Independence for Cornwall?

Tuesday, 11 November 2008 10:11

Cornish nationalists are reported to be preparing a legal challenge to the UK government's decision to refuse the people of Cornwall national minority status. The Campaign of course has no view on the subject, but there is an important economic issue here.

Compare Jersey and Cornwall. People criticise Jersey for being a tax-dodge outfit but if it had been subject to standard UK taxes it would long have been a depressed area like Cornwall, sucking in funds and with high unemployment. Another example of the benefits of tax independence is Ă…land, the group of islands in the middle of the Baltic, belonging to Finland.

There is an analogy here with buskers on the London Underground. You would never see one at a quiet suburban station, whereas there is nearly always a busker or two at places like the bottom of the escalators at Victoria. Somewhere on the system there are marginal locations where it is just about worth doing it. At the best pitches, the buskers would still play even if they had to pay a hefty chunk of their takings, as it would still be worth while. On the other hand, if buskers at the marginal pitches were asked to pay anything at all, they wouldn't bother, and those pitches would just go out of use. On the other hand, if the charge took the form of a rent, with the marginal sites being free, then every usable pitch would be a viable location. This is discussed in another article on the Campaign's web site, Sounds from the deep

There is an exact analogy with the tax system. The same tax has to be paid, per unit of added value, regardless of whether the business is in Penzance, Peterhead or Paddington. This has the effect of knocking out the marginal locations, mostly those on the fringes or otherwise suffering from geographical disadvantages. The tax system needs to be reformed, to operate more like a rental charge.

This is not in itself an argument for independence for Cornwall or anywhere else on the fringes of the UK. But if the government does not address the issue of geographical advantage and disadvantage and adapt the tax system to acknowledge the variations, the forces which will tend to break up the country will become stronger. If the UK eventually falls apart, it will happen as a result of neglect of the natural differences between its parts.


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