Today, activists of the group 'UK Uncut' protested at Starbucks cafes across the nation over the companies choice not to pay corporation tax for the last three years. They attempted to turn branches into creches, refuges and homeless shelters to raise awareness of the effect the Coalition's cuts are having on women in society. Whilst it has been popular to jump on the bandwagon against Starbucks and join these protests, I will argue that UK Uncut should not have held this protest today for economic and moral reasons.
Firstly, let it be clearly said: Starbucks has committed no crime. They are not being prosecuted, and have done nothing illegal. Like any modern day multinational organisation, they were trying to maximise their profit margin by taking advantage of the 'coffee bean maneuver' and EU legislation on royalty payments. They exploited a tax loophole enforced by European Union acts, and as such the UK government, whether it be the Labour or Conservative-Liberal Coalition have been powerless to overhaul it and bring Starbucks into line. They have not 'avoided' paying tax, as they were under no obligation to do so by law.
With that in mind, why is there such turmoil at Starbucks? Well, whilst Starbucks has a responsibility to its shareholders, it also has a responsibility to the communities it operates within, which includes the UK. The British government secures the rights of Starbucks and its employees, such as its right to security from aggressive behaviour. Thus, it is completely unacceptable on a moral ground that Starbucks did not contribute something back to the British economy.
In response to pressure, Starbucks has now changed its policy on the matter, agreeing to pay £20m over the next two years. Surely that is the matter solved: Starbucks recognise now that what they did was morally reprehensible and as a recognition of that they will make recompense by paying a large sum of money to the government. But for UK Uncut, this is just "a desperate attempt to deflect public pressure", and unhappy at this prime example of capitalism gone wrong, they protested.
I think this extended boycott of Starbucks can only be bad. Firstly, who will really pay for this? The answer is the people who took the risk to work for Starbucks. Protests mean empty cafes: BBC political correspondent Ben Geoghegan said the Starbucks "flagship" store had been "virtually empty" due to the actions of UK Uncut. This means a drop in the revenue Starbucks will accumulate. When the CEO is working out how to handle the continued losses a boycott will bring, they will not take the cut out of their own money, or the investment they make in goods. Rather, it will come out of employee wages, potentially leading to redundancies. This happens in companies all around the world: damage to business hits hardest the people at the bottom. Thus, this continued action by UK Uncut may lead to a weaker Starbucks, which will force them to remove employees. This seems hardly consistent with UK Uncut's desire for a stronger economy and caring for the welfare of the hardworking person, but there you go.
Secondly, whilst I could understand this protest if Starbucks had still not agreed to pay money to the government, but in light of the fact they have agreed to pay £20m, what was the point? What more can you ask of Starbucks to do? Protests usually have some aim in mind, some goal which pressure will achieve. This protest seemed silly in light of Starbucks repentance, for ulterior motives or not. The UK Uncut spokeswoman claimed it was to raise awareness of tax evasion and that the government should be clamping down on it. However, as previously mentioned, Starbucks did not 'avoid' tax, and the Coalition could not force them to give money due to EU legislation, which no one country could overturn (indeed, most of the UK Uncut supporters in my experience are pro-Europe, and yet they blame the Conservatives for tax evasion...). It seems to me they had little moral justification for targeting Starbucks in such a manner.
At the heart of this discussion is really the issue of the deficit and debt: whose is it, and who should pay for it? There seems to be a myth that government debt and spending is not connected to normal people, as it is an abstract entity far away, and as such, it is unreasonable to expect the normal folk to take cuts in spending. But as with all myths, it is largely fictitious. What is meant by government spending is we, as a national community, have elected representatives to spend our money for us, on security, health, education etc. This, in itself, is a good thing: it allows for infrastructures to develop which benefit all people. So when the government spends money on a new school to be built, what that means is someone spent some of your money on a school being built. The problem is that the 'British Welfare State' has caused our spending to increase, so much so the government have overspent our money, and now we owe our debtors back. As we, as a collective spent that money, we, as a collective, should all contribute. If that means cuts to how much we spend, then whether it is tuition fees or policing or education, we must take responsibility for what we as a society did and repay the money we owe.
The argument UK Uncut primarily make is that we should tax the rich more than the poor, as they can afford to be taxed more than others. They argue this is fairer, and as such, we can maintain higher amounts of spending. This, like so many benevolent and well intentioned ideas, relies on a fallacy. It depends on the notion that government owns all things, and that government 'gives' tax breaks to people, as opposed to people 'paying less' tax. Thus, as government is really responsible for all the money people make, they should take far more from the rich than the poor.
I agree with UK Uncut that the rich should pay more than less rich folk toward the economic crisis in this country, as they can handle it more. However, that does not exempt everyone else. Just because the government is now able to tax undisclosed Swiss bank accounts due to a recent treaty does not mean you or I should stop contributing to the repayment and attempt to decrease our spending deficit. The middle classes, more than the rich or the poor, probably spent more combined on national projects, such as the expansion of the NHS, and we owe ourselves as moral citizens to take part of the cut. The relevance to Starbucks is that UK Uncut seems to believe clamping down on 'tax evasion' (which Starbucks did not do, I hasten to add) solves the problem. And to their credit, they rightly argue that those who are richer have a responsibility to those less fortunate to pay the tax they are legally obliged to pay. But it doesn't nearly cover the amount of money needed to stabilise the economy, and we guilty citizens, who enjoyed excess beyond our means, should help to pay it back.
In conclusion, UK Uncut did something wrong today: they protested against a franchise who repented for their inappropriate behaviour, and their actions will lead to harder working conditions for employees, possibly even redundancies. Whether or not you are convinced by my broader economic arguments for nationwide austerity, the fact UK Uncut's actions will lead to economic hardship for Starbucks staff, for an unmerited reason, seems an act of poor choice. This is a shame, as most member of UK Uncut have the best of intentions. I sincerely hope in the future they consider their actions more wisely.
