Corporation Tax dominated the headlines in 2014, writing for Slugger the PUP Cllr for Oldpark, Julie Ann Corr-Johnston argues for a rethink of the entire debate
Corporation tax will probably go over the heads of many in our community, but it has the potential of bringing 50-60,000 jobs into Northern Ireland over the coming years-Peter Robinson
If Peter Robinson was Prince John in the 1973 Disney cartoon version of Robin Hood, I wonder which of his DUP buddies would be Sir Hiss. Sir Hiss was the sneaky snake who Prince John sent to do his dirty work and to spy on good old Robin Hood. There is a memorable scene in the film when Sir Hiss – so keen is he to spy on Robin Hood and his band of outlaws – sticks his head in a balloon and floats off into the sky. I wonder if at the recent Stormont House talks Peter dispatched his own Sir Hiss in such a manner to spy on the other parties, or if things are so cosy and agreeable up there now that there really is no need to spy anymore. For if Robin Hood stealing from the rich to give to the poor was the problem, then Peter needn’t worry about what is going on up at Stormont. With the decision to hand the power for setting Corporation Tax (which in effect means lowering it) to the Northern Ireland Executive then quite the reverse is happening – the poor are being robbed to give generous tax cuts to the rich and well-off company owners.
For many of us growing up in a working class community, good citizenship has been about knowing your place; we have been encouraged to be followers rather than champions of our own community. Those at the top of the “social order” are considered /consider themselves to be our betters – better mannered – better bred – better off socially – better off financially and better educated. The practice of following has lead many of us to the margins of society – segregated from the prospering structure built on top of poverty. Whilst many of our self-serving politicians claim thousands on unnecessary expenses, wine and dine courtesy of the taxpayer, people in working class communities try to make ends meet. The upper reaches of society don’t need another champion when it comes to Corporation Tax – they’ve plenty sitting round the table. Those who do need a champion are the men, women and children in this country who are seemingly less deserving than the multinational corporations and the well-off.
The Public and Commercial Services Union published a report by tax expert Richard Murphy on the 22nd of September 2014, which reveals the overall amount of tax owed, evaded or avoided has barely reduced since 2008, despite Government pledges to be clamping down. The data incorporated in the report reveals that tax avoided had risen to £82 billion and warns that if unaddressed this figure could increase to £100 billion by 2019. The report claims that tax avoidance in 2013/14 alone is estimated at £119.4 billion. So on one hand, we are being told that large multi-national corporations are being taxed too much and then on the other it seems that they aren’t paying any tax at all. The reality, however, is that every big multinational will have a team of accountants and tax specialists working tax as close to zero as possible which is complemented by the loopholes in the legislation that allow businesses to transfer their profits abroad to have them taxed there. So if the big multinational companies that Stormont wants to attract are already working their UK tax bills towards zero then I can’t see how a cut in Northern Irelands Corporation Tax will make much of a difference. It seems to me something else is going on here – a cut in the rate of Corporation Tax is nothing more than a back door tax cut at the expense of the poor who rely on public services.
Our politicians up on the hill are falling over one another claiming there isn’t enough money in the pot to sustain or improve our local economy – subsequently they unanimously agree that devolving Corporation Tax to Northern Ireland and setting a reduced rate will unleash an unprecedented wave of investment (remembering Richard Murphy’s figures on tax evasion and avoidance) and growth that will help tackle the long-term problems in the Northern Ireland economy. This is despite our Minister for Enterprise, Trade and Investment previously boasting a 41% increase in direct foreign investment. In a more recent article, July 2014, the Minister was quoted saying “The fact that 75% of inward investors choose to reinvest and expand presence in Northern Ireland speaks volumes”. Bear in mind this will cost Northern Ireland somewhere in the region of £350-£700 Million, which is compensated from our allocated block grant, inevitably forcing further cuts to our departments of health and education. Company owners and the well-off may end up even better off, but I’m not sure who else will benefit from the cut in Corporation Tax – how many will invest the tax cut in nice holidays and better cars, as opposed to the creation of new jobs?
The BBC has also reported that “Unemployment: Northern Ireland Jobless Figure Continues to fall” it would appear as a result of the increased investment our Enterprise, Trade and Investment Minister boasts about. We can only assume that the figures don’t lie (had Sir Hiss anything to do with them?) and that Northern Ireland is already attractive to investment despite the poverty and social deprivation everywhere. The DUP Minister tells us she is doing such a good job that she wants a tax cut for the well-off while her party is hell-bent on implementing reforms that will in effect tax poor families for having an extra bedroom in their homes. Prince John would have been proud.
Glen Watson (Director General, Office For National Statistics) wrote in a letter in response to a Parliamentary question:
The ONS collects information on people participating in government-supported employment and training programmes via the Labour Force Survey. The information includes the name of the programme and the type of activity being undertaken. Those participants whose activity comprises any form of work, work experience, or work-related training are classified as in employment. This is regardless of whether the individual is paid or not.
This leads me to the Steps 2 Success programme in Northern Ireland, a scheme that is designed to assist those who have been on Jobseekers for a considerable time find sustainable employment. A mandatory programme for a maximum period of twelve months. What this means is if you are unemployed for whatever reason, be it redundancy or lack of basic employability qualifications you will be sent to work for ABC down the road. “We’re sorry that you won’t take home the wage similar to the customer check out assistants but we’ll continue to pay you your social security benefits in return for the invaluable skills and experience you will gain in doing so. At the end of the twelve month programme if ABC offers you a paid position we will subsidise the wages bill for them associated with your employment.” I will let you draw your own conclusions from the following:
Slave: 1.1A person who works very hard without proper remuneration or appreciation
I don’t know a single unemployed person that wouldn’t clap their hands at the idea of 50000 or 60000 new job openings in Northern Ireland. We can all only hope that the figure hasn’t been plucked out of thin air by Sir Hiss in his balloon, and that I am wrong to be suspicious about the motivations behind – and benefits of – a cut in Corporation Tax. However, I also know many unemployed people who will feel cheated and mislead when it is identified they do not possess the qualifications to fulfil the role, even if they do have the skills.
“The education system in the North of Ireland serves some children very well, but there is a significant level of under-achievement. As education plays a key role in determining life chances and opportunities in regard to economic and social mobility, those with fewer qualifications and skills are more likely to be disadvantaged when competing for employment opportunities.” (www.deni.gov.uk)
The Northern Ireland Education Minister said, “The number of pupils leaving school without five good GCSEs including English and math’s, has fallen in recent years (but) still too many finish their time at school without reaching this important benchmark.” While our education system continues to be based around a model that focuses on providing the best possible education for those who are from better off backgrounds, then it is no wonder so many children from disadvantaged backgrounds are leaving school without so much as a qualification. The children who want to learn, work hard and do well at school but can’t always because they don’t have the financial means or support to access a decent standard of education – they need a champion. The child that had a lifelong ambition of becoming a doctor ending up on a zero hour contract as a community care worker. The closest she got to fulfilling her dream was the stethoscope under the Christmas tree – she needs a champion. And here we are at the beginning – it is the failure in our education system that pushes so many to the margins in society providing the foundations for our betters to build a prosperous world for themselves. So many people living in our society – like the public servant made redundant and living on benefits – she needs a champion.
Devolving Corporation Tax powers will do little to restructure our economy when we have an education system that does nothing to promote innovation and creativity amongst our young. Vibrant and modern economies are ones that promote social mobility and we cannot have this without a good education system. If we want to improve the economy in Northern Ireland we must start at the beginning and restructure our education system. By this I mean from early years – through the expansion of schemes like Sure Start – through to a secondary system that treats all students equally and fairly, and invests resources based on redressing imbalances. When we have a fair education system, then perhaps we will be better placed to develop a broad-based economy that is attractive to investors because of our workforce and innovation, and where more jobs are created by local entrepreneurs from all walks of life. In relation to providing training for the unemployed, we must offer meaningful training opportunities, ones that are genuinely motivated by a desire to improve skills and enhance employability, rather than as a punishment borne out of resentment that someone undeserving is receiving benefits.
It is important to recognise that at the heart of this debate the responsibility and accountability lays solely at the door of our cabaret, otherwise known as Stormont. Which leads me to question the whereabouts of those within the establishment that claim to champion working class issues? Have Sinn Fein and SDLP abandoned their principles in a bid to remove power from the hands of the British government, one for the team, one for a United Ireland and are we just their collateral damage in a sectarian agenda? Out of touch with working class communities, campaign cheerleader and our very own Prince John, Peter Robinson says Corporation Tax may well go over the heads of many in our community (like Sir Hiss in his balloon) but this is not because they don’t understand it, but rather because it won’t make a blind bit of difference to them – except in making their lives worse because there is less money to pay for public services. Instead of borrowing £2 billion pounds from the Treasury, if we really want to make a difference to communities in Northern Ireland we’d be better served eradicating the loopholes that allow corporations to transfer profits outside of the UK to be taxed elsewhere and finding away to collect our share of the £82 billion owed to us.
What we need is Robin Hood but all we have is Prince John.