Tom Sutcliffe: An awkward truth about tax avoiders

Social Studies: There's a perspective from which we're all fat cats, not just Sir Philip Green
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The Independent Online

It's an odd kind of insurrection that can number both the Daily Mail and members of the Government among its sympathisers – but something like that seems true of UK Uncut, the campaign to plug the tax gap created by legal forms of tax avoidance.

True, neither group are suggesting that we should all hit the high streets to glue our hands to the windows of offending chain stores – as some protesters did on Saturday in a series of demonstrations aimed at Topshop and its boss Sir Philip Green. But a leader in yesterday's Mail about the protests acknowledged that it could understand "why many hard-pressed Britons will share their sense of injustice".

Yesterday also saw the announcement by David Gauke, the Exchequer Secretary to the Treasury, of measures designed to seal off various loopholes and raise up to £2bn over the course of the current Parliament. And in both cases the relevant word was "fairness" – it being obvious even to a three-year-old that a world in which ordinary working people pay more tax (in percentage terms) than a billion-dollar corporation isn't really defensible. I have never thought of myself as a firebrand of direct action – more a tepid porridge-bowl of armchair indignation – but even I found myself wondering about joining in one of UK Uncut's protests. The cause is so clear-cut, the injustice so obvious. And, as it happens, I wouldn't even have to leave my armchair to do it. Last month, it was reported that Google is particularly efficient at tax avoidance, using various ways to pay an effective overseas tax rate of just 2.4 per cent. I can close down their local outlet with a click of a mouse.

But I also find myself wondering about the assumption that we securely know who the villains and the victims are in regards to tax avoidance – a thought prompted by the fact that both of the actions so far have concerned firms dependent on a global economy to make their products and their profit.

By coincidence on the same day that the protesters hit the high streets, Burma announced that it was to create its first Special Economic Zone, thus joining a global club of developing countries that already includes India, Pakistan, China and many others. Special Economic Zones, if you haven't heard of them, are effectively loopholes in geographical space – designated areas in which national tax regulations, labour regulations and workers' rights are suspended to the advantage of the international corporations who set up shop there. Outside the SEZ a small local business will pay one tax rate, inside it a very big international business will pay another – often a fraction of the first. And whatever those arrangements do for third-world economies, they are also central to what goods cost us on the high street.

Our expectation that we can upgrade our phone free at Vodafone every 12 or 18 months, our confidence that a visit to Topshop won't break the bank, can't be separated from tax arrangements that must look awfully like tax avoidance to those who are unable to take advantage of them. UK Uncut is absolutely right to highlight the unfairness of the tax system here – but it may be worth remembering that there's a perspective from which we're all fat cats, not just Sir Philip Green.

You can't have it both ways, Boris

I've been enjoying the responses of our World Cup sulkers to Fifa's decision to award the 2018 contest to Russia, despite all that assiduous English toadying. It has made some unexpected converts to the cause of WikiLeaks, for one thing, with David Mellor, among others, citing the disobliging description of Russia as a mafia state as if it had come from the highest international authority.

But the choicest tantrum came from Boris Johnson – happy (in advance of the decision) to commiserate with Fifa over the "evils" of the British media but after it to use one branch of it to make his rage and disappointment known. "I was so furious at the lies and graft," he told the press. So furious, in fact, that he reportedly decided to rescind his own contribution to it – the promise to Fifa chiefs that they would get free rooms at the Dorchester for the 2012 Olympics. What was this offer if it wasn't a bribe – an inducement intended to curry favour with someone in a position of power?

Not a big enough bribe, clearly – and one can understand how annoying it must be to feel that one has been outbid. But it surely undermines the attempt to present the English bid as a victim of its own probity. The only dignified time to excoriate the "corruption" of a selection process is before it takes place, not just after it's become clear that your sweeteners didn't work.

That's an awful lot of notes to carry off

When Frank Sinatra was accused of ferrying $2m in a briefcase into Cuba for the Mob, his defence was simple. "If you show me how to get $2m into a briefcase I'll give you $2m." Cash is unwieldy ... which raises the question of exactly how Eric Cantona is going to keep his promise to empty his bank account as part of his "bloodless revolution" against capitalism. Has he made advance arrangements with his bank to have large supplies of 500 euro notes available? And will he need a suitcase, a wheelbarrow or a small van to drive his assets away?

More to the point, where is he going to take them all? It might not only be the French media who will be interested.