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More than 100,000 people took to the streets around Ireland on Saturday (February 9) to demonstrate against the €64 billion bank debt which has been forced onto the country’s population. The protests, organised by the Irish Congress of Trade Unions, marked the end of a busy week in Irish politics, which saw the publication of a report into the barbaric Magdalene Laundries, the liquidation of the former Anglo-Irish Bank and the announcement of a supposed “deal” on the hated promissory notes. Basic democratic standards took a hit on each occasion.

Although the population have been subjected to a relentless campaign of government spin and misinformation, those who attended Saturday’s rallies were well aware that the “deal” presented to the population earlier in the week was merely an extension of the calamitous bank guarantee which Brian Cowen and Brian Lenihan condemned this country to. As a result, Ireland will pay for almost half of the total cost of Europe’s banking crisis, with every citizen coughing up €9,000 – compared to a European average of €191. Over the next 40 years, because of our political class’s dread of seeing billionaire speculators suffer a loss, the country’s population will witness hospital closures and mass emigration in order to repay a loan which they never took out. This is the incessant “no bondholder left behind” approach so eagerly adopted by Fine Gael, Labour and Fianna Fáil. “We are not going to have the name ‘defaulter’ written across our foreheads,” boasted Taoiseach Enda Kenny. “We will pay our way, we have never looked for a debt write-down.” The only concern this government has with paying off an illegitimate debt, it seems, is the timing. It will now be paid off over four decades instead of one. So much for a “deal”. So much for our “partners” in the ECB.

The political class in Ireland have long been infatuated with the wealth of foreign capitalists. Since partition, our economy was built around the goal of attracting “foreign investment” rather than the development of native industries. Economic policy was constructed around the desires of the wealthy, more so than most other European nations, a situation which continues to the present day. It is the enduring continuation of “trickle-down theory”, the folly long promoted by Ronald Regan and Margaret Thatcher which contends that the more wealth those at the top accumulate, the more those at the bottom will benefit. The global stagnation of wages in the midst of rising CEO pay over the last three decades is proof of its failure.

Despite the gravity of last week’s events, as well as the wider drive for austerity in general, the ICTU leadership succeeded only in completely neutering the message of Saturday’s rallies. A comedian, a rapper and musicians dominated the stage outside Government Buildings in Dublin in what seemed to be a deliberate attempt to depoliticise the protest. The crowd was entertained rather than radicalised by an uninspired display devoid of any political content. Its success in entertaining those in attendance was affirmed by the droves of protesters who departed the rally early.

The overall message of the demonstrations was carefully crafted by a trade union leadership determined to pursue a social partnership model which has immensely weakened the movement. The ire of the top brass was directed solely at the EU/ECB/IMF Troika, and not the government which has chosen to implement their policies, betraying pre-election promises. Rather than demanding the outright repudiation of a debt that we have no moral obligation to pay back, the ICTU leadership is content to call for a “better deal”.

Bland, apolitical campaigns which fail even to inspire otherwise enthusiastic activists are unlikely to reverse the drop in trade union membership we have seen over the past number of decades. The opportunity to send out a radical message on Saturday was entirely squandered. This is a somewhat unsurprising consequence, given that this same leadership failed to take a position on the Fiscal Compact Treaty last year which enshrined austerity into EU law.

As we approach the centenary of the great class battle which occurred during the Dublin Lockout, the contrast between Larkin and Connolly and the present leadership couldn’t be greater. It’s time for change.

This article was published in The Morning Star

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Armed republicanism has once again raised its unwanted head in my home town of Lurgan, defying the will of the vast majority of the people in the area and the rest of Ireland. 54-year-old David Black was gunned down on November 1 while traveling to his work at Maghaberry Prison. Mr Black’s killers are believed to have driven alongside his car on the M1 before opening fire with an automatic weapon, hitting him several times. He died at the scene.

The latest murder comes 18 months after 25-year-old PSNI officer Ronan Kerr was blown up by an Oglaigh na hEireann car bomb in Omagh, a killing which was as pointless as it was callous. Murders such as these achieve little besides satisfying the bloodthirst of the perpetrators and increasing state repression. Given the devastation which the families of the victims experience as a result of these groups’ actions, the lack of public explanation is striking. They are devoid of a greater strategy for achieving their professed goals and appear to possess little or no political understanding. For them, Perfidious Albion is the source of Ireland’s ills. The use of ‘armed struggle’ is just as central to the existence of these groups as the achievement of full Irish independence. For them, the means is an end in itself.

The methods of these groups also reveal a deeper disturbing tendency. In recent years, particularly in Derry, dissident republicans have attempted to present themselves as the moral guardians of the nationalist community. Under the guise of Republican Action Against Drugs, they have embarked on a self-appointed crusade against the drug problems plaguing working class areas, doing so by mutilating teenagers and young men through the act of shooting them in the kneecaps. For all their “revolutionary” pretentions, these groups have adopted a distinctly reactionary and thoroughly unenlightened response to recreational drug use.

Predictably, David Black’s murder was widely condemned by politicians, trade unionists and other public figures. The likelihood of dissident republicans heeding this outrage, however, is low. Bland condemnation was hypocritically articulated by British Prime Minister David Cameron, whose army is currently involved in the rapacious occupation of Afghanistan. He is consistently silent, of course, about the terrorism perpetrated by his erstwhile allies in Washington. The use of unmanned drones in Pakistan to murder “suspected militants”, often a euphemism for defenceless children, goes without comment. This episode also highlights the double standards which exist in our media. David Black’s death was rightly described by the BBC as “murder”. However, on the rare occasion when civilian deaths at the hands of western forces are reported, the words used invoke a more humane and clinical version of slaughter, such as “air strikes” and “raids”. In the eyes of our media, British and American soldiers do not murder – they are merely involved in “military operations”. Terrorism is only wrong when it occurs on a small scale, it seems.

And so, for all of this, another family is torn to pieces and yet more alienated working class youth tied up in the activities of these groups will, in all probability, face lengthy prison sentences. All part of a futile campaign with no possibility of succeeding. The heavily armed Provisional IRA, with its considerable communal and international support, ultimately failed to achieve a British withdrawal from Ireland. A campaign of sporadic murders with no end game in sight carried out by a number of tiny groups with miniscule support is highly unlikely to achieve the same goal.

This article was published in The Morning Star

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There are many issues which lay bare the subservience of Ireland’s political elite to the edicts of international capital. The bank guarantee of September 2008; the handing over of natural resources to multinationals; the miniscule tax rate levied on corporations; a crippling austerity agenda which continues to stunt the country’s economy – the list goes on.

This week saw yet another bleak day in the state’s history when gombeenism ran roughshod over common decency. On Monday (October 1), €1 billion was handed over to unguaranteed, unsecured bondholders of Allied Irish Bank, which is 99% owned by the state, as part of a pitiful bid to appease “the markets”. The Fine Gael/Labour coalition has claimed ignorance over the identities of these and other similar recipients of Irish state funds, although the list is widely known to include financial institutions such as Goldman Sachs, Deutsche Bank and Barclay’s. By the end of this year, a total of more than €19 billion will be paid to speculators who gambled in the boom years and now refuse to take a loss. In 2013, more than €17 billion of state money will be squandered in the same way.

This enormous transfer of wealth takes place against the backdrop of the largest spending cuts in the state’s history. In the demented political sphere of Ireland, where the nation’s economy is seen as a mere tool to service the needs of multi-national corporations, closing A&Es, reducing the wages of teachers and slashing allowances for disabled people are seen as “tough” decisions. Increasing corporation tax and forcing the super-rich to take a loss on their gambles are, apparently, weak decisions. A 15% unemployment rate on top of mass emigration, it seems, is the tolerable price to pay in the appeasement of “the markets”. Sacrifices must be made to save the European financial system, we have been told.

For all their talk of “injustice” and “unfairness” earlier this year, the GAA stars who rallied behind disgraced former billionaire Séan Quinn have remained remarkably silent on this particular issue. The handing over of scarce public funds to nameless professional gamblers merits no public demonstration of anger from Joe Kernan, Mickey Harte or the others who chose to support a corrupt billionaire. Nor were they as outspoken when Ireland’s economic sovereignty was handed over to the IMF in 2010.

Diarmuid O’Flynn, a hurling reporter for the Irish Examiner, has filled the void left by these sports stars and, of course, many other journalists. RTÉ, the national broadcaster, failed to report on Monday’s €1 billion bond payment. O’Flynn is one of the organisers of a weekly demonstration in his home village of Ballyhea in County Cork against the bondholder bailout. Now into its 84th week, the Ballyhea protest is a small glimpse of indignation among a population which has been renowned globally for its tame acceptance of harsh cutbacks. O’Flynn’s blog, Bondwatch Ireland, is an excellent source of information for those seeking to find out the true scale of the toxic debt plunged onto the nation’s shoulders. A result of meticulous research, the site details on a weekly basis the upcoming bond payments due at Ireland’s state-owned banks. Irish journalists should be well advised to consult the site.

Many of the attempts to explain what caused Ireland’s economic collapse have been muddled, causing much confusion around the issue. Some commentators point to the “cute-hoorism” prevalent among the Irish ruling and political class, while others highlight the outright criminality which existed at the top of Ireland’s banking sector. All of these arguments carry weight, but ultimately fail to provide a thorough explanation.

Ireland’s problems transcend its own national boundaries. Although all of the above were certainly contributing factors, the country’s collapse was part of a global calamity. Since the 1970s, capitalism was transformed from its Keynesian model towards a more radical neo-liberal one. Trade union influence diminished, financial markets were deregulated and public assets were privatised. Ireland was long touted as the “success story” of this economic arrangement.

The rise of neo-liberalism saw an unprecedented concentration of the world’s wealth into increasingly fewer hands. The demise of trade union movements in much of the west resulted in falling and stagnating wages for most workers. In order to make up for the loss of income, people were forced to take on ruinous amounts of debt to secure some of life’s basics, most notably in Ireland’s case, a home. The bursting of this credit bubble was inevitable.

In 2011, the British TUC released a report revealing the extent to which the incomes of workers had stagnated. It was found that UK workers would be earning a combined total of £60 billion more had wages increased in proportion to the growth of the wider economy. The same is true in many other countries. In the United States, the Irish bourgeoisie’s ideological home, this inequality occurs to an unnerving degree. The poorest 50% of Americans own a mere 1% of their country’s wealth, while the richest 1% own more than 34%. Or, to put in another way; the richest 1% of Americans own 34 times more wealth than half of all the American population combined. One family, the Waltons, who own Wal Mart, now possesses more wealth than the bottom 40% of Americans. Such is the economic model our rulers aspire to.

During the boom years, with its unregulated financial markets and low tax rates for corporations, Ireland was held up as the poster boy of neo-liberal capitalism. The Celtic Tiger ran riot as the worst off in society were left behind. On 24 September, the Simon Community reported that homelessness has increased in Dublin, with more than 2,600 people seeking the housing charity’s assistance. This situation continues alongside the sordid spectacle of up to 400,000 empty homes scattered around the country – many of them owned by the state’s ‘bad bank’, NAMA.

Just as many of Ireland’s problems were rooted in a global system, so too do the seeds of a solution lie in other parts of the world. Although afflicted with a notoriously parochial political system, the population would do well to note the actions of people in other parts of Europe. Following its own crisis in 2008, Iceland refused to repay the debts accumulated by private banks, to the fury of the neo-liberal “experts” and “the markets”. Depositors’ money was guaranteed but private investors were forced to take a loss. These are real “tough” decisions. Iceland now has an unemployment rate which is less than half that of Ireland’s, and a growth rate of 3%. This political courage needs to be combined with the resistance of the kind shown by trade union movements in Greece, Spain and Portugal. Neutered as it is by a subservient ‘social partnership’ model, the Irish trade union movement, with honourable exceptions of course, has so far failed to inspire mass action. The leadership of the Irish Congress of Trade Unions even refused to take a position on the EU Austerity Treaty in May.

Ireland’s socialisation of private losses is a national scandal which remains so far under-reported. It’s astounding that many fail to make the connection between this and the array of cuts to public services taking place right now.

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On August 9, an article in the Belfast Telegraph warned readers that Northern Ireland faced an impending economic “meltdown”. Accountancy firm KPMG’s Eamonn Donaghy, described in the report as “a top financial expert”, argued that the region’s economy was not sustainable without reducing corporation tax to 12.5%, in line with the Republic of Ireland. Mr Donaghy is one of a long list of “experts” regularly carted out by the local media in support of the tax cut.

Unimaginatively held up as the saving grace of a battered economy, all four main parties in the Stormont Assembly have rallied behind the appeals of these “experts”, whose collective failure to foresee the worst economic crisis in 70 years should, by all rights, consign them into obscurity. The prevalent narrative of the issue is a pleasingly simple one – low taxes will attract business to the region, and this investment will create jobs.

Reporting of the issue has been extraordinarily one-sided. Representatives of banks, finance firms and other multinationals are given considerable space in the Irish News, the Newsletter and, of course, the Belfast Telegraph. In the article mentioned above, Mr Donaghy was treated as a well-informed, unbiased commentator. Nothing was said of the fact that his firm, KPMG, would stand to gain a great deal from the tax break.  “In every other country where corporation tax rates have been significantly cut,” Mr Donaghy said, “positive economic benefits and job creation has happened.” The names of these countries were not mentioned and no evidence was provided to back this up.

Pot of Gold or Fool’s Gold?, a thorough report carried out by Tax Research UK’s Richard Murphy, demolished the case for cutting corporation tax. Promises of job creation were shown to be a hopeful gamble with a large immediate cost. As a result of a previous EU court ruling, a minimum of £300 million will have to be cut from Stormont’s block grant from Westminster if the tax rate is reduced. On top of that, not a single new job can even be guaranteed. Murphy’s findings were given little attention by the local press.

Parties from both the unionist and nationalist sides, notorious for inter-communal bickering, have been remarkably united on this particular issue. The conventional wisdom states that north is “over-reliant” on a “bloated” public sector, which requires a “rebalancing” of the economy. However, the private sector-led recovery promised by David Cameron has not happened in Britain, and there is little reason to believe it will occur anywhere else anytime soon. It marks a curious juncture in Irish politics when nominally centre-left parties, Sinn Féin and the SDLP, adopt a distinctly Thatcherite economic platform.

The blueprint of Dublin’s notorious tax haven, the International Financial Services Centre, once dubbed “Lichtenstein on the Liffey”, looks set to be replicated north of the border. “For Northern Ireland,” Murphy wrote in the Guardian, “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.” He continued: “That policy has virtually bankrupted the Republic. Why on earth would anyone want to replicate it?”

Advocates of this corporate welfare have, on occasion, been surprisingly candid. When he addressed the Northern Ireland Affairs committee in 2011, CBI NI chair Terence Brannigan admitted: “There is no guarantee [of job creation] and it would be totally misleading of me to sit here and say that I could guarantee you. I couldn’t guarantee you anything.” Former unionist MP – and millionaire – John Taylor, now Lord Kilclooney, told the House of Lords that “95% of the population of Northern Ireland who are not company directors would be worse off”.

Recently described by Taoiseach Enda Kenny as the “cornerstone of the economy”, and deemed politically untouchable, the 12.5% corporate tax rate has long been a solid feature of southern Ireland. Claims that it “attracts jobs” are easily dismissed. Dell’s abandonment of its Limerick plant in 2009 and the current unemployment rate of 15% testify to this. The country’s reliance of foreign investment merely underlines the failure of our economy to develop in a sustainable way. Conor McCabe, in his 2011 book Sins of the Father, rightly points out: “Given such a modest effect on the Irish economy – 7% of total employment and approximately €2.8 billion in corporation tax – why is foreign direct investment constantly put forward as the prime objective of the State’s economic policies and strategies?”

Suggestions by proponents of the tax cut that the Celtic Tiger was fuelled by the 12.5% rate, too, are groundless. It was, at best, a secondary factor in causing the boom in the south of Ireland. The Irish state had an overall lower tax base with many loopholes which could be exploited by big business – something the North could never duplicate while it remains under the jurisdiction of the UK.  More important to foreign investors than a low corporation tax during the boom years was Ireland’s highly educated, English-speaking workforce, its proximity to mainland Europe and its lack of government regulation (along with widespread corruption carried out in the interests of capital).

The refusal of multinationals to pay their fair share should be challenged, not accommodated. A race to the bottom serves only the interests of the super-wealthy. Reducing what is already one of the lowest corporation tax rates in Europe is not going to stem the effects of the Great Recession, no matter what business “experts” contend. Tax cuts don’t develop economies or create employment – they create tax havens.

Neo-liberal solutions will not solve a neo-liberal problem.

– This article was published in The Morning Star

I’ve never really understood the world’s fascination with Irishness. During my time living abroad I have found telling people that I’m from Ireland automatically leads to a reaction of respectful awe. Many in the English speaking world seem to believe the notion that being Irish, a mere accident of birth, is somehow “cool”. Maybe it’s our attitude towards alcohol. Maybe it’s the music. Or maybe people just find the place curious. And a curious place it most certainly is.

Since 2008, the life of the Irish economy has been battered by austerity, imposed on the population by two successive governments on behalf of the world’s richest people. Much of the international commentary on the collapse of the ‘Celtic Tiger’ has focused on the seeming passivity of the Irish populace in the face of deep cuts in public spending, starkly contrasting with the heroic resistance of the Greek working class.

Last week, thousands of ordinary people rallied in support of former billionaire, now bankrupt, Seán Quinn in county Cavan. A number of well-know GAA faces attended the event, including Tyrone manager Mickey Harte, former Armagh manager Joe Kernan and former Meath manager Seán Boylan. Sinn Fein’s Michelle Gildernew described the treatment of Quinn as “disgraceful”, while, on the other side of the border, Mary-Lou McDonald was quick to distance the party from the disgraced businessman. The vile Michael O’Leary also voiced support for the convicted criminal.

Judging by the large crowd which had gathered in Ballyconnell, one would be forgiven for thinking that this was a man of upstanding character who had been gravely misunderstood. The facts, however, show an entirely different picture. The BBC’s Jim Fitzpatrick has detailed a considerable list of Quinn’s dubious actions, which is well worth looking at. Not only did he trade in “dangerous” derivatives to bet on the value of Anglo-Irish Bank, among other shady financial dealings, he borrowed money from Anglo-Irish Bank to buy shares in – you guessed it – Anglo-Irish Bank! Now, you don’t need to be a financial wizard to realise this is deeply corrupt.

Although he was already obscenely rich, Quinn had the sheer reckless greed to gamble billions in an attempt to make even more money, destroying his own empire in the process. His actions and the actions of his class of incompetent, selfish moneybags destroyed the Irish economy. Surely the people who attended this rally could muster up the wit to make the connection between the bitter austerity measures being imposed the most vulnerable people in Ireland and the activities of the likes of Mr Quinn?

The Ballyconnell rally reflects the rampant gombeenism and blind local loyalty that still infects Ireland. So long as one is seen to be a GAA fan, a mass goer or simply “one of our own”, serious misdemeanours, even crimes, are ignored. The significant minority in the country who have chosen to back Quinn should be reminded that, since Anglo-Irish has been nationalised (though it is now called IBRC), the debt he ran up is owed to the Irish taxpayer.

The spectacle of working people demonstrating in support of a billionaire whose class helped bankrupt a nation and force an entire generation to shoulder a colossal debt is not only puzzling but is, indeed, quite pathetic. “Bring back Quinn and let him create jobs”, read one ill-informed placard with the air of a grateful serf paying homage to his master. The working people who attended this rally would be better served demonstrating for the interests of their own class.

“Ireland is not Greece,” Finance Minister Michael Noonan once said. Indeed it’s not.

This article was published in The Morning Star

Ever since the bank guarantee of September 2008, there have been countless attempts to explain the implosion of the Irish economy. Most of these explanations have taken a moralistic attitude, laying the finger of blame at the greed and recklessness of those at the tops of the financial institutions which laid waste to a decade of prosperity. There may well be some merit in these views, but the roots of the current crisis run much deeper than a handful of people behaving badly.

This week I finished reading what was undoubtedly one of the best accounts of what happened to the Irish economy four years ago. Published last June, Conor McCabe’s Sins of the Father takes a thorough and serious look at the causes of the country’s economic collapse. Although I own a copy signed by the author himself, Sins of the Father had been sitting on my bookshelf for almost a year before I bothered digging into it. Upon finally reading it, I regretted putting it off for so long.

Sins of the Father is much more than a mere chronological description of how the Irish economy imploded; In the book, McCabe charts in an easily accessible manner the deeply flawed and deformed way in which the Irish economy developed since the partition of the country, taking the reader right up through the bank guarantee, the creation of NAMA and the humiliating EU-IMF bailout of November 2010. Although Fianna Fáil was politically butchered by voters in last February’s general election for their role in the crisis, this book shows how successive governments since the state’s foundation laid the foundation for Ireland’s catastrophic economic collapse.

The book, which is less than 300 pages long, is divided into five subject areas, all of equal importance; housing, agriculture, industry, finance and lastly, the Fianna Fáil/Green Party government’s response to the financial crisis.

The chapter on housing, I found, was a particularly fascinating one, which convincingly demolishes the myth of a ‘property-owning’ gene in Irish DNA. McCabe correctly points out that the high rates of private ownership was a direct result of the political decisions taken by successive governments which consistently prioritised private ownership over much-needed decent public housing schemes. The fundraising organisation Taca, set up by Fianna Fáil in the 1960s, brought into light the shameless cronyism that existed between the political class and property developers, speculators and landlords.

Also wonderfully detailed in Sins of the Father is how Irish governments helped to fuel the rampant property speculation and booming house prices which plagued the country for the last number of decades. High prices opened up a new debt market for banks, while Irish people were forced into taking on ruinous mortgages in order to secure a home. A booklet issued by the government in 1967 advising citizens on home ownership told readers that “the amount you borrow should not be more than the 2½ times your annual income”. By 1998, house prices were almost eight times higher than the average industrial wage. At the height of the boom, McCabe found, “Irish property prices were between eleven and fifteen times the median wage”.

Another aspect of the book which I found not only interesting but profoundly relevant is the author’s criticism of Irish governments’ obsession with foreign investment, to the detriment of the state’s own indigenous industry. He points out that the benefit of having multinational companies based in Ireland was much lower than is often portrayed, stating that the “profits are repatriated to their country of origin”. He continues: “Given such a modest effect on the Irish economy – 7% of total employment and approximately €2.8 billion in corporation tax – why is foreign direct investment constantly put forward as the prime objective of the State’s economic policies and strategies?”

Sins of the Father, McCabe’s first book (and hopefully not his last), admirably challenges many of the lazy myths which pass for economic discussion today and should be seen as a vital resource for those seeking to understand why the Great Recession has had such a profound effect on Ireland.

Conor blogs at www.dublinopinion.com/

“The evidence says that we will develop significant jobs. Guarantee? No. There is no guarantee and it would be totally misleading of me to sit here and say that I could guarantee you. I couldn’t guarantee you anything.”

These are the words of CBI NI chair Terence Brannigan when he spoke to the Northern Ireland Affairs Committee earlier this year on the long-running issue of the lowering of corporation tax.

Although neo-liberalism has proven to be an abject failure, those in power are convinced that more deregulation, lower taxes and attacks on wages is the only method of escaping from this latest crisis. Not least our esteemed politicians in Stormont. Despite the fact that the Stormont executive stands to lose at least £300 million in its block grant, the four main parties seem determined to turn the North into a tax haven.

This is all done on the grounds that it would “harmonise” the tax regime across the island of Ireland and attract “investment”. Vince Cable once described the Republic of Ireland as “Lichtenstein on the Liffey”.  It now appears the majority of Stormont’s politicians are content to emulate that system and see the North turned into “Lichtenstein on the Lagan”.

The absence of any real debate in the media on such an important issue like this one is striking. The main regional papers regularly provide business leaders with space in their publications to outline their case, while minimising the platform of those who oppose the move to lower corporation tax. For example, ‘Pot of Gold or Fool’s Gold?’, a brilliant report carried out by economist Richard Murphy demolishing the myth that corporation tax would boost the Northern economy, received very little media attention. The same goes for a recent report carried out by Cambridge University’s Wilberforce Society.  This was one of the reasons I made the effort to cobble together this article. I don’t claim to be in any way proficient in the field of economics, but, as a journalist, I feel I have a certain amount of responsibility to counter this conventional wisdom.

The claim that thousands of jobs will be created as a result of lowering corporation tax is, at best, a hopeful gamble, and, at worse, an outright lie. What you will actually get is transnational corporations basing their headquarters in Belfast to escape higher taxes in other jurisdictions. A handful of lawyers and accountants will be hired to fiddle the companies’ tax bills, with no other real jobs being created. And given that the bulk of businesses in the North are small and medium sized, which don’t pay corporation tax, its reduction would have no effect on most indigenous companies.

Of course, those who will take on the losses of this gamble will be the working class. In a previous case, concerning Portugal’s Azores Islands, the European Union ruled that any losses as a result of lowering tax in a certain region within a country must be incurred by that same region. In other words, if the predictions of the four main parties don’t materialize, the losses will have to be made up by further slashing public services. Even if the tax reduction did prove to be successful, the benefits would only be felt by the very rich. Former Unionist MP John Taylor (now Lord Kilclooney), hardy a leftie, told the House of Lords that “95% of the population of Northern Ireland who are not company directors would be worse off”.  On the back of the largest cuts in the public sector in decades, doesn’t this venture seem overly risky? Indeed, the ability of the main parties to fight for a reduction in corporation tax stands in stark contrast to their meek acceptance of Tory cuts.

Comparisons with the Republic of Ireland

The ‘success’ of the Celtic Tiger is usually cited by the proponents of this latest round of corporate welfare to justify their proposals.  However, any serious study on the Republic’s economic growth during the Tiger years recognises that the low level of corporation tax was, at best, a secondary factor in causing the boom.  The South had an overall lower tax base with many loopholes, which could be exploited by big business – something the North could never duplicate while it remains under the jurisdiction of the UK.  On top of that, judging by today’s climate, the Republic’s is hardly a model to base a viable economy on.

More important to foreign investors than a low corporation tax during the boom years was Ireland’s highly educated, English-speaking workforce, its proximity to mainland Europe and its lack of government regulation (along with widespread corruption carried out in the interests of capital). The fact that the Republic had a low corporation tax since the 1950s without any correlating growth in the economy is rarely acknowledged by the supporters of corporate handouts.

However, perhaps the most alarming aspect of all this is the fact that the main parties’ keenness to partake in this race to the bottom encourages the very worst traits of capitalism. The refusal of the rich to pay their fair share towards the societies in which they live is something which should be resolutely opposed, not facilitated. Indeed, we should be pushing them to put more money into the public coffers, considering we already have the sixth-lowest corporation tax rate in the European Union.

International effects

There are many reasons to oppose the lowering of corporation tax, not least the effect tax havens have on developing economies. Even from a strictly internationalist position, any moves to decrease taxes on the rich should be resisted for the simple reason that many of the poorest people on Earth will be worse off as a result. When large corporations declare their profits in tax havens, which the north of Ireland could soon be, the result is crippling for developing economies. Companies operating in parts of Africa and Latin America often declare their profits in Switzerland, Bermuda, or some other tax haven. The result is that some of the poorest countries in the world lose out on much-needed tax revenue.

Dr Sheila Killian, of the University of Limerick, put it well when she said:

 “…since business is now international, it is important that the taxes are designed not only with a domestic agenda in mind, but with a view to their consequences internationally, particularly for vulnerable economies in the global South.”

The point is also driven home by the Tax Justice Network (TJN), which says on its website:

“Supporters of tax havens point to the wealth enjoyed by such tax havens as Switzerland or the Cayman Islands to bolster their arguments. This is like pointing to the wealth of a corrupt politician and arguing that corruption is therefore a good thing: tax havens effectively appropriate other countries’ taxes for themselves.”

Furthermore, TJN also highlights the alarming fact that least $11 trillion is stashed away in tax havens around the globe. Why do our politicians feel the need to be part of this international crime ring which assists in the destruction of developing economies?

The reduction of corporation tax will almost certainly prove to be a costly mistake. The Wilberforce Society’s report concluded that it “could damage economic activity (by reducing local spending and increasing unemployment) and could have inequitable results, depending on where spending cuts or tax rises fell”.  At a time when hundreds of thousands of public sector workers are losing their jobs based on the spurious claim that they are “unaffordable”, all workers should stand in firm opposition to this latest spate of corporate welfare.