Belfast Telegraph

Friday 21 November 2014

These are taxing times, but it's Christmas

Eric Waugh
Eric Waugh

It is tough running a small business in Northern Ireland. Every month there are more of the big fish muscling in to elbow the smaller fry aside. But there are one or two things which need to be said to those who believe it is on for businesses here to have a special cut-rate profits tax.

As it is, small traders do not pay the full rate. Most pay 19%, not 30% - which cuts the gap with the Republic's 12.5% to more modest proportions. True, the reduced rate is to go up in 2009 - to 22%.

But if the level of profits tax rate is so vital, there is one way for the campaigners to get on to the Republic's rate: they can concentrate on winning a referendum which would vote Northern Ireland into the Republic.

Then they could have their 12.5%. But, really, it is not on to be part of the UK on Mondays, so that one can collect the best benefits, only to become part of the Republic on Tuesdays - to pay the lowest profits tax!

As for the attitude of Sir David Varney's committee, its subtext is quite clear: no one owes us a living in 2007 or 2008; although the poor mouthing of some in these parts would suggest that some citizens in Northern Ireland believe the opposite.

Significantly, the Northern Ireland Finance Minister, Mr Robinson, is not one of them. There are those who argue that, because of the travail of the last 30 years, Northern Ireland deserves a special deal. Two things here. The first is: NI has already got it! Public spending here has increased by 50% in the last decade! What this means is that the figure for public spending per head south of the border is now only 90% of what it is to the north of it. In fact the difference amounts to an extra £1,000 per head per annum in Northern Ireland.

The tax cut lobbyists argue that the lower profits tax would shrink this oversized public sector and enlarge the puny private sector here; but Varney is unconvinced.

What clinched his decision, though, will have been the 30% margin in public spending Northern Ireland already enjoys over other regions of the UK. Unemployment in Northern Ireland (3.6%) is now substantially lower than that in the UK as a whole (5.3) or in the EU (6.8). Together all these make further costly concessions politically impossible.

In any case, special deals for hard times is not the way things work in the big world outside.

I am old enough to remember the Second World War - and the unspeakably austere years which followed the peace, 1945-55. The UK, by resolving to fight on in 1940, may have made it possible for the Americans to save Europe.

The Americans rearmed us after the retreat from Dunkirk that summer. It suited them to do it, for they themselves were not ready.

But the UK had to pay for every scrap of armament - until its last dollar was gone. Then the arms continued to flow - on tick.

After the war, every penny had to be repaid. Secretly Roosevelt delighted in the opportunity to bleed the empire and hasten its demise.

So rationing got even worse in peace: food, clothes, even sweets. New cars - black only - had a two-year waiting list. Second hand models sold at even higher prices than the new. Austin and Morris were churning out new ones for dollar markets abroad to earn the wherewithal to repay the Americans. The rare holidaymakers venturing abroad could only have £25 in foreign currency. But did we at that time expect a special deal? Not a bit of it! We thought the Yanks a bit grasping - yet we tightened our belts and got on with it.

But it is the season of goodwill. Happy Christmas! This Christmas is headlights at half-past three. It is the beckoning flash to come on - when it is not your turn. There is a deal of goodwill out there, despite the few bad eggs.

It is the Mirror breaking into song and tilting, tongue in cheek, at an excess of PC on Radio 1: "Dreaming of a racially diverse Christmas, just like the ones we used to know ... "

It is Kathy Clugston reading the news on Radio 4 with impeccable clarity far and wide, yet every word a coded hello to this small corner. It is introducing a visiting French friend to some excellent champ over Christmas lunch at Lisbarnet in Co Down.

It is just that once-a-year time, warmly ancient and enduring; often over-sentimental and slightly crazy; but, at bottom, for most, informed by the heart of the matter. May you all enjoy.

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