Corbynomics inspiration Richard Murphy on the dogma behind demands to lower NI Corporation Tax

Richard Murphy is the Quaker chartered accountant and blogger who is credited with inspiring Corbynomics. He spoke at Tax Haven Ulster: Faith, Justice & Corporation Tax in Northern Ireland, a Christians on the Left event held on Friday night in Belfast that examined the counter arguments to dropping our local rate of Corporation Tax. You can listen back to the full event using the playlist at the bottom of this post.

With Irish roots, Richard Murphy first heard arguments being raised about dropping Corporation Tax in Northern Ireland over ten years ago. He recognised “dogma” but couldn’t see substance that would deliver benefit for the people of Northern Ireland. And the tax injustice made him angry.

He described the effect of slashing or rate of corporation tax as an enormous and immediate cut – hundreds of millions – to Northern Ireland’s block grant and a resulting cut in services.

He spoke of our local predominance of small and family businesses which are less able to leverage a lower Corporate Tax rate. Wealth and income disparities would increase. He could see no “transmission mechanism” to allow the cuts and benefits to filter through to the people who are supposed to get new jobs. Trickle down economics tends to make the rich richer.

Richard reasoned that a 30% growth in the private sector is required to ultimately compensate for a cut in Corporate Tax to bring about parity with Ireland. While the block grant would shrink immediately, there would be a significant delay before the business community would begin to reap benefits of the lower corporation tax rate and start to grow or attract new business. No where in the world has dropped Corporation Tax and achieved 30% growth.

Noting an obvious deficit of investment in Northern Ireland – both a deficit in terms of investment in physical infrastructure as well as skills and training – he called for the establishment of a National Investment Bank for Northern Ireland.

Despite the social justice theme that runs through the Gospels, never mind the rest of the Bible, it’s very rare for faith groups to discuss economics. Richard Murphy saw no point to his return to faith if it wasn’t going to be transformative. While the Green Party NI often feels fervently atheistic, council Westminster candidate Tanya Jones delivered an impressive speech that wove together her faith with her economic outlook.

SDLP MLA Claire Hanna outlined her personal position (against the lowering of Corporation Tax) and confirmed that her party’s position was to seek the devolution of the ability to vary the rate of Corporation Tax but only to change the rate “when the time was right”.

Brendan Mac Partlin SJ and Christian Aid’s David Thomas also provided alternative perspectives. The event was chaired by Jonny Hanson and was followed by a Q&A.

While not currently a member of the Labour Party, Richard Murphy is heading back to London tomorrow and will be there at Jeremy Corbyn’s coronation is likely to have a membership form thrust into his hand and become a key economic advisor to the next Labour leader.