As the FT notes:
Ireland will cut welfare expenditure, slash the minimum wage, raise income tax and introduce a levy on land and property owners under a drastic austerity plan intended to put the public finances on a stable long-term footing.
Under the four-year programme, announced on Wednesday, the government intends to save €15bn ($20bn) between 2011 and 2014 — or about 4 per cent of annual economic output — with €10bn in public spending cuts and €5bn in new taxes and revenues.
But corporation tax stays at 12.5%.
Game over with tolerance for this, I say.
People in the UK deserve to be livid about this. £7 billion of our money will bail out Ireland. Not a penny went to Sheffield Forgemasters.
I could live with the loan. I understand the need for the loan. But Ireland is sticking two fingers up at the people of the Ulk in return — let’s not beat about the bush. They’re still blatantly stealing our tax base.
Osborne says he does not care. Of course he doesn’t. He still has fixations about low, flat taxes. But the people of the UK are being taken for a ride here and enough is enough.
This loan requires legislation. I sincerely hope labour opposes it for this reason. And if not they should be ashamed of themselves. UK money should not be used to bail out tax havens who impose higher taxes and welfare cuts on the people of the UK. And it’s time to say so.
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I agree completely on the corp tax issue Richard – but actually I’d go one stage further and say the bailout isn’t the best thing for Ireland to do anyway. A default would actually work better in the long run.
Sunny Hundal in Liberal Conspiracy makes the case very well: http://liberalconspiracy.org/2010/11/24/why-ireland-should-default-on-its-debts-and-start-afresh/
Incredible – and are the EU going to let them get away with it too?
I can’t find anywhere the terms of the loan. I presume we are charging a decent interest rate, so perhaps there is less reason to oppose the loan?
Plus I presume RBS are up to their necks in Irish debt, so maybe the loan is just protecting the interests of the UK taxpayer.
Time to resurrect the music thread – may I suggest The Kaiser Chiefs singing “I Predict a Riot”? 🙂
Care to tell your readers what percentage of UK budget corporation taxes actually bring in?
[…] the suggestion of a commentator here I offer the […]
@Daragh McDowell
10% before the crash
A little less now
I read this on the Guardian today:-
“The threshold for income tax will fall to €15,300 a year, from its current level of €18,300.
At present, around 45% of earners to not pay income tax — and economists suggest these changes will trim that to around 35%, and raise €1.9bn.”
So we are paying money to a nation which, even after these measures, still has a tax threshold twice as generous as our own. Low tax regimes should be left to sort out their own self-inflicted mess.
Richard, I was initially excited to read in the FT link that the measures included a site value tax on owners of land and property. Later on the news I heard mention of a property poll tax. Unfortunately this is what it has turned out to be: A site value tax, to be introduced in 2012, will cost households €100 per annum in its first year and is likely to rise to an average of €200 per household …
And then there was the reduction in the minimum wage. This is the craziest budget I’ve ever heard – and that’s saying something!
[…] already noted that it will rile the whole of Europe because there’s no move on corporation tax. But it’s then […]
[…] already noted that it will rile the whole of Europe because there’s no move on corporation tax. But it’s then […]
There are a considerable number of eurosceptics on the Tory back benches angry about the loan. Add Labour MPs and Unionist MPs and its passage is far from certain.
@Carol Wilcox
I think this deals with the problem of there being no rates in Ireland….
But it’s not a good solution
So Ireland cannot borrow on commercial terms except at high rates of interest, yet the UK can step in with a loan. I agree with Gregg above, the suspicion is that this is being done to prevent a further write down by RBS and Lloyds, with the hope that in few years time Ireland will be able to make the repayments or that it will be forgotten about.
That is why it is important to see the terms of the loan and as it will need to be passed by Parliament, there will be some transparency. At the same time the fact that the loan is in effect subsidising a low corporate tax rate will be made, I hope, by the opposition including those on the Conservative benches.