It really wasn’t very surprising to see the levels of anger vented towards Amazon, Google and Starbucks earlier this week regarding the minuscule amounts of tax they each pay into the UK’s coffers compared to their revenues. It’s not new news for anyone with a bit of understanding of the way multinationals operate, but when the levels of tax avoidance achieved came into the public arena through the Parliamentary Public Accounts Committee’s grilling of the three companies representatives on Monday it was hard not to get angry. It wasn’t necessarily the way that they justified the perfectly legal way they get away with paying such small amounts of tax that was the most irritating aspect of the interrogation. Instead what put my back up was the arrogant attitudes displayed along with the deliberately vague and empty answers given to some very valid questions.
You could sense the levels of frustration boiling over amongst the MPs on the panel as their attempts to extract information were continually batted away or met with resistance. Andrew Cecil, director of public policy at Amazon put on a particularly wince-inducing performance that clearly incensed the panel. It was entirely reasonable for Nick Smith MP to describe his failure to answer questions as “pathetic”. The Chair, Margaret Hodge hit the nail on the head when she told the unlucky trio: “We’re not accusing you of being illegal, we are accusing you of being immoral.” She went on to claim the combined tax avoidance strategies of just Apple, eBay, Facebook, Google and Starbucks deprive the treasury of nearly £900 million.
There have been calls again this week from various places to boycott Starbucks, although less so for Amazon and Google. To boycott a coffee shop is really not a big deal; you just go to the next one down the road, but boycotting Amazon takes a bit more commitment as the low prices and ease of use mean finding an equivalent requires some energy and effort. Taking action against Google on the other hand by using Bing or Yahoo instead definitely doesn’t give the feeling that Google will sit up and pay attention to you actions.
Boycotting, unless it’s widespread and sustained, is not going to be the answer to getting these companies to pay more tax. What these calls do highlight is the level of annoyance amongst the public. Other retailers have reasons to be angry too. The managing director of John Lewis (who do pay their fair share of tax) said on Wednesday that Amazon would “outinvest and ultimately out-trade” businesses paying full taxes in the UK, risking driving them out of business if the Government does not take action to force the online retailer to pay tax fairly in Britain.
To me what this demonstrates is that as humans we have an innate desire to see things being done in a just and fair way, especially when it affects us directly. It goes against the evolutionary concept of the survival of the fittest. Instead justice and fairness give our lives structure, stability and order. We intrinsically feel aggrieved when we see others who are richer than us playing the system to their advantage and consequently contributing less to our society when if anything, they should be giving more.
So why do those running these big multinationals not give the impression that they feel need to play fairly, when those of us lower down the ladder generally think the opposite? Have they become immoral or amoral? The reason I believe is detachment. Just as plenty of us are happy to buy cheap clothes that may have been produced in an Asian sweatshop, because we don’t see the people behind the product, so those running vastly large businesses across several countries will be focusing on the numbers that guarantee them the best returns. They have separated themselves from the societies they trade in. It’s only when I realise someone is being exploited in order to allow me to purchase a product at such a low price that I begin to consider whether there’s a more ethical alternative. It comes down to relationship again. I don’t want to rip off someone I know because I will feel guilty, but the guilt is massively reduced if it affects someone who is faceless and unknown to me. These companies are acting in an immoral way because they function outside of community and have no reason to. It’s not part of their ethos and it makes very little difference whether they take it into consideration. For a local small business being part of a community is a big factor and it needs to act accordingly.
The best Biblical example I can think of that relates to this were the tax collectors at the time of Jesus. They were Jews working for the Romans and as a result were set apart from their own people because they were hated for siding with the Romans. They worked within the law collecting taxes and also taking an additional cut for themselves putting the taxpayer in a worse off situation than they should have been. There was good reason not to like them. Zacchaeus was probably the most famous of these tax collectors. What turned him around was an encounter with Jesus. Jesus broke down Zacchaeus’ separation and let him see that giving was far better than taking. Once again it shows us the effect that having an encounter with Jesus has on someone.
It would be fabulous to see heads of these international companies experiencing something that made them want to invest in the countries they trade in rather than just seeing them as a source of income. Certainly legislation has a role to play in ensuring companies can’t get out of contributing fairly to a national economy. Transparency helps everyone to see who the ‘good guys’ and ‘bad guys’ are when it comes to how much tax is paid compared to revenues. It’s something that the Select Committee struggled to find out and needs addressing. An international law that requires companies divide up tax paid to countries according to the profits made in each one would potentially be a viable solution if international consensus could be reached.
It feels like a carrot and stick approach is going to be the most effective way of turning this situation around, ensuring companies see the value of contributing their fair share to an economy. Rather than just boycotting and shaming the worst offenders, why not celebrate and endorse those who give the most back to society through money, good treatment of their staff and engagement with communities? Let’s see published lists of the best companies and hear them talked about in the media and by politicians. Lets find out which companies give the most to charities as a proportion of their profits and reward them with recognition. Few companies want to be unpopular whilst others gain the favour of the consumer.
Most of all we need to see companies that whilst being financially savvy, care more about people than profits, that understand the benefits of giving over receiving and who want to work within a system that is just and fair. Unsurprisingly, that all sounds pretty biblical to me.
There’s something seriously wrong when the ‘moral’ companies such as John Lewis who are held up by government ministers as an exemplary business model believe they are in trouble long-term because they are unable to compete on a level playing field with their rather less moral competitors. It’s time this was fixed and it all starts with placing a sound ethical framework at the heart of the way we want to see business done in our country. There’s too much at stake to just let market forces dictate the game. Leave things as they are and we all lose out. Turn things around and ultimately we all win. Seems like a no-brainer to me.