Wednesday, 5 December 2012

The Froth of Deception

Some years ago, sitting in a Starbucks outlet in a northern city (well, it was a long time ago!), I heard an elderly gentleman remonstrating with the "barrista" that his cappuccino needed topping up.
"Look," he complained, "It's half empty and I've not even had a sip!"
"Ah, sir," the barrista responded, trying seriously to blame the customer,"You've let it stand too long. It has settled. You see sir, 50% of the product is hot air."
The customer's reply was unprintable, even here, and he immediately became an ex-customer.

Apparently, Starbucks seem to be masters of deception, a trait never more in evidence than when two of its senior executives haltingly tried to explain to British MPs earlier this week how in 15 years operating and expanding in Britain, they have made losses in all but one year and have consequently paid virtually no corporation tax at all. On sales of £3,100,000,000, it has paid just £8,600,000 in corporation tax - that's a meagre 0.2 (yes, zero-point-two) per cent. Along with Amazon and Google, who have similar records, it was criticised for failing to pay its "fair" share of tax - and so now it is likely that tomorrow it will make a pledge to pay more tax in the future.

Well, sorry if I am not partying, but how generous of them... They pledge to pay more in future. What does that mean? What about this pledge instead - they declare their true profits rather than hide them behind a charade of in house cross-charging and pay their proper whack. Starbucks had briefed their shareholders that their UK operation was making a 15% profit on turnover - very broadly, if that was the case over all 15 years, it would have generated around £450 millions profit with around £100 millions due to be paid in Corporation tax; not a mere £8.6 million. But of course the story they have given the HMRC and now MPs was rather different.

We hear endlessly from the giant corporations and their mouthpieces in the Lib Dem and Tory parties about the need for Britain to cut its already near worldwide low corporation taxes - even though it seems most of them pay a fraction of their dues (if indeed anything at all). A further reduction is pending for the next tax year. Otherwise, apparently they might go elsewhere and we would lose the alleged benefits of their presence on our shores.

Benefits? Tell that to the the countless perfectly good local coffee shops put out of business by Starbucks' undercutting them; or the bookstores - independents and even the once powerful Borders UK shops - put out of business by the march of Amazon.

And just this week, as Starbucks was finally caving into the bad publicity about its tax record, it implemented a fine wheeze to appear to be contributing to the community that succours it with one hand, while taking away with the other. The fig-leaf of its already piss poor corporate social responsibility record has never been more precariously worn.

On Monday, all its staff - mainly low paid, part-time barristas (their employment protection rights slashed since April by the Lib Dem Ministers of the Coalition), were told to sign away their contractual rights to a 30 minute paid lunch break and to some of their sick pay or face the sack. Rubbing salt in the wounds, they also told their pregnant staff no longer to expect a complimentary food hamper when their babies are born - instead they can look forward to a handy, Starbucks branded baby-gro and bib. Useful for wiping away all that deceptively frothy baby sick.

The Indian Parliament is currently debating whether to open up the third largest economy in the world to foreign direct investment (FDI).  This would open the doors to overseas corporations - with supermarket giants Walmart, Tesco and Carrefour leading the charge - to open up and start undercutting and destroying an economy currently 97% owned by small businesses, families and self-employed people. The western neoliberals and bankers claim that this will unleash a wave of creative competition in India; but the track record elsewhere shows the lie of these claims. India beware.

We can only hope that India resists the threats and charms of the multinationals; and, though sadly very much more in vain hope than genuine expectation, we can dream of the day that Britain's HMRC clamps down sufficiently on the tax games of the corporations that they do indeed depart. Because, whilst some of these mega-multinationals use their proxies in the popular press to peddle lies about immigrants, the EU and even political correctness having wrecked our way of life, it is in truth large, state-less corporations that have destroyed whole local economies, emptied our high streets and plundered our national wealth. As their tax and employment records show, they are totally self-serving and without conscience - the psychopaths of Joel Bakan's opus magnus - and we continue to treat with them at our own risk.

We have lived well without them before; we can easily and happily do so again. Just imagine if they were indeed gone, and all we had left were...bookshops, local cafes, and independent music stores.

And no more hot air in our mugs.

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