The recent furore surrounding Starbucks has once again pushed the issue of tax dodging and its relation to austerity into the limelight. But it has also brought into sharp focus the problem with calls to “pay your tax” being divorced from questions of class struggle.
Ahead of the October 20 “Future That Works” demonstration in London, it was revealed that the multi-million dollar coffee chain Starbucks has paid no tax in Britain for three years. This fuelled widespread anger and controversy, with UK Uncut calling a day of action against the company on 8 December. The pressure has seen questions raised in parliament and a promise from Starbucks to re-evaluate their UK tax policy.
This demonstrates the impact that direct action – or the threat thereof – can have. Starbucks have clearly offered concessions in the hope of staving off disruption to their business and the potential loss of profits that this represents. It also shows the power that UK Uncut as a group wields. After three years of consistent disruptive action on the high street, in many places their presence even remotely close by can lead stores such as Vodaphone to instinctively close their doors, whilst Starbucks has caved with a national day of action looming.
But there is a downside to this kind of campaign, waged in isolation from workers’ struggles. No sooner have Starbucks shifted over the tax question, than they have announced to staff that they are cutting paid lunch breaks, sick pay and a string of other work benefits. As one anonymous member of staff told the Guardian, “the perfect excuse for them is to say to staff ‘we’re going to pay more taxes, so…’”
The economics of the decision are obvious. For the bosses, the only goal is to maximise profit and minimise costs – and both taxes and labour are costs to the business. The threat of action from UK Uncut has meant that keeping their tax bill low potentially incurs to high a cost in lost business. Without an equivalent pressure from their workers, it makes perfect business sense to cut costs at the expense of the very people who produce their profit.
Needless to say, this is not an argument for taking no action at all. One of the reasons I have so much time for UK Uncut is that from 2010, alongside the student movement at its post-Millbank height, it breathed fresh life into the dead-before-it-began anti-austerity movement. With the unions still a long way from their first huge and passive A to B shambles in London, let alone coordinated one-day pension strikes at six month intervals, it was refreshing to see a network of essentially self-organised groups taking direct action and radicalising a whole new generation of people.
But the contradiction for UK Uncut was always that its actions were miles ahead of its politics. On the ground, a broad cross section including a sizeable group of anarchists and libertarian communists were organising and taking part in actions that disrupted and shut down businesses. Yet the “official” voice of the group always erred towards the soft left and liberalism – from the short-lived praising of “mutuals” like John Lewis as positive examples for companies to follow, to developing a legal wing and trying to take on cuts through the courts.
There has long been a union link, of course. PCS was one of the first trade unions to offer high profile support for UK Uncut, which they returned with their “SolidariTEA” action during the November 30 2011 pension strikes. But there has always been an unspoken dividing line – those who worked for the private sector companies they targeted, usually non-unionised, were forgotten if not completely alienated from the actions.
Contrast this with more recent radical developments in the anti-austerity struggle. For example, pickets against workfare have often explicitly approached staff and promoted the need to organise. The aim is still to disrupt business and threaten profits, but with the rights of workers an explicit part of the agenda it becomes a lot harder to take this out on them.
The other question that ought to be raised is how much the fight against austerity should focus on tax dodgers at all.
The reasoning behind UK Uncut’s choice of targets has always been “tax justice.” As set out in some detail in the PCS pamphlet There Is An Alternative, the question is simple – why should the public sector face sweeping cuts when there is an estimated £120 billion of avoided, evaded and uncollected tax? The amount of disruption UK Uncut caused pushed this question into the public eye, challenging the official narrative and hinting (albeit in a simplistic way) that cuts are born of class struggle rather than necessity.
The problem is that this idea has been taken far too literally. Boiled down to the chant of “pay your tax,” we are no longer using the tax gap as an illustration of why austerity is driven by class conflict rather than economic necessity. We are focusing our energies on getting companies to pay their tax because, if only they do that, all will be well.
The PCS Alternative pamphlet makes the following argument:
From 1918 to 1961 the UK national debt was over 100% of GDP. During that period the government introduced the welfare state, the NHS, state pensions, comprehensive education, built millions of council houses, and nationalised a range of industries. The public sector grew and there was economic growth.
The foundations for the welfare state were laid by the 1942 cross party Beveridge Report, which recommended the measures later implemented by Clement Atlee’s Labour government when they came to power in 1945. Wary of the worldwide revolutionary wave which followed the end of the First World War, there was a cross party consensus that war weary workers would need to be given incentives not to turn their discontent, or even their guns, on the government. The Tory Quintin Hogg summed up the prevailing mood in 1943 when he said “we must give them reform or they will give us revolution.” Following the war, a wave of squatting by homeless workers swept disused military bases and ‘bombed out’ residential areas. With the threat of revolution seeming to lurk behind these actions, the welfare state was a reform needed as much by the ruling class as by the workers.
But even this self-interest was not enough. The second strand of the cross party consensus was that a welfare state served ‘the national interest’ of building profitable British industry by shifting the cost of maintaining the workforce from private businesses onto the state via national insurance payments deducted from workers’ wages.
On top of which, as laid out in the Syndicalist Workers Federation pamphlet How Labour Governed, 1945-51, the same government which gave us the welfare state attacked workers in other ways. From collaborating with the TUC to enforce wage restraint to using soldiers to break a number of wildcat strikes. None of which is covered by the more rose-tinted description of public sector and economic growth in the Alternative pamphlet.
Tax justice illustrates that we don’t have to accept the official narrative of austerity and that something else is possible. But it doesn’t explain how we reach that something else – class struggle and class power. This is why, although UK Uncut’s methods have been very successful at agenda setting, they haven’t managed to make any tangible dent in the austerity programme.
Tax dodgers aren’t implementing austerity, whereas workfare providers are implementing welfare to work. This is why getting the latter to pull out of the scheme dents it and brings it closer to collapse. Getting Starbucks to pay more tax, though, won’t stop cuts – in fact, it will literally result in more cuts as they shift the cost onto their own, un-organised staff.
If we are to beat austerity, we need UK Uncut’s tactics. Indeed, it was Liverpool Uncut shifting the same tactics onto workfare providers that led to the first national day of action against workfare and kick-started the campaign which has claimed a number of scalps such as Holland & Barrett and shows no signs of relenting.
But austerity measures – from workfare to job cuts to service closures – need to be targeted directly. Making big companies pay their tax won’t stop the cuts. But a sustained wave of pickets, occupations and blockades – alongside strike action – that actively disrupt their implementation just might.
- 1. Chapter One, p26