Ben Chu: Why UK Plc has to increase its revenues
Outlook There has been a collateral benefit from the corporation tax avoidance row. Already we are hearing less of the "corporate social responsibility" that businesses used to spout. Once upon a time Google's motto was "don't be evil". Now the chairman, Eric Schmidt, says of the search engine's industrial-scale profits tax avoidance, "it's called capitalism." Glad we've cleared that one up.
A more nuanced defence of corporation tax avoidance is also coalescing elsewhere though. "I cannot exactly blame the finance directors of these companies for doing their job," said a sympathetic Mayor of London, Boris Johnson. "Their salaries and livings depend on minimising tax exposure obligations on their companies."
Aidan Barclay agrees. It would be a "dereliction" of the duties of his Littlewoods directors, Mr Barclay said, if they did not pursue the UK taxman through the European courts for a £1bn VAT refund.
It is interesting that those who tend to bleat about the fiduciary duty of companies to avoid tax are often the same people who talk about something called "UK Plc" and the imperative of running Britain as if it were a giant corporation. Apparently this entails cutting fat (public-sector jobs), focusing on national competitiveness (reducing workers' protections) and generally following a small-state, deregulatory, agenda.
But what about the responsibility of the UK Government to its "shareholders" (also known as citizens) to maximise revenues by clamping down on dodgy tax avoidance by companies? Don't nations have fiduciary duties too?
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