase.
You could say that again John and maybe you should say more.
Apart from straight news reporting has anybody noticed much debate or analysis from the BBC at an important stage of the debate? I hope they’ll fire up coverage to match the climax of the Grow NI campaign for the end of the Treasury consultation period on June 24. The government are unlikely to respond to the consultation before September, so they can return to it after the marching season.
A dissenting voice comes from a pro- union tax expert Richard Murphy writing in the Guardian who claims that 12.5% corporation tax in the Republic has been a disaster, adding:
For Northern Ireland the problem will be that of all tax havens: fly-by-night companies that have no intention of creating real jobs, and whose sole aim is to park profits in the province before moving them on to another tax haven as quickly as possible will be those attracted by this policy.
In addition we’ll see plenty of notional head offices set up, as abound in Dublin docks, many of them with no employees at all.
On top of that there will be plenty of artificial transactions relocated to the province, such as the repackaging of goods with minimal labour content added undertaken, all for the sake of shifting profit into Northern Ireland.
Just to show how even handed I am, this goes too far. The best way to avoid abuse is to grant corporation tax relief on the basis of the size of the company‘s local payroll.
Murphy’s may be a jaundiced minority view but at least it shows there are other arguments that should be aired. The Republic may yet have to face a modest increase in company tax in exchange for improved bailout terms.