Tax justice, austerity and class struggle

Tax justice, austerity and class struggle

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:

Quote:
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.

This is true. However, there was a reason that this happened the way it did. The Solidarity Federation pamphlet Fighting for Ourselves outlines the context1:

Quote:
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

Comments

Chilli Sauce
Dec 6 2012 13:38

That was awesome Phil. It's a blog that's needed to be written for a while and I'm glad you did it.

Two things I'd like to see:

(1) This paragraph is massively important and I think it'd be even better if it was developed a bit further:

Quote:
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.

(2) A version adapted for Catalyst...?

Chilli Sauce
Dec 6 2012 13:39

The other thing might be to consider submitting this to the Occupied Times.

Caiman del Barrio
Dec 6 2012 14:35

UK Uncut's planned "Refuge from the Cuts" action on Saturday is actually in quite bad taste IMO:

Quote:
It’s time for the government to wake up and smell the coffee. Women have had enough of being attacked by a cabinet of millionaires. But there is a refuge from the cuts. Join us on Saturday 8th December to transform the tax dodger Starbucks into services women depend on, such as refuges and crèches. Check the actions page to find an action near you. If there isn’t one, we’ve got a step-by-step guide on how you can organise one yourself.

On 5th December the Chancellor, George Osborne, will deliver his autumn statement, with even further spending cuts expected to be announced. Women are bearing the brunt of the cuts- particularly low paid women and their families. The government’s savage austerity plans are pushing the cause of women’s equality back decades as benefits, healthcare, Sure Start centres, childcare, rape and domestic abuse services are cut and female unemployment soars.

If the government took strong action to stop tax dodging by companies like Starbucks- who haven’t paid any income tax for the last three years- we could easily afford to prevent the £5.6m being cut from violence against women services, the 25% cut to funding for Sure Start centres and the further £10 billion benefit cuts.

Domestic violence increases at Christmas and during times of economic hardship. 230 women are turned away from refuges every day as a result of the government’s cuts to women’s services. Enough is enough.

Is your local rape crisis centre being closed? Then why not turn your local Starbucks into a refuge? Bring your kids, because 50% of people living in refuges are children. Housing benefit cut? Bring your sleeping bags. Are you working less hours because subsidised childcare is a thing of the past? You could set up a Starbucks crèche.

Check the actions page to find an action near you. If there isn’t one, we’ve got a step-by-step guide on how you can organise one yourself. UK Uncut actions are creative and fun. If anyone is nervous or has any questions, please get in touch by emailing ukuncut@gmail.com – we want as many women, men and children out as possible to show that we refuse to lose these services.

http://www.ukuncut.org.uk/blog/call-out-8-dec-refuge-from-the-cuts

#1 do they actually believe that - having pre-announced their targets and with a quasi-ideological commitment to not resisting/confronting police attacks - they'll be able to occupy any Starbucks for any considerable length of time?

#2 even if I'm wrong (and I really would like to be, far too many fucking Starbucks everywhere), how is an illegally occupied commercial property gonna be an appropriate reception centre & hostel for battered & abused women? It'll most likely be a scene of high tension and potential violence, with police, private security, street types, etc, hanging around threatening/hassling anyone who enters: would you recommend a woman seeking refuge to go there? And isn't the point of these places that they're secret anyway?

All in all, it looks and smells suspiciously like a symbolic political gimmick aimed at 'consciousness-raising' (which UK Uncut have form for: remember the plan to turn Barclays into a hospital or some shit?), in which case, it's a) really irresponsible of them to present it as something else & b) a flawed and largely useless tactic that's far from the quasi-direct action ethos that won them anarchist cheerleaders a couple of years back.

Rob Ray
Dec 6 2012 14:54

Just announced: Starbucks will be paying £10m over the next two years (1.26%, stats fans).

wojtek
Dec 6 2012 16:58

Moved here.

murraygw
Dec 9 2012 16:49

I guess the first major problem I have with this is the uncritical assessment of the role of tax in the conflict between labour and capital. Under capitalism, capital accumulates and reinforces the social power of capital over labour. Progressive taxation can play a central role in limiting capital accumulation, preventing excessive accumulation of money power by capital. Over time the power of capital can be curbed, while the power of labour (through organising and taking effective action) can increase to drive social change. Progressive tax is more than just about trying to fund a welfare state to stave off revolution, it can also be a vital tool in challenging the power of corporations and capital.

I also think the idea that forcing any company to pay corporation tax would automatically lead to reductions in workers pay and rights is quite lazily asserted, again without much thought. This should be a clear argument for the need to organise workers, not to never ask companies to give up their profits in case the bosses take this out on workers. And conversely, it implies that every hard fought pay rise by workers will inevitably reduce taxes, and therefore slowly reduce the tax revenue for the state.

UK Uncut has always worked closely with trade unions, supported trade unions and, when possible, tried to assert the need for a wider push against austerity. UK Uncut does not claim to be the whole anti-austerity movement, it tries to be just one part of it. Discounting this politics and relationship building with unions because a parallel campaign, that is focused on a workers rights issue, did more direct engagement with workers just doesn't make sense. At the UK Uncut actions I've been to workers have not been forgotten or alienated - at many actions I've seen people putting effort to engage the staff in the issues, and explaining the links between them as workers and them as citizens who rely on public services and in work benefits.

The idea that the 'official' message is far more liberal than that of the grassroots taking action also doesn't match my experience of UK Uncut at all. The phrase 'pay your tax' is only ever heard on actions, in shop occupations, by people taking action, while in press releases and in interviews, UK Uncut has often worked to highlight that the existence of alternatives like tackling tax avoidance shows that the cuts are a political choice - that they are ideological.

I also think the idea that UK Uncut has failed to stop austerity because it has failed to sufficiently articulate the need for class struggle is based on a total misreading of current politics. The current austerity drive is a continuation of nearly 30 years of neoliberalism, of the consolidation of class power and the crushing of organised labour. The idea that two years of shop occupations by a lose affiliation of activists could have reversed this is just not credible. I feel UK Uncut has done a huge amount to highlight the fact that the cuts are an ideological project, and done so in a way that many people have been able to engage with. Dismissive and lazy critiques, without offering constructive ideas of how the movement should develop, helps no one.

Chilli Sauce
Dec 9 2012 18:53

Wow, there's a lot to say there murray.

At the risk of sounding patronising, I think your experience as a UKUnCut activist may have coloured the way you read this article. It wasn't meant to be a comprehensive piece on the entire anti-cuts movement, but a short blog hightling some critiques while praising other aspects of UKUnCut. There's also lots of suggestions on how the movement might move forward. They're certainly there in the links if you wanted to have a deeper conversation.

I'll say a few things by way of response.

Quote:
UK Uncut has always worked closely with trade unions, supported trade unions

First off, the vast majority of high street shops aren't unionised.

Second, this ignores a deeper critique of the trade unions regarding austerity.

Some unions, like the CWU, have de facto supported workfare. USDAW, which has agreements at Sainsbury's and Tesco, didn't make workfare an issue when those companies began implementing it. The rest (I'm thinking of the public section unions in particular) have offered little to no actual resistance in fighting back austerity--instead opting for useless and symbolic one day strikes, then settling for a place at the negotiating table to implement austerity, as opposed to escalating the struggle to actually win concessions.

Note here, that just because I say a union has acted a particular way, that's not a reflection on the feelings and actions of its membership. In the CWU, a group of member did confront the executive on their support of workfare at Royal Mail and make it a national issue within the union.

But--due largely to the structural role they play within capitalism--the national leadership of the unions has held back the development of the anti-austerity movement through (1) demobilisation of workforce and recomending workers accept cuts after, at most, largely symbolic actions and (2) supporting the division of workers through divisions of unions in the workplace.

Quote:
UK Uncut has often worked to highlight that the existence of alternatives like tackling tax avoidance

That's still a very liberal solution and one, again, that's behind the militancy and tactics of UKUnCut itself.

Quote:
conversely, it implies that every hard fought pay rise by workers will inevitably reduce taxes

No it doesn't.

wojtek
Dec 9 2012 20:54
Quote:
murraygw wrote:
I also think the idea that forcing any company to pay corporation tax would automatically lead to reductions in workers pay and rights is quite lazily asserted, again without much thought.

How else is Starbucks going to stop running at a loss?

Phil
Dec 9 2012 23:21
murraygw wrote:
Progressive taxation can play a central role in limiting capital accumulation, preventing excessive accumulation of money power by capital. Over time the power of capital can be curbed, while the power of labour (through organising and taking effective action) can increase to drive social change. Progressive tax is more than just about trying to fund a welfare state to stave off revolution, it can also be a vital tool in challenging the power of corporations and capital.

This assumes a state - as it is the state who collects tax - willing to take on this role. Given that a key role of the state is to support and uphold the interests of capital, this is clearly not going to be the case. Also, we have had Cameron et al making noises about individual tax evasion being "immoral" - does this mean his government will fulfil the role you envision? Of course not. All you offer here is the "good capitalism" delusion.

murraygw wrote:
I also think the idea that forcing any company to pay corporation tax would automatically lead to reductions in workers pay and rights is quite lazily asserted, again without much thought. This should be a clear argument for the need to organise workers, not to never ask companies to give up their profits in case the bosses take this out on workers.

Erm, I made precisely this argument in the article...

murraygw wrote:
And conversely, it implies that every hard fought pay rise by workers will inevitably reduce taxes, and therefore slowly reduce the tax revenue for the state.

No it doesn't. It's far easier to reduce labour costs to offset tax bills than vice versa, and most companies do their utmost to reduce their tax bills in the first instance anyway.

murraygw wrote:
UK Uncut has always worked closely with trade unions, supported trade unions and, when possible, tried to assert the need for a wider push against austerity.

Yes, which I acknowledged when I made the point that those same unions have little to no base in the workforces of UK Uncut targets. This is in the article you're challenging.

murraygw wrote:
At the UK Uncut actions I've been to workers have not been forgotten or alienated - at many actions I've seen people putting effort to engage the staff in the issues, and explaining the links between them as workers and them as citizens who rely on public services and in work benefits.

I'm sure this has happened, just as I know the opposite - worker alienation - has happened.

murraygw wrote:
The idea that the 'official' message is far more liberal than that of the grassroots taking action also doesn't match my experience of UK Uncut at all. The phrase 'pay your tax' is only ever heard on actions, in shop occupations, by people taking action, while in press releases and in interviews, UK Uncut has often worked to highlight that the existence of alternatives like tackling tax avoidance shows that the cuts are a political choice - that they are ideological.

That is the liberal message I'm talking about though. Lots of liberals and the soft-left (not to mention Trots pandering to that same audience) talk of "ideological" cuts - but they mean Tory ideology, not capitalist ideology. The alternative posed is Keynesian - presuming that if only we closed the tax gap all would be well, implicitly conceding that the cuts are down to a lack of money on the state's behalf - and "pay your tax" actually an easy shorthand for that alternative when chanting.

murraygw wrote:
The idea that two years of shop occupations by a lose affiliation of activists could have reversed this is just not credible.

True, but I never argued this. Rather, I argued that whilst the "tax gap" serves as a useful illustration that the motive behind austerity isn't necessity, it's not useful as a political strategy. The point was never "why haven't UK Uncut ended austerity," but "why aren't we putting the energy behind these activities into direct action targeted where it can make a solid dent in austerity" - two quite different arguments, the former a strawman.

murraygw
Dec 10 2012 11:45

Thanks for replying Phil,

I think on the role of the state in taxation we are back to the age old question of whether the state, and the battle over the state, can be used in the struggle for radical social change. Personally, i think that the battle over the state is a battle between labour and capital, and that handing over the power of the state to capital only makes achieving social change harder. I see the battle over the state, together with the struggle to undermine and replace it, as two sides of the same struggle. I know many others don't (and I guess I'm really commenting on the wrong blog site trying to make that argument) I just think its a shame that this fundamental point was completely ignored in the article.

I'd be really interested in your thoughts on how UK Uncut could develop on what it has achieved, whether you think there is any scope for a tax / cuts themed protest group to develop a more nuanced message or tactics that moves beyond keynesianism or whether you think energies should instead only be put into worker and class based organising? Should UK Uncut only target stores where workers are unionised? Should UK Uncut be working with groups working to organise informal and precarious workers outside of the main trade unions? Do you think UK Uncut could move beyond 'the cuts aren't necessary' to using the progress it has made on this to argue that the cuts are rooted in a capitalist ideology?

Chilli Sauce
Dec 10 2012 21:27

I think that was a much more reasoned response and one that's more likely to move forward a conversation:

Quote:
handing over the power of the state to capital only makes achieving social change harder

Handing over? That implies an initial neutrality which has never existed. The state has always defended those at the top of the economic hierarchy. Under capitalism, the state is neccesary to create the markets and protect the private property which is neccesary for accumulation. The state's role has always been one of social control and, by that very logic, can't ever be on the side of the exploited.*

On the workers inside the shops, I don't think it neccesary to determine hard and fast rules. Rather, it's just about making an effort to develop a relationship. When SF does pickets against workfare I know we make an effort to go in beforehand and talk to the workers, explain why we're there, and how they can contact us if they have any problems at work. In the best scenarios, we've done Stuff Your Boss distros in the weeks leading up to the action, so that not only are we a familiar face, but workers know who's side were on.

* Which is not say it can't curb the most blatant excesses of the market or grant the concessions to the working class--but only does so either as a response to popular pressure or to ensure the smooth functioning of capitalism. Neither of these options, however, mean the state can be taken over for the good of the class. It's not a neutral entity; it's fundamentally on the side of capital.

wojtek
Dec 11 2012 18:04

Novara: Series 2, Episode 22 - Tax, Sclerotic Profit and after GFC - December 11th

Quote:
A weekly show discussing political theory, practice and aesthetics presented by Aaron Peters and James Butler. Today they discuss the issue of tax avoidance among some of the most recognizable companies on the UK high street and its relationship to profitability and poor working conditions.
wojtek
Jan 2 2013 20:23
Chilli Sauce
Jan 9 2013 20:31

Thought this might be of interest:

http://iww.org.uk/node/834

donnacha.delong
Feb 22 2013 18:31

Let's put the blame where it belongs, the lick-spittle Labour affiliated unions who organise shop workers. UK Uncut has been supported by many of the unafiliated TUCG unions - PCS and my own, the NUJ, for definite, but neither union organises people who work in shops. Whereas those who do - USDAW, in particular, but there are a couple more - have done feck all recruitment in years and, instead of joining UK Uncut demos and giving staff leaflets, just sniff and ask Milibland for the steam off his piss.

Chilli Sauce
Feb 22 2013 19:57
Quote:
UK Uncut has been supported by many of the unafiliated TUCG unions - PCS and my own, the NUJ, for definite, but neither union organises people who work in shops.

Ah, but I think there's something deeper going on here. In the workplaces where PCS organises, for example, they've been just as complicit in toeing the Labour party line. Militant rhetoric aside, they've squashed the appetite for action when it arises and put strikes on hold in order have rounds of fruitless negotiations.

I think it, again, it comes down to the mediating function unions play. If there's potential for disruption in a workplace where a particular union has recognition, it's imperative that the union be in control of that disruption, less their legitimacy and bargaining power be undermined. All of which is long way of saying, yeah, militant posturing is really easy for the trade unions when they're shouting from the sidelines. I just don't think it means much in practice.

Chilli Sauce
Feb 23 2013 17:29

Insider info on PCS here:

Quote:
As a member of PCS, I'll be the first to argue that it is far from a militant union. I've detailed before its role in selling out disputes, as well as how reductive it has been in “leading from the front” as far as the coordinated action over pensions was concerned.
Spikymike
Feb 23 2013 19:02

Personally I think campaigns around the issue of taxation are at best of limited value and can often be simply a diversion from class struggle.. Whilst some changes to particular tax regimes may affect different groups of workers to their advantage or disadvantage in the short term it is primarily an issue for the state and different factions of the capitalist class as to how they finance their state.

There are two older threads discussing this if you search here for:

'Taxes' and 'What taxes in the Unites States do you consider regressive'

and the short library text: 'Down with Poll Tax, Down with All Taxes!'