One of the few memories that I have of my father, who died when I was seven, is helping him store apples in a loft so that they could be used throughout the winter. The idea was make sure that they were as close together as possible so that we could make as much use as we could of the space; but at the same time to ensure that individual apples did not touch one another, so that if one were to start to rot the rottenness would not pass from one apple to another so infecting them all.
I can’t help thinking of this when I think about the mess we have got ourselves over the Apple finding. Our friend Eamon Delaney put his finger on the implications of what has happened in a piece in the Sunday Business Post Mr. Delaney makes the point that the Apple finding is very close to the very heart of how this state has operated since its very foundation.
In fact it may well go back further than that, to the time when Gerald Balfour launched his campaign “to kill home rule by kindness.” The political part of his project failed. But for good or ill he and the others such as Sir Horace Plunkett who worked alongside him, left the new state a legacy of government activism ( for example the multifarious activities of the Congested District Board, and The Department of Technical Instruction ) which dominated the way in which first the Free State and then Republic have acted.
Part of this was inevitably taxation. As Mr. Delaney points out the industrial policy of this state has always been grounded in the notion that the state could offer incoming businessmen a an extremely favourable tax environment which other jurisdictions simply could not match. I for one can remember advertisements inserted in the financial pages of British newspapers the sixties and seventies that made this clear. One of them ( I think ) went so far as to taunt the British Inland Revenue with the phrase “the one that got away.”
In the early 1980’s I was placing freelance articles in Irish business magazines about what the Industrial Development Authority was doing. My focus was to suggest that the IDA was not good at backing winners, and I doubted the wisdom of strategy that it was adopting. During the course of my enquiries it became obvious that the IDA and other state agencies ( not excluding the Revenue Commissioners ) were doing everything that they could to attract investment to Ireland.
It was also clear that the officials of the IDA knew very well that what they were doing infringed certainly the spirit of the European regulations, but also probably their letter. And they showed a good deal of nervousness on the issue. I could be wrong but my sense is now with hindsight that some kind of informal deal may perhaps have been done with the relevant authorities in Brussels who will have known what was happening but were turning a blind eye to what was being done in Dublin. There was certainly a lot of nodding and winking going on.
Well, well, whatever may have been the case the Apple finding has blown the whole case open. The fact is that policy makers in Dublin failed to see that whole free market culture of the EU was in conflict with the kind of industrial policy which was deeply engrained in the Irish State from, and even from before, its foundation.
The outcome of the current mess is difficult to predict. Word is that the governments and Apple’s appeal against the finding is likely to fail- but, of course, there is no way of knowing at this stage. If it does then the implications are going to be momentous. The rot is starting to spread from Apple to Apple, or rather from Multinational to Multinational, and from country to country.
Brexit, of course, makes the situation look all the more intriguing. It may well be that freed from the constraints of the EU that the UK- or at least parts of the UK – might be able to offer extremely dangerous competition to Ireland for incoming projects. Ireland would, it is true, be able to point to unimpeded access to the EU something which UK could not in those circumstances be able to match. The Financial Services Centre in Dublin could well be a beneficiary.
Nevertheless aggressively promoted Enterprise Zones / industrial estates in say Fishguard and Enniskillen where Corporation tax might be lower than in this state could become the stuff of nightmares in Dublin. Irish policy makers are going to have to start arranging their apples with great care.