Amazon could give the world a gift on its 25th birthday – by paying more tax

Turnover in Britain was nearly £2bn yet the company paid just £1.7m in corporation tax. It’s time for Jeff Bezos to cough up

Amazon’s boss, Jeff Bezos, makes an easy target for anti-poverty campaigners. He runs a near-trillion-dollar company that pays very little tax. He is personally worth $160bn and makes few charitable donations.

So there will be plenty of sympathy across the political spectrum for Jeremy Corbyn’s letter to Bezos wishing him and his company, which is celebrating its 25th anniversary, “many happy tax returns”.

Amazon UK paid only £1.7m in corporation tax in 2017, despite its pre-tax profits tripling to £72m. Quite how the company’s profitability is this low when turnover in Britain for 2017 rose 35%, from £1.46bn to £1.98bn, is beyond most people’s comprehension.

Unions also complain that Amazon ranks among the worst employers. Not so much for its pay scales, which start above the real living wage of £9 an hour as determined by the Living Wage Foundation; instead unions are angry at their members working long shifts in warehouses, under pressure to hit targets for the number of items they pick each day, which they say is causing pain and injuries. Amazon insists it offers a safe, modern working environment.

Bezos might have gained more sympathy if he had joined Giving Pledge, the US charity that asks the richest people in the world to hand over 50% of their wealth. His ex-wife, MacKenzie Bezos, has joined, adding her $38bn divorce settlement to the scheme. Bill Gates and his wife, Melinda, are members and Warren Buffett, the renowned investor worth $88bn, has signed up.

Bezos has taken his own path. But it is one that fails the philosopher Peter Singer’s test of philanthropy, which asks if the donation leaves the donor with just enough for a decent life, is supporting the poorest and does so in a way that helps the most people possible.

Among many relatively small donations, he gave $1m in 2016 to a not-for-profit homeless shelter in Seattle. In January 2018 he went further and gave $33m to a not-for-profit organisation that funds college scholarships for immigrants. In September last year he finally entered the major league, giving $2bn to the Bezos Day One Fund, launched to support education programmes for homeless families.

Amazon’s tax bill has stayed low over two decades as the company funded its expansion. One project that will be written off against tax is a fibreoptic cable stretching from the US to Africa: Bezos and Facebook’s Mark Zuckerberg are engaged in a race to beat Google to wire up a continent that the United Nations says will see the largest population growth on the planet over the next 30 years.

That might seem altruistic, but the cabling of an entire continent would be much better funded by African taxpayers, with the help of western taxpayers, and without strings attached. Unfortunately, as long as the tech giants manoeuvre to limit their tax liabilities there is not enough cash for public investment.

Philip Hammond has said that he will introduce a new tax on the digital giants – including Google, Facebook and Amazon – from April next year to increase the amount they pay in the UK.

The chancellor says the Treasury will apply a 2% tax on revenue from search engines, social media platforms and online marketplaces, and that this tax will be levied against technology firms that make more than £500m a year globally.

The tax is expected to raise just £30m from each company. It should be more. Bezos and Amazon should be made to cough up.

Unplugging the hybrid subsidy was sure to harm sales

Jaguar Land Rover’s Castle Bromwich plant
Jaguar Land Rover’s Castle Bromwich plant in the West Midlands is to build a range of electric cars. Photograph: Jaguar Land Rover/PA

Jaguar Land Rover has finally bitten the bullet and decided that its electric future may – at least in part – belong in Britain. Its West Midlands plant will be refitted to produce the next generation of hybrid and electric models: rare relief in an industry whose outlook in Britain has been bleak since the June 2016 referendum.

The commitment from Britain’s biggest car manufacturer to greener alternatives is welcome. Yet JLR’s news came only a day after new car sales figures showed a reverse in the uptake of alternatively fuelled vehicles year-on-year in June. Although pure electric car sales rose, those of plug-in hybrids halved. The cause is not hard to spot: the sudden abolition of the £2,500 hybrid subsidy last October, by the very government that trumpets its supposed ambitions for carbon reduction.

Although zero-emission cars are the ultimate goal, credible independent experts argue that hybrids are an important step, at least until the manufacturing capacity and the infrastructure to meet demand for fully electric cars are in place.

The black-cab drivers who have snapped up London’s new electric taxi now face a sizeable stick as well as a tempting carrot – and that vehicle remains essentially a hybrid, with a petrol-engine backup to reassure those venturing south of the River Thames.

Little wonder JLR agonised so long over its £1bn investment decision, which it believes can only pay off if Britain develops a battery supply capability to match. The government’s financial support for battery R&D fits its environmental strategy as much as its industrial strategy, but it is easy to imagine both being undermined: Greg Clark, the business secretary who stands sombrely in attendance while the car industry declines, will know that far more jobs than JLR can provide will vanish in a no-deal Brexit.

Yes, bookies are closing: but don’t blame curbs on FOBTs

Bookmakers predicted that state-imposed curbs on £100-a-spin fixed-odds betting terminals (FOBTs) would trigger shop closures and job losses. So it has proved. William Hill has confirmed 700 shops are earmarked for closure, threatening 4,500 jobs. Ladbrokes Coral’s owner, GVC, has drawn up similar plans, as has Betfred.

The industry may not have been lying when it forecast a bonfire of the bookies, but it was exaggerating. A report submitted to the Treasury, but kept secret from the public, indicated the industry could shed 21,000 jobs, with more than 4,000 shops closing. In reality, the total is looking more like half that.

Nor should gambling firms be allowed to blame retrenchment wholly on FOBT restrictions, at least not without some counterpoint. Revenues from the high street have been in long-term decline, while income from online operations is surging. Major betting firms’ web operations are cannibalising the custom on which their bricks-and-mortar networks rely. Some of those shops were on life support as a result, kept going only by the shot in the arm provided by FOBTs.

The flip side of that cosy arrangement was a roster of desperate addicts for whom the machines seemed to hold an inescapable allure. Thousands of pounds could be lost by customers in just a few hours – and frequently was. The government eventually resolved that it was better to dispense with the machines altogether, at the risk of harming the gambling industry, than allow them to continue, at the risk of harming the public.

Rules that allowed four FOBTs per shop had also encouraged bookmakers to open multiple premises in order to squeeze as many machines as possible into a small area. In many cases, these were in low-income neighbourhoods where punters could ill afford big losses.

Now the crunch has come and bookies are paying the price for that overexpansion. They will blame anyone but themselves.

The GuardianTramp

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