On 21 June, I wrote this paragraph in a post entitled The Beginning of a Regional Tax Policy?
Yet it is undoubtedly a good decision, because the UK has a much greater inequality of wealth between its richest and poorest parts than any other EU member, as we can see on this map. As I have said on many occasions, this is a structural problem with the UK economy (indeed the UK as a whole, for over-centralization of the economy goes hand-in-hand with political over-centralization) and therefore needs to be addressed in more radical ways than have been attempted up to now. This will be the first time—so far as I'm aware—that different tax rules will apply to different regions of the UK. It will be a ground-breaking departure from previous policy.
On 23 June, Russell Lawson of the Federation of Small Businesses wrote this on a post on Wales Home:
Certainly the mechanism of applying the NI holiday to only some of the nations and regions of the UK is a significant policy. On the one hand the UK has a much greater inequality of wealth between its richest and poorest parts than any other EU member which this is a structural problem with the UK economy and therefore needs to be addressed in more radical ways than have been attempted up to now. This will be the first time that different tax rules will apply to different regions of the UK, and is therefore a ground-breaking departure from previous policy.
His next paragraph was this:
On the other hand, however, businesspeople in one of those regions in the south east corner of England might well be pretty angry that the new party in power had gone back on its election promise ("any new business will pay no Employers National Insurance on the first ten employees it hires during its first year," Conservative Party manifesto).
My preceding paragraph had been:
If I were a Tory businessman in one of those regions in the south east corner of England, I might well be pretty angry that my party had not only gone back on its promise, but done so in a selective, arbitrary way.
And before that I had quoted the relevant line from the Tory manifesto.
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I learned some years ago not to be upset when someone takes your ideas and presents them as their own. Though when that happens I normally expect the idea to be presented back to me in slightly different words. On the contrary, I welcome it as a sign that the person not only agrees, but has taken the idea on board for themselves.
The reason I blog is to try and give others good ideas. So I'm delighted that Russell agrees with me on this matter. I wonder if he agrees with me on other things? Perhaps we should exchange a few emails.
11 comments:
Mate that's brilliant.
Shows the impact of blogs.
Regional tax policy?
http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm100623/debtext/100623-0001.htm#10062344000783
Thanks, Anon.
I looked at the link, and was intrigued by this exchange:
Mr Llwyd: May I press the hon. Gentleman on the question of corporation tax? Does he have any problem with that? At the end of the day, it is his Government's policy in the north of Ireland, so why does it not apply to Wales?
Mr David Jones: I am sure that the hon. Gentleman will welcome yesterday's announcements. There is no plan to regionalise corporation tax further in the United Kingdom, but I am sure that yesterday's announcements will offer a major boost to the Welsh economy.
All I can say is that there was no plan to apply the NI holiday only to the nations and regions outside the south east corner of England before the election. The policy only changed in the past six weeks. So give it another six weeks and they might get round to changing their minds on corporation tax too.
Dylan Jones-Evans repeated his calls for it today in a very good post on the IWA's Click on Wales site.
Finally, George Osborne has promised a review in the autumn of measures to help rebalance the Northern Irish economy, which would “examine mechanisms for changing the corporation tax rate”. Given that this comes on the back of a report prepared by a group of Northern Irish economists, isn’t it time a similar case was made for Wales from across the political spectrum. The IWA itself could co-ordinate such a critical review during the next few months. After all, a precedent has already been established for regional fiscal policy with the reduction in National Insurance contributions for new firms. Why not extend this to other instruments such as corporation tax?
By all means let's try and secure cross-party support for it, and get Scotland involved too. But I would think that DJE, as a leading Tory figure in Wales himself, might have more sway by trying to persuade his fellow Tories in Westminster to embrace the idea.
The Tories said they had "no plan" to increase VAT either ..... but they did it anyway!
It must be a code. When decrypted it means we will get power to vary corporation tax.
Seems that Russell Lawson is off-message with the FSB.
http://www.telegraph.co.uk/finance/businessclub/7902105/Jobs-stimulus-needed-to-arrest-slump-in-business-confidence.html
How so, Anon? What's happened is exactly what he and I thought would happen. The three SE regions of England are complaining that they want the same NI holiday as everywhere else, and existing businesses everywhere want the same holiday as new businesses.
Does that come as any surprise to you?
BTW, I never thought I would see you come to the defense of a member of the labour party
Russell Lawson imples that the FSB supports the policy of different levels of NI arrounf the UK. This is completely different to the FSBs position.
You have a very strange way of looking at things, Anon. I can't see anything from the quote to suggest that Lawson either supports or doesn't support it. He agrees with me that it's a significant difference of approach that hasn't been tried before.
As for the FSB, what on earth do you expect existing small business owners to say? This holiday is only being offered to new businesses that don't yet exist. The existing businesses want a slice of the pie. They would want any slice of any pie that they saw was being offered to people other than themselves.
Well, Welsh Ramblings has been bragging on the internet that the FSB stole your ideas and you were basically writing FSB policy.
Don't get me wrong, I support different tax levels in the 'regions', I'm just saying that Russell Lawson alludes that he does too in the article, when the FSB is against this.
If you don't think that he is doing anything apart from expressing a view, then Welsh Ramblings should stop twittering that you are writing FSB policy.
I would be delighted if Russell Lawson did agree with me about the desirability of using differing rates of taxation as a means of counteracting the over-centralization of the UK economy. Yet he didn't do so in the article on WalesHome and I'm not aware that he has done so anywhere else. If you know something I don't, please provide a link.
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