Monday, 3 December 2012

Starbucks and the Three Bears

Reports that Starbucks is now offering to “renew discussions” with treasury officials on its laughable level of tax payments get serious media attention as press and politicians seek to shift the agenda towards public anger at the revenue-avoidance tendencies of international corporations.

Newspapers and broadcasters both link the move with news that chancellor George Osborne is to announce £154 million to recruit additional HMRC enforcers. If this measure sounds eerily similar to statements by Danny Alexander earlier this year – and which also have echoes of other conference promises – then you’re paying way too much attention to current events and/or not drinking nearly enough tap water.

As you would expect, Margaret Hodge and the Public Accounts committee also line up to say their bit on corporate tax-avoidance. The problem here though is that when groups of MPs start pontificating about morality and financial probity then much of the high ground they try to occupy soon turns into a Sussex cliff top. More to the point, recollections of the published exchanges between Fred Michel and Adam Smith should be enough remind us how influence is more likely to be exerted in Whitehall and by whom.

Political sabre-rattling toward big business is a seasonal favourite for governments. In this respect it resembles the annual pantomime with its own comforting ritual of contrived performances, stereotyped characters, predictable dialogue, a bit of juggling and the illusion of pubic participation. It is an irrelevance, a tinselled diversion and the intention is to keep everyone happy until the same time next year.

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