Via City A.M. – Boris on Starbucks and DC on judicial review

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On the cover of City A.M. this morning, Boris Johnson argues that Starbucks must do more for the UK. Apparently, the Mayor said of Starbucks, “It needs to reflect very fast and very seriously on its position…Either it makes a change in its tax arrangements or does a lot more to visibly serve society.”

Now, I was critical of Starbucks in the press myself, but the Mayor is mixing up two issues: paying tax and serving society. As I said in The Telegraph, “what I want is simple transparent tax law that is actually obeyed” but Starbucks already serves society visibly by producing large quantities of coffee and so on that people enjoy every day. Good business is inherently service to other people, not some kind of privilege or lawful offence for which one must make amends. It just ought to be taxed in a way that doesn’t promote outrage.

That’s why I was glad to see Allister Heath’s editorial this morning:

BRITAIN’S corporation tax system is broken. It is arbitrary, opaque, incomprehensible and unfair. At best, it is uncompetitive compared with other countries, such as Ireland; at worst it is a complete nightmare of complications and distorted incentives. Britain’s tax system is one of the worst things about the UK: It needs to be smashed up and replaced by something entirely new.

This is what the Mayor and others should be advocating: free markets in the service of society and a fair, transparent and, crucially, credible tax system in which everyone is treated equally. That’s why I support the report of the 2020 Tax Commission, which Allister chaired.

And then on page 13, I read of the Prime Minister’s plans to make judicial review less accessible. Apart from having just spent two days studying Magna Carta — “To no one will we sell, to no one will we refuse or delay, right or justice.” — I am also struck that increasing objections to the use of state power are not going to be met by decreasing the use of state power but by making it more difficult to object. It is an unhappy trajectory.

There is a way to alleviate tensions over land use by changing incentives while allowing proper protection of our treasured green spaces. It’s described in this short book. I have sent a copy to the new planning minister and I hope it is properly considered.

I’d like to be governed in line with the principles for a free society which were established at such cost. Unfortunately, it seems that the principles of state collectivism are now so deeply entrenched and assumed, we will have to wait a while.

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Comments & Responses

2 Responses so far.

  1. Chris says:

    Couldn’t you say (as part of anti-avoidance/evasion measures) that you cannot sell goods in this country (including via post) unless you have an office based in this country (if you are a corporation) and have publicly-viewable accounts? I’m sure Vodafone, Starbucks and Amazon would soon listen if they weren’t allowed to sell goods. I know that SOUNDS draconian, but if they aren’t adhering to the rules then they should expect penalisation.

    Obviously this goes hand in hand with making the system a lot less complicated. In fact, if the accounts of corporations were open and viewable, then if it could be seen that wages and dividends where being distributed (and therefore taxed) appropriately, then an argument could be made to dramatically reduce the corporation tax rate, on the basis that as long as the profits remain within the corporation then the personal profit to individuals is minimal (presuming capital gains are taxed appropriately also). needs a proper debate either way, to enable the ‘Tea Party’ types and ‘Occupy’ types to come to some measure of agreement on these issues, which I think is possible to a degree.

    • Nick Heath says:

      That plan sounds great on the face of it, but it adds a massive regulatory hurdle to new foreign entrants to the UK market. This means, consequently, that less trade is done with people in the UK, and therefore people in the UK are poorer; forcing companies to be physically located in a country they want to trade in doesn’t sound like a great idea in a digital marketplace.