As through this world I wander
I meet lots of funny men.
Some’ll rob you with a six-gun
And some with a fountain pen.
-Woody Guthrie, “The Ballad of Pretty Boy Floyd”
Parliament, in the ‘robust’ shape of Margaret Hodge, has been mounting a determined appeal to companies to donate money to pay off the national debt. In particular, they lighted on the high profile form of Starbucks. It always helps to have a celebrity to pick on, makes life easier for their mates in the media.
Starbucks were paying all the tax that UK parliamentarians had legislated for, but they had all this lovely money swishing through their bank accounts, and the Hodge Fund didn’t see why they shouldn’t ask for some of it. Nicely, mind.
They could have asked all the Guardian journalists to make a voluntary donation out of their pay, but that wouldn’t have appealed so much to the foot-soldiers, so Starbucks it was.
Having harried and humiliated Starbucks, against all the rules of chugging, to find a way to increase their profits and thus pay more tax, Starbucks finally agreed and went away to think about it.
Profit, being the difference between what it costs you to produce an item, and what you can sell it for (that bit added for stray Guardian readers who have a problem with this concept) can be increased in a number of ways.
1. You can put your prices up – the ‘BBC’ method, and in effect tax each of your customers a small amount so that the total can be legally handed to the Treasury and pay off this debt.
2. You can cut the amount you pay to your suppliers – the ‘Tesco’ method, and one that has come in for much scorn in the left wing press.
3. Or you can cut your overheads – not pay the landlord, do away with the Christmas party, staff bonuses, expected pay increases, that sort of thing.
Starbucks have opted for No 3.
They will make more profit next year, and thus will pay more corporation tax as requested. They will make more profit because they will no longer pay their lowly workers sick pay from the first day they are sick, nor will they continue with their generous maternity benefits, nor will they pay their staff whilst they take their lunch break…
Perhaps Ms Hodge would have preferred that they take option 2 and cut the amount they pay to even more lowly paid workers in the third world for cultivating the coffee beans, or maybe she was an advocate of option 1, taxing all the canary wharf workers every time they bought a cup of coffee. Who knows, but option 3 is the one she has got, and I dare say she will count the increased corporation tax as some sort of achievement.
Quite why she didn’t suggest an option 4 – legislating to increase the amount of corporation tax that companies must pay, including those who benefit from ‘secretive company structures’, like, for instance, the Guardian Newspaper Trust in the Cayman Isles, or perhaps the Stemcor Trust of which her family is a beneficiary, I really don’t know – but hopefully she will be able to explain her frothy thinking to the 7,000 unskilled employees of Starbucks who will next year be contributing towards the national debt as requested…
I think I finally understand why some millionaires vote Labour…