Is it the Irish Tax rates, which enable Apple, Facebook and Google to pay negligible taxes¬†on their multi-billion revenues in¬†the UK and other EU member states? Or it is the Irish implementation of¬†the privacy,¬†data protection and other¬†directives?¬† Will an Austrian student succeed in raising the funding necessary to challenge the latter? What will be the consequences if he does?
Will¬†HMG really entrust our personal identities and data collected under statutory authority to those who base their ID governance in Dublin,¬†their IT and security staff¬†in India¬†or their files on the west coast of the US? You could not make up the idea that the Home Office¬†might seriously consider outsourcing the running of our¬†immigration and criminal records to an India software company¬†- but this is allegedly about to happen.
Does the Home Secretary’s¬†refusal to allow¬†Gary McKinnon to the US mark a sea change in attitudes to national sovereignty over matters of national security – or is it a fig leaf to cover a much bigger retreat?
A surprisingly proportion of the¬†UK tax base depends on the way that the rest of world still trusts London, more than Dublin¬†let alone¬†Dubai, Mumbai or New York, as a global trading centre. The plans of Apple,¬†Google and Microsoft to base¬†people (if not¬†necessarily tax and data governance) operations in London show that we still have an edge. Their plans to support educational activities (at all levels from schools to post-graduate) show¬†they would like to see that edge continue.
Were we to adopt an Irish approach to industrial strategy¬†and economic policy we would almost certainly see¬†inward investment and¬†tax revenues rise sharply and¬†an earlier investment led¬†recovery. Hence my repeated call for 100% tax relief on capital investment ¬†to make it attractive for Apple, Facebook, Google, Vodafone¬†and others to plough their UK profits into the UK infrastructure investment (including power supplies and¬†communications) that is necessary to support the trusted data centres and global on-line operations that should naturally be based in the UK – alongside the development (and production not merely research) of¬†products and services for the smart, green world of the Internet of Things.
On Monday evening I will be doing my bit, planning¬†a competition on the meaning of trust in the on-line world, to¬†help position London, not Dublin, as the on-line capital of Europe. My partners believe that government has no role in this process. ¬†I fear they are wrong. Government¬†has to get out of the way¬†and¬†actively remove both the regulatory¬†overheads that get in the way of trust and reduce the taxes which cost more (including by driving profit centres out of the UK)¬†than they raise. ¬†That will not happen without concerted political effort. More-over that effort should include the Trade Unions¬†- whose members (and members’ children and grandchildren) are losing out¬†on the jobs of the future while the Westminster Village¬†and political idealogues of right and left obsess¬†over the egalitarian battles of the past.
Next Thursday, at the Parliament and the Internet Conference, the Digital Policy¬†Alliance (EURIM)¬†has organised a session (14.10 – 15.00) to discuss the role that the UK could and should play in that brave new world.¬†Will¬†HMG (especially Treasury, BIS, DCMS, DECC and Home Office) allow the UK to do so?
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