I’m having a busy family day today, advertising my lack of snooker skills, so I haven’t time to write in detail about yesterday’s events with Richard Murphy. Suffice it to say that they were fascinating, informative and inspiring – the most fun you can possibly imagine having with corporation tax.
For Richard, of course, the big day is today, with Jeremy Corbyn’s resounding victory, and much credit for this success must go to Richard’s wise and far-seeing economic analysis.
I’ll just add, here, the text of my short talk at the evening event, kindly tweeted by the commentator Alan in Belfast as “stonkingly good”.
“This week in particular, it’s easy to see why reducing corporation tax has been such a popular policy here. For the Northern Ireland Executive, it’s a rare piece of common ground. In the midst of arguments about almost everything else, here’s a policy that both so-called ‘sides’ can agree on. It’s a policy that fits with the ideology of of Cameron’s Westminster cabinet, that delights the big business lobbyists and goes with the flow of neoliberal orthodoxy.
And if the promises are true: if it’s not just easy but also good, if it will benefit the Northern Ireland economy, bring jobs, investment, revenue, lay the foundations for long-term prosperity, well, what is there not to like? If only that pesky Steven Agnew didn’t keep raising objections…
So what is it about this policy that keeps us in the Green Party out of the general consensus? And why do I in particular, as a Christian, believe that it would be a terrible mistake?
Christian morality, in our political discourse, still refers overwhelmingly to issues of sex and reproduction. Equal marriage and abortion are the front runners, followed far in the distance by fuzzy aspirations about ending poverty, war and climate change.
Where does tax appear in this picture? It creeps in at both ends of the spectrum: on the right in the Tea Party question of whether governments have the right to tax at all; on the left in issues of tax avoidance and evasion. But the detail of the particular rate of a particular tax – is that a moral question?
I believe that in this case it is. When people of faith and people of principle do politics, it isn’t enough to go with the flow, to adopt orthodoxies wholesale or to abdicate responsibility for ‘technical detail’. We are obliged to deconstruct ideologies and to trace, so far as we possibly can, the probable effects of our actions. And for those following the Gospel of Jesus, the most important of those effects are those upon the poor.
Richard has done a wonderful job, both this evening and in his wider work, at dismantling the myths of supply-side, what even George Bush senior called ‘voodoo’ economics. We know, from looking at the evidence, that reducing corporation tax to low levels does not increase revenue, does not encourage real investment, does not create long-term jobs and that any headline growth it causes in the general economy is so unequally divided as to be a source of greater impoverishment and misery.
What lowering corporation tax does, it turns out, is exactly what you would expect it to do: it reduces the amount of tax payable by corporations and so increases their profits. It increases the dividends paid to shareholders, themselves overwhelmingly corporations and the very rich, and it increases the bonuses paid to already overpaid executives and tax professionals. ‘To those who have, more shall be given…’
Meanwhile, as we have heard, Northern Ireland’s businesses would be burdened with huge administrative costs and the block grant reduced by anything between two and seven hundred million pounds.
If we were a prosperous, stable, well-serviced society, perhaps we could afford to play these Treasure Island games, to risk millions on another neoliberal gamble. But we’re not. Deprivation and division in Northern Ireland are serious and worsening. Fuel poverty means that around three hundred thousand households already cannot afford to heat their homes. Our schools, colleges and universities are facing deep cuts which will inflict permanent damage on present and future generations. Our environment, public transport and infrastructure are suffering from years of neglect and deteriorating sharply. Community, environmental and arts groups across Northern Ireland, which have done invaluable work in holding our social fabric together, and speaking for the voiceless, are seeing their slender financial lifelines severed. And so-called ‘welfare reform’, the withdrawal of the social safety net, is likely to push thousands of families over the edge, into hunger, homelessness and despair. A recent Save the Children report estimated that, by the end of this Parliament, one in four children here will be living in poverty.
We don’t know how much the corporation tax reduction would cost the Northern Ireland budget overall. What we do know, is that the burden of that cost will be laid on the backs of the poor, of the disabled, and of our children. As a Christian, as someone who tries to follow the teaching of the Gospel, I can’t stand back and say that that’s okay. “Anyone who harms one of these….”
Yes, we do need investment in our economy. We need jobs, or, more precisely, we need positive, sustainable work which can provide secure livelihoods for employees and the self-employed. We need to support good businesses, especially indigenous ones, and we need to encourage and nurture creativity and beneficial innovation. We can do all these things by looking carefully at what we need, and what we are good at. Renewable energy, creative arts and film production, energy efficiency, higher and further education, sustainable agriculture and food production, high quality tourism – real support for these sectors would not only benefit our economy but the daily lives of our neighbours and the future of their children.
Just one final thought. What we do, in shaping our tax system, has real and serious effects, in this case enriching the already rich, impoverishing the already poor. But it does something else as well. It sends out messages about the priorities of its leaders, the path that it wants society to take. That’s why we tax harmful substances like tobacco and alcohol, why we used to tax unearned income at a higher rate than wages, why responsible governments raise taxes on petrol to encourage the use of sustainable transport. And this reduction sends a message as well. One message for the rich; come, my good and faithful master, let me sit at your right hand. And another message for the poor: Begone, I never knew you.
The reduction of corporation tax is a good policy for religious people. You have to have faith to believe in its virtue. But that faith isn’t a Christian one. We can do better.”
If, for any reason, you’d like to hear me delivering it, Alan has also created an audioboom file here.