THE Taoiseach took a tough line on a number of controversial issues during his brief visit to London on Monday and risked a hostile reception from his British audience.
As well as insisting that British people would be acting imprudently if they chose to leave the EU, Enda Kenny ignored British objections to recent decisions in Brussels.
He also boasted of Ireland’s reputation as a destination for foreign investment while British taxpayers remain furious at revelations that several multi-national corporations have avoided paying millions of pounds of corporation tax in Britain by funnelling their profits through Ireland.
Despite acknowledging the importance of Ireland’s trade relationship with Britain, its largest export market, on several occasions during the day, Enda Kenny stuck to a hard EU line on Prime Minister David Cameron’s plan to hold a referendum on Britain’s EU membership after the next general election.
Speaking to City leaders at The Mansion House on Monday morning, Mr Kenny claimed that remaining within the EU was in Britain’s interest, saying: “We see the British relationship with the EU as being a two way relationship - Britain benefits from its membership of the EU, and the EU is better off with Britain as a leading member making a valued contribution.”
He also suggested that Ireland’s growing anxiety about Britain’s EU membership was rooted in the fear that Dublin's voice in the Union would be weakened without British support. “While Ireland’s future is closely tied to the EU, it is also closely connected to our nearest neighbours here in Britain,” he said. “Having the ability to work together within the European Union on the many issues on which we are of like mind - the single market, trade and so on – amplifies the impact of our excellent relationship generally.”
The Financial Times reported that Tánaiste Eamon Gilmore believes that Britain could leave the EU if a referendum was held. He added: “What can often happen in a referendum is you get a number of issues coalescing which can add to the No vote.”
Mr Kenny spoke at length about Ireland’s pursuit of banking reform during its six-month stint as Presidency of the EU, saying: “The role of banks in causing the economic crisis, and the banking policies that are required for economic recovery, are – you should be aware – probably far more controversial in Ireland than it is even in this country.”
He also highlighted the markedly different attitude of Ireland and Britain towards the decision to curb bankers’ bonuses.
George Osborne was over-ruled by all 26 other EU finance ministers last week after he refused to back the plan to cap bonuses at 100 per cent of annual salary or 200 per cent with shareholders’ approval. The Chancellor said that the cap could damage the City and make it more difficult to link bankers’ pay to their performance.
But Mr Kenny hailed the “good progress” that Ireland had made as Presidency in balancing the interests of all EU members in issues including “the desire to limit bankers’ pay while maintaining a competitive European banking sector”.
He spoke of the “broad support” that the proposals received, but made no reference of British objections.
Amid fears that the bonus cap could drive employees of British banks to non-EU rivals in New York, Hong Kong and Singapore, Mayor of London Boris Johnson said that the “moronic” proposal was one of the "most deluded" to come out of Europe in almost 2,000 years. The plans will be put to a formal vote in the European Parliament in April.
Aside from EU matters, the Taoiseach bragged about Ireland’s reputation as a location for foreign investment, which is widely believed to be a function of its aggressive corporate tax rate of 12.5 per cent, almost half the rate in Britain.
Mr Kenny said: “Ireland is now an exceptionally attractive location for investment. Competitiveness compared with our EU competitors has improved by over 20 per cent since 2009. We are ranked by independent studies as the second most attractive country globally for foreign direct investment.”
He added: “We are ranked first in the Eurozone for ease of doing business and first globally for the availability of skilled labour.”
His comments were made while British taxpayers continue to be angered by the revelations of large-scale tax avoidance by multi-national corporations, including Google, Apple and Facebook, that are legally funnelling their British profits through Irish sister companies, thereby minimising their contribution to the Treasury.
The major companies say that their shareholders are the main beneficiaries of the manoeuvre.
The Taoiseach is expected to make an appearance at this year’s G8 summit in Lough Erne, Co. Fermanagh, which David Cameron has vowed to use as an opportunity to get the world’s largest economies to cooperate in eliminating corporate tax avoidance. The meeting will take place in mid-June and follows an agreement reached by G20 ministers last month to crack down on abuses.
Ireland is not a part of the G8 or the G20.
Ireland’s Minister for Enterprise Richard Burton defended the ultra-low 12.5 per cent rate earlier this year. He said: “Lots of people have criticised it because they don’t like what we do, but it has always been clear that it does not breach any rules in terms of harmful tax competition.”
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