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?
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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?