Wednesday, 31 August 2016

The Irish Apple hoo-hah

There is something very troubling about the "ruling" of the EU Commission that a company that has a base in Ireland should pay more tax than the laws of the Republic of Ireland require to be paid.  That the company is a hugely profitable international enterprise with its home in the USA is neither here nor there.  The Commission has decreed that carefully and deliberately drawn laws of a member state of the European Union are not acceptable and must be replaced by something the Commission considers better.  

The magnificent Mr Paine has written on the subject ( and I agree with every word he wrote.  I want to look at the matter in a different context.  

Mr Paine's argument is that the UK can benefit enormously because international corporations could find an advantage by basing themselves here in the post-Brexit world rather than being subject to the risk of capricious retro-active laws being imposed by what remains of the EU commisariat.  He is undoubtedly correct.  

I respectfully suggest that two consequences can follow from what the EU Commission has done, neither of which will further the European Union "project".  The first is that the Republic of Ireland (and possibly other states) might consider it an appropriate reason to consider whether their own membership of the European Union is sustainable now that the Commission has made clear that it considers itself a better judge of domestic tax laws and, therefore, of domestic economic policy than the nation states that form the EU.  The second is that international companies, whether based in the USA or elsewhere, will have to think very carefully about establishing in EU countries now that they know their liability to tax (and, no doubt, to other policies that are bad for business) can be changed at the whim of the unelected Eurocrats.  

It is, I think, important not to get too excited about this issue.  As things were believed to be before the Irish Apple "ruling" international companies trading in any democratic country, EU or not, were at risk of changes of governments and changes of policy.  Included in what can properly be called the "democratic risk" was the risk that a new government would take a radically different approach to taxation that would negate the whole basis on which the company trades with that particular state.  We know that risk always exists because we have seen it so many times - every time it involves the populace electing a government that is opposed to the very idea of the market being the determinant of business success.  They always call themselves socialists when in fact they are the particular brand of socialism that is known as fascism.  It has happened all over the world and it can happen in an EU state if the people decide that is what they want.  Fair game, people can vote for whatever they want but they have to face the consequences.  I will chip-in with the obvious point that when the poor vote for the fascist form of socialism they are always the ones who lose the most; at least reality gives them the chance of thinking about what they have done and changing their choice at the next election.  

The context of the Irish Apple issue I want to address is something rather different, something more fundamental about the whole EU "project".  The Commission's "ruling" is, I believe, the clearest example yet that the EU "project" requires the elimination of the nation state.  It is one thing for the EU to make laws requiring uniformity in the regulation of health and safety rules at work or setting standards for the state fruit and vegetables should be in before they can be sold to the great unwashed.  It is something wholly different for it to rule that one nation state cannot adopt taxation policies that might give it an economic advantage over other EU states that choose a different tax strategy.  

Behind this is the need to eliminate competition between EU states in relation to their dealings with the rest of the world.  The government of the Republic of Ireland has adopted business taxation policies that it believes will be of the greatest benefit to the people of Ireland.  Whether those policies are or are not beneficial to the people of Ireland can only be tested over time, but they have been adopted because the Republic of Ireland is a democratic nation state and it is for the people of that state to decide at the next election whether those policies should remain or be replaced by whatever alternative(s) are offered at that election.  

The EU Commission clearly believes that decision is not for the electorate.  It believes, as all forms of unelected dictatorship have believed throughout political history, that it knows better.  Maybe it does, maybe it doesn't, but whose decision should it be?  On something as fundamental at business taxation - something Ireland itself proves to be a major factor in attracting business activity to a country - there is a stark choice.  Either it is for the nation state or it is not.  If it is not, the very concept of the nation state becomes redundant.  

My mind is taken back to one of the big television debates held prior to the referendum.  I think it was hosted by the BBC.  On the "remain" side there was a woman who holds a senior position in a trade union or possibly in the Trades Union Congress.  I cannot remember her name.  She bleated on about how leaving the EU would destroy what she quaintly referred to as "workers' rights".  I listened to her whitterings and was incredulous that those debating against her did not make the most obvious retort.  If our Parliament - that bunch of people who stood for election and were returned to our Parliament to make our laws - wanted to change "workers' rights" laws they have every right to do so.  The changes might or might not be welcomed by the trade union whitterer, but they will be legitimate changes because they are made by our Parliament.  

We now know that the legitimacy of laws passed by democratically elected parliaments of nation states is not recognised by the EU Commission.  Some of us will say we have known it for a long time.  The Irish Apple "ruling" is undeniable proof that the EU "project" involves the destruction of the nation state.