Cuts or Taxes?

Saturday, 6th November 2010 at 1:16 UTC 4 comments

Last Saturday, I, along with many others around Britain, helped to close down Vodafone stores in protest at their multi-billion pound tax avoidance. You can read up on the specifics, including the Private Eye article, elsewhere, but I want to put out some arguments about the wider need to tackle the tax crisis that we are hearing so little about.

The Vodafone issue had already appeared in a couple of newspapers, but little or nothing had been said or done about it, least of all by those who should be out collecting the taxes, until 70 activists in London piled through the doors of Vodafone’s flagship Oxford Street store and into the eye of the media. The resulting days of protests in and outside Vodafone shops shows little sign of fading entirely, though I suspect 21 stores on a single day will remain the record.

So why Vodafone? Well, beyond the basic facts of their tax dealings, Vodafone are very much an image driven company – their clear branding dominates billboards and parades of shops, making them quite an easy target. They are also tied to a business model of repeat business; after all, people often stay with a provider for years, rather simply walking into a shop and making a one-off purchase.

In a sense, luck would have it that the perfect handle would be found on the tax issue – something so distributed around the country that almost anyone can find a shop to protest outside, and with a product where the effects can’t just be measured with reductions in sales, but in contracts broken or not renewed where the campaign is given as the reason. A small trickle of these have already begun. It can be hard to get a handle on an issue like a mining company refusing to pay – they have few customers and probably no end-consumers to please. Vodafone have end-customers by the millions, and many of them have every right to be hacked off at their refusal to pull their weight in society at a time of cuts.

There are plenty of other companies, not least Philip Green’s empire, that deserve this kind of treatment, but, just as the Sweatshop movement needed a single logo to focus on (probably Nike) and just as Barclays Bank became the symbol of South African apartheid on our streets, so Vodafone provide a simple hand-hold on a much bigger and more complex issue. And it is these hand-holds that are proving elusive, leaving groups few options beyond the endless cycle of rallies, stalls and public meetings, useful as they are.

But the wave of protests have a much bigger significance within the wider narrative around the cuts. People are looking for a story, and the Conservatives have provided one: Labour spent too much, now everyone has to pay. But this can easily be set against another story, and one that many people are quite aware of: the banks played fast and loose with our money, and now the public sector are being made to pay, because we are being told there is no money.

But this still relies on the assumption that there is, in fact, no money. But research has shown, time and again, that somewhere between £90 and £150billion in tax is going uncollected. If we settle on the figure quoted by the PCS Union and supplied by the Tax Justice Network, we have £120billion that could be collected if the tax office was resourced properly. That’s nearly 50% more than Osborne cut, and nearly enough to ensure that the British consumer can afford to go on spending the country back into growth. The only difference being, it doesn’t leave the Conservatives laughing and cheering – and it won’t make former executives of Vodafone hapy, either.

We are being told that the private sector will make up the losses from the public sector, but we have no way for that to happen if those in the private sector do not share the spoils of their work. There is simply no better mechanism for this than paying taxes to cover the basic needs of those they wlll not or cannot, employ. Corporate Social Responsibility doesn’t do it – it only makes sense when something is to be gained directly from making the payments. An external organisation needs to make the decision in order for them to be transparent and fair. In the current arrangement of British society, we call this organisation the government and it happens, or rather, is intended to happen, through taxation.

So the tax crisis (the failure of the government to properly enforce the taxation regime, leading to a shortfall in incomings to pay for services) needs to be seen as a key means of combating the sense of “optionlessness” that we find ourselves in. It gives something extra to the narrative of an economy failing to serve the interests of the wider public, a message, a narrative, that will be key to bringing people together to challenge the short comings of the government’s

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Entry filed under: Activism, Corporations, Economics, News, Politics.

RIP The Conservative Party Draft Statement on Millbank Occupation

4 Comments Add your own

  • 1. Greg  |  Monday, 8th November 2010 at 16:03 UTC

    The private sector won’t be able to make up the losses from the public sector if it has no money to spend! There may be ~100bn in uncollected taxes, but that’s not free money. If Vodafone got taxed £10bn more, it would pass the costs onto its customers. Corporations aren’t there to act as government milchcows, they’re there to provide a service to their customers. Tax them too heavily and all you’re going to get is an economic slowdown, with no jobs for no employees and no services provided by the companies that aren’t employing them anymore.

    I’ve seen you confusing ‘tax avoidance’ and ‘tax evasion’. The boundary can be a bit grey but they’re different things: one is legal and the other isn’t. Vodafone’s only been seriously accused of the former and from a corporate point of view, why pay more tax than you have to? This could be seen as nothing more than good accounting and as a potential Vodafone customer, I want to see that: I wouldn’t be happy with a phone bill that was higher than necessary because the company accountants had been doing lacklustre work.

    Reply
  • 2. Graham Martin  |  Thursday, 11th November 2010 at 22:49 UTC

    An American warned me, via facebook, that a Tea Party Troll had appeared on my blog. I’ll let the reader decide whether I have deleted their comment or not.

    Reply
  • 3. Greg  |  Friday, 12th November 2010 at 12:39 UTC

    I vote yes. Otherwise, your friend is silly. Do you think they know the difference between tax avoidance and evasion?

    Reply
    • 4. Graham Martin  |  Friday, 12th November 2010 at 12:59 UTC

      Legally, yes. But I think they probably also know that the moral difference between them is so fractional as to be uninteresting.

      Reply

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