Tuesday, 8 February 2011

The Big Tax Avoiders

UK Uncut have published the response of Boots, Tesco and Vodaphone to the charge of massive tax avoidance at http://www.ukuncut.org.uk/blog/our-response-to-their-pr

They are not accused of tax evasion, of course, which would be illegal. The issue is the willingness of the Inland Revenue to come to such generous arrangements.

Capitalism (in the sense of unchecked ability of organisations and individuals to compete in a market in which they can buy up the 'means of production', use their weight to crush competition etc), whilst dynamic, is ultimately self-destructive. It leads to exploitation, and in the long run inefficiency, waste, social divisiveness and once-free markets destroyed by monopoly power; ultimately it implodes, destroying any who are vulnerable in the process. It actually depends on regulation for its survival. (Business people were strong supporters of the minimum wage, for instance, because it protected them from being undercut by exploitative 'cowboys' . . that's not to say the minimum wage is anything more than a nudge in the right direction).

The absolutely basic role of political governance in a nation state - the one which even the most right-wing people accept - is maintaining law and order and 'defending the nation'. The state has a legitimate monopoly on the use of force. (That's not to say I believe it should be used - only that the use of force by any other agency is even more wrong). That means that regulating the markets and business is the key task of government.

This primary responsibility has been evaded by UK governments since Thatcher - Thatcher, who actively promoted the interests of capitalists. The failure to hold the power of large capitalist enterprises - most especially the so-called financial 'services' industry (who, actually, does it serve, other than its own interests?) - in check has been a hallmark of the Blair/Brown governments. There are a number of excruciating speeches by Brown on YouTube where he is wooing the City and telling them how beautiful they are.

Is it that transnational corporations (like Boots, operating from a PO Box in Switzerland and paying 3% tax) are so powerful that no national government dare challenge them? Well, how did they get to be so powerful in the first place? But actually, I don't believe it. Regulation (which doesn't have to lead to reams of trivial red tape) is essential for healthy business.