There is nothing anti-business about wanting Boots to pay tax

Tax avoidance is the real catastrophe for Britain

It has been well reported by the right-wing press that Stefano Pessina, the chief executive of high street retailer Boots, told the Sunday Telegraph that a Labour government would be a “catastrophe” for Britain.

But it’s safe to say that his intervention, intended to cast doubts over Labour’s business credentials, hasn’t been a complete success. This is because much of the reaction to his comments has centred on the issue of tax avoidance, following scrutiny of his own company’s tax arrangements.

One of the first things the Monaco-based billionaire did after taking over Boots in 2007 was move its headquarters from Nottingham to a low-tax region of Switzerland. Anti-poverty charity War on Want claim this has helped Boots to dodge £1.1bn in taxes over the last seven years – enough to fund 78,000 NHS nurses for a year.

What makes this a particularly galling example of tax avoidance is the fact that a large proportion of Boots’ UK revenue – War on Want estimates 40 per cent – comes from the taxpayer, through its expanding service contracts in the NHS.

While it may be legal, tax avoidance is morally indefensible, especially at a time of economic hardship. And it is endemic, costing the UK £3.1bn in 2012/13, according to HMRC figures. And this is almost certainly a significant underestimate, as analysis by tax researcher Richard Murphy has shown.

There is cross-party consensus on the need to tackle tax avoidance, and there has been no shortage of politicians calling for action to be taken. In 2012, chancellor George Osborne labelled aggressive tax avoidance “morally repugnant”.

Unfortunately, his rhetoric hasn’t been matched by action. In the 2010 Spending Review he cut HMRC’s budget by £2bn, including 10,000 job losses, which has limited their ability to collect taxes. This is not the act of someone serious about getting to grips with tax avoidance.

Shadow chancellor Ed Balls said in November that a Labour government would double the fines that can be levied on people who avoid tax. This should be welcomed, but Labour could (and should) go further.

Companies engaged in tax avoidance should be denied public sector contracts. A simplified tax code would make it harder for avoiders to find loopholes. Greater international cooperation is required to ensure that companies cannot move profits across national borders to avoid paying tax, in the way Boots has. And we need to invest in HMRC to ensure it is properly staffed.

Getting tough on tax avoidance chimes with Labour’s pledge to stand up to big business. Of course, the Tories and right-wing media will claim it is indicative of an anti-business agenda.

But there is nothing anti-business about levelling the playing field on which businesses operate. If Boots can lower its prices because it doesn’t pay all the tax they owe, it forces the local pharmacist down the street out of business because they can’t compete.

And there is an electoral prize that awaits those committing to take meaningful action on this. There are few things in politics that resonate with the public more than pledging to clamp down on tax loopholes. Four in five Britons say that tax avoidance makes them feel angry.

At a time when the welfare state is being cut for the vulnerable and public sector workers enter their fifth year of a pay freeze, it offends a basic sense of fairness that wealthy individuals and multinationals get away with avoiding tax.

Mr Pessina believes Ed Miliband in number 10 would be a catastrophe. A Labour government should ensure that it is indeed a catastrophe – for those who avoid paying their fair share, because tax avoidance is a catastrophe for Britain.

Matthew Whittley is a recent graduate and Labour Party member and works as a researcher for a Midlands-based housing association. Follow him on Twitter

145 Responses to “There is nothing anti-business about wanting Boots to pay tax”

  1. Guest

    And you’re trying to CAUSE the depression.

  2. Kevin Stall

    Then why was it down graded 2 years ago? If we are such a good risky aren’t we still AS A?

  3. Kevin Stall

    Only because you don’t want people to worry about building up debt. It is a good analogy

  4. Guest

    Because, as was clearly stated, of austerity.

  5. Guest

    No, it’s simply not applicable. You are the one whose economic policies are running up the debt.

    It’s a hate lie to justify making sure the poor can’t have food and shelter, no more. As you boast about spending more than £27,000 per night!

  6. Leon Wolfeson

    It’s not the foreign debt talked about, of course, and is no in way equivalent to the WWII debt linked. The WWI debt, as the WWII article ones, is frozen and basically a dead letter.

    And basically the only reason that bond is being paid off is because we’re plunging towards deflation. It’s a desperation move.

  7. Kevin Stall

    Good try Leon. It’s the £45 per month to repay the loan. I did one time spend about 20,000 in a year to pay for a year of grad school in Australia. Luckily I sold my house and got off the property ladder to do it.

    And the calculator is accessed from the government site.https://www.gov.uk/student-finance/overview
    So your numbers are bogus.

  8. Guest

    Ah yes, the official figures are bogus, as you claim the poor can live on £0.00 per year, and that the initial average graduate wage is £8,000.00 higher than it us.

    Bogus, all bogus to you. Your FAXTS must be as you demand them!

    And yes, you sold one of your houses. Ohnoes! As you talk about abusing a right you’d deny others again. Now it’s only the holding company with houses, better for tax.

    Thanks, LB

  9. Kevin Stall

    One of my houses? No, not everyone can be as rich as you. You must have money coming out of your ears since you are happy to bay for other people’s university fees. Never had more than one house fact that one was the house my wife died in. Had it made wheelchair friendly for her.

    I picked 30,000 because that is the salary recent grads in my department start at. Once the get all of their professional qualifications the go higher.

  10. Guest

    Ah, you have mansions. As I apparently want the CHEAPER way of direct grants, I’m poor in your logic. Right. You’re fighting for downskilling and lower wages, rich man, nothing else.

    And you’re into fake disability claims too. Sad. Goes with rent fraud, of course.

    You picked 30K because it’s a lie. Because that’s what you pay a few rich kids in the department of the company under you. And maybe I should have had the 50K you demand I have before I can study. In a University you want to close. But I don’t, not being rich like you.

  11. Guest

    Complete nonsense. The British Overseas Terratories are not in the EU.

  12. Leon Wolfeson

    A complete and direct lie.
    The UK is in full control of it’s overseas territories (which are not in the EU), and there is no law demanding the City hide companies from tax.

    You don’t want the loopholes closed, there’s a sharp difference.
    Labour, Neoliberals want to do it? HAHAHAHAH.

  13. Leon Wolfeson

    Magical leftists. Magical socialists. Not since the 1970’s, of course, for the first…and Labour’s not been socialist (Social Democratic, yes) ever.

    As you make up EU laws demanding tax havens.

    You’re just scared of having to pay tax.

  14. Kryten2k35

    *facepalm* I give up.

  15. Kevin Stall

    A country has many assets, not just precious metals. A economy based on precious metals leads to regular recessions and a stifling economy. Central Bank run economies can adjust and regulate the economy removing MOST of the dips and recessions. If large scale debt was the bases of modern economies, why does the EU tightly control new members before acceptance into the EU or euro zone?

  16. Kevin Stall

    A country has many assets, not just precious metals. A economy based on precious metals leads to regular recessions and a stifling economy. Central Bank run economies can adjust and regulate the economy removing MOST of the dips and recessions. If large scale debt was the bases of modern economies, why does the EU tightly control new members before acceptance into the EU or euro zone?

  17. Kevin Stall

    If labour isn’t socialist why did they send members to the socialist convention several years ago? Remember when they had a fit about how homophobic their fellow socialist were.

  18. Kevin Stall

    If labour isn’t socialist why did they send members to the socialist convention several years ago? Remember when they had a fit about how homophobic their fellow socialist were.

  19. Kevin Stall

    That is what a surveyor makes upon graduation from university,

  20. Kevin Stall

    That is what a surveyor makes upon graduation from university,

  21. Leon Wolfeson

    The socialist international? PR, as far as I can tell.

  22. Guest

    You attempted to use it as a generalisation. No, there is no set wage scale for surveyors and there are not guaranteed jobs. You’re talking about a rich-kid provided job…from the family…

  23. Kryten2k35

    The BoE creates new debt every single year. It prints money which the government borrows from it, at interest.

    While I don’t disagree that it’s not a messed up system, it’s still the system. The government will always borrow money from itself and through Government issued bonds. It will never, ever be in a position where it doesn’t borrow money. Not unless we do away with the concept of money.

  24. Kryten2k35

    We’ve supposedly paid back Canada and the US, though, which I still find hard to believe.

    The United States benefited much more greatly from WW2 then simply lending us money. Overnight they became the world’s superpower, overthrowing the UK and it’s been there ever since. It’s hard not to see that as being somewhat orchestrated (what with their lack of interest in the conflict for some time). Almost like they let us bankrupt ourselves staving off invasion, then offered us a crippling loan that catapulted them into the top spot.

    So, it’s no surprised they give precisely no fucks about getting the loans back from us.

  25. Leon Wolfeson

    Not really – America just didn’t get bombed. War is often like that.

  26. Kryten2k35

    There was still that global shift in power overnight.

  27. Leon Wolfeson

    Yes, because Europe’s economy was bombed, Russia was still playing catch-up and Asia was wrecked.

    The USA took advantage of that. It’s not a conspiracy, though, but the fortunes of war.

  28. Kevin Stall

    They don’t have to create debt. Many countries using the same system without debt being created. They have gotten so use to it that they do it out of habit. Actually the fiat money itself is not debt. People accept it because of perceived value, not intrinsic value.

  29. Kryten2k35

    Any country that uses the same system creates debt as they do so. I’m telling you that if we stopped borrowing money our economy would crash. It’s a fact and irrefutable.

  30. Kevin Stall

    The world benefited economically from WW2. It ended the great depression. New markets of export was opened. Trade increase significantly with South America.

  31. Kevin Stall

    Not by Germany but the Japanese did bomb both Hawaii and Alaska. And actually invaded Alaska with troops.

  32. Kevin Stall

    Thanks for proving my point, that free university will not help the poor because they can’t afford to support themselves through school even with free university fees. The graduate rate I quoted is the standard entry rate for surveyor grads in the civil service. now if you get an english lit degree or sociology degree yes you will be earning less. But the repayment amount is adjusted to the amount of money you earn.

    Now according to Plan 2 for those who borrow after 2012, someone earning 22,000 has to repay £7 per month for 20 years. Leon, would that break your budget?

  33. Kevin Stall

    Tell me Leon, does it take special study to be as ignorant as you or did you come by it naturally. Can’t handle facts so everyone must be rich and have mansions. Sorry but I live in a 1930’s semi outside of London so it is far from being a mansion or worth that much. I work as a civil servant and have no shares in any company. My father was also a civil servant who worked his way from clerk to deputy director of a region. There is no money in my family.

    I have been to university and have taken and paid off student loans. I have also paid my own way through school or had an employer pay for me when it was in their interest to do so. I like university, in fact I tried to get my employer to send me for some of the surveyor training that they have but they wouldn’t since due to my job and wheelchair I will never be a surveyor.

    Your knowledge of business practices leaves something to be desired. You seem to lack understanding that the cost of doing business is paid for not by the business owner but by the people who use the business. It is considered part of their overhead and the price they charge is adjusted to pay for any cost that is charged them.

  34. Kevin Stall

    I’m sorry but the department of Economics at my old university would disagree with you.

  35. Leon Wolfeson

    …None of which affected the main industrial heartlands of America.

  36. Kevin Stall

    Not if it lived within it’s means. Don’t take enough in, there are 2 solutions to that, increase the money you receive or cut the money you spend. You don’t have to live on credit.

    What happens when your creditors demand immediate payment? A debtor nation depends on people/countries loaning them money. And what happens when no country wants to loan you money? Are the countries all loaning you money also in debt? WHat will happen to Greece if the EU will not bail them out?

  37. Kevin Stall

    Only because the Japanese didn’t press their advantage early in the war. The worst the Japanese did was a few five inch shells. But they could have taken Hawaii easily and started on California which was a major aircraft industry area.

    I have talked with boat commanders who could have easily shelled the east coast but had orders not to. They sat right outside the entrance to New York and New Jersey watching.

  38. Kevin Stall

    You continually show your ignorance of economic effects. Everything is linked and has a knock on effect. Your stories of how everyone who disagrees with you is a 1%er. You want everyone to pay for you. Because you are incapable of supporting yourself.

  39. Leon Wolfeson

    You’re disagreeing to be disagreeable.

    And of course based on your personal anecdote, right.

  40. Guest

    Keep screaming nonsense at me, as you demand I be a PC bigot like you.
    I just don’t hate the poor as you do, get over it – and stop trying to starve British people, foreigner.

  41. Guest

    Yes, I’m sure Degree Print Mill Ltd…

  42. Guest

    So you’re ignorant of how debt maturity works, check.
    And you’re still blaming Greece for austerity, check.

    Your ignorance of economics continues.

  43. Guest

    Nope, I didn’t prove your claim that we must reduce University education by over 95%. As you make up nonsense I never said, ignoring how people went to University before loans.

    You are wrong of course, by a long way, but details, as you demand people with other degrees earn less because you hate the subjects. And you demand limits on what people earn, to control their budgets, right.

  44. Guest

    “UR SPECIAL IGNORANT”

    Nope, I am talking about you, personally, I’m not politically correct as you are and don’t generalise in that way.

    You live in a few million pounds of house, ohnoes. And you work as a political advisor, most of your income coming from a trust fund, right. And yes, you have family issues, and?

    You claim now to have gone to University since 1998. Right.

    And I understand business just fine, shame you don’t bother tor read what you copy/paste in. As you fight, hard, for not cutting costs.

  45. Kevin Stall

    You are hilarious. I never said anything about reducing university education by 95%. Never mentioned it. I just said we have 46% of degrees currently wasted with underemployment. Most of the degrees are going to earn less because there are not many jobs in them. Now if you want to provide free university education for select studies I would agree that is a good idea for a while. Medicine, engineering, teaching, science and math. But we need more apprenticeships, we need electricians, plumbers. Many people who have done apprenticeships earn more than some uni grads.

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