The Politician, The Newspaper Mogul and the ‘grubby’ tax deal
Most countries try and attract inwards investment from large corporations- after all, why else would the UK, in times where we are trying to maximise tax revenues, reduce the rate of corporation tax? The simple fact is that lower corporation tax rates are more likely to attract businesses, and their associated benefits of employment and economic boost; from 1 April this year the UK main rate of CT will fall to a measly 25%.
Still, this rate isn’t quite low enough for some bottom-feeders, and some countries, possibly including those who don’t actually have full fiscal independence yet, seem willing to plunge the depths in order to reel in a big catch.
If this sounds fishy, you might be right. The Scottish Daily Record is reporting that MSPs are “outraged” at the suggestion that First Minister Alex Salmond has been having private discussions with your friend and ours, Rupert Murdoch, with the aim of tempting News International, and possibly BSkyB, into relocating to Scotland on a promise of a lower corporation tax rate being introduced.
In return for saving millions of pounds in tax, Murdoch would reportedly use his newspapers to campaign for independence or ‘maximum devolution’ which would put the Scottish Government in control of all Scottish tax. Currently, Holyrood only has minimal tax adjusting powers agreed, including the ability to adjust income tax by up to 10% from the main UK rate.
It has been suggested that Mr Salmond is offering a CT rate of between 10% and 15%, possibly less than half the current UK rate. Corporation Tax in the Republic of Ireland now starts at 12.5%, up from the recent 10% rate at which the UK considered Ireland a ‘tax haven’ for corporation tax purposes.
But is this all speculation and rumours? How have the Daily Record journalists got hold of this information? have they been privy to private conversations? Of course not.
One major source of the ‘leak’ is the BBC’s journalist Andrew Neil, who interviewed Alex Salmond for the Sunday Politics show. He tweeted that it was “Clear to me that during Salmond-Murdoch summit, Rupe indicated if corporation tax 10per cent in indie Scotland, he could move BSkyB north.” He added, “speaking to Salmond after cameras stopped, got impression his NBF, Rupert Murdoch, dangled moving BSkyB toEdinburgh post-independence.” His tweets further suggest that Murdoch is seeking vengeance on the UK after the phone hacking scandal and thinks breaking up the union is the best way to achieve this.
But not all of Mr Salmond’s fellow Scots seem as keen as Anna Nicole Smith to get into bed with an old man who has lots of money. Lib Dem leader Willie Rennie told the Daily Record: “Salmond is seeking a grubby deal with Murdoch to support splitting Scotland from the rest of the UK. The First Minister has confirmed that he will dine out with the devil to get his way on independence.”
A spokesman for Mr Salmond confirmed the two men had met, saying “The First Minister and Mr Murdoch discussed the potential for further investment within the country. Mr Murdoch was keen to express his view that the current debate on Scotland’s constitutional future continued to make Scotland an attractive place for inward investment.”
Sounds like a done deal.