Justin King, CEO of the UK supermarket Sainsbury's, was interviewed on Channel 4 News last evening. What was notable about his comments was his blistering attack on tax avoidance. The interview is here; (I can't embed it for some reason).
I'm also grateful to Nick Shaxson for the transcript, below which has has on his blog. I include his comments:
First, the context. Sainsbury's is huge in the UK, but it's a domestic company, not a multinational.
“We are entirely domestic, we pay our tax in the UK; I think by the last count we were the 12th biggest taxpayer in the UK and we are proud of our taxpaying record.”
Good for them. I haven't checked the numbers, but I'll take his word for it.
Corporation tax for international corporations is an elective tax. they can choose quite legally to organise their affairs and choose to pay tax pretty much wherever they wish.
Indeed. More interestingly, though:
“I think it now for consumers to ask tough questions of the businesses where they take their custom about where they choose to pay their corporation tax. Corporation tax is a way in which we invest back in the community and the country of which we are part. I think that companies that wish to trade here, enjoy the benefits of our consumers and of the investments in our infrastructure, our safety and so on, should answer themselves about whether they are contributing properly to our society.”
Quite right. And my colleagues at the Tax Justice Network, responding to request from campaigners, are putting together something just like this, for the long haul. But now something else very interesting.
“The consumer are more powerful than governments in this. The vote that you make with your wallet will move the decision making of corporations much quicker than governments will ever be able to do.”
And King has a challenge to corporations to be transparent.
“If companies believe what they do is moral, they should be very happy to lay bare what they are doing, and open it to consumer scrutiny, and we are quite happy to do that, not just on the issue of tax . . . . companies should open themselves up and be counted on the things that they stand for. And of course if they really believe what they are doing is in the interests of their consumers, they shouldn't have any difficulty in answering those questions, should they?
Quite so. The mood in the UK has really changed dramatically on tax avoidance.
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Interesting comments from him. Consumers should be asking these questions and supporting companies which are not abusing tax laws. Corporation tax should be part of CSR which I think you have advocated.
interesting that he seems to only be considering corp tax..what about VAT
Not sure we should be sanctifying supermarkets
I seem to remember hearing him on the Today programme a few weeks ago saying some of the same, Richard. That was at the time the CEO of John Lewis also spoke out, as has the person behind Greggs. But the interview on C4 News was impressive, I have to say, as it took the debate further and. I have no doubt that Sainsbury’s also see a marketing opportunity in this. For example, leaving the usual US suspects aside, don’t I recall from various articles in Private Eye over several years that Tesco is a quite ‘creative’ with their tax arrangments?
Ultimately what would be very effective now is if those companies that align with the Sainsburys/John Lewis view of taxation formed an alliance rather than simply speaking out individually. That would really put the cat amongst the feral pigeons.
The problem with “consumer power” is lack of information. With the best will in the world it is extremely difficult to find out who makes the stuff which are branded to mimic diversity; and who owns the outlets which appear to be independent.
http://thosebigwords.forumcommunity.net/?t=49187012&p=372396018
Don’t get me wrong: I do endorse the idea that the public should act when they can: but information is dependent very largely on what the media decide to convey. They are not to be relied upon and to me only government can take effective action on that front: for they are the people who know who pays what. I see no reason at all why that information is allowed to be kept secret and I think it better if all tax returns etc are made public. I believe that individual tax returns are open for scrutiny in some parts of Scandinavia, and the sky does not fall. Corporate accounts are available, but it is not easy to find them and, for most, not easy to understand them. I do not know if they have to disclose their relationships with other companies under the same ultimate ownership: but I do know that when investigating the ownership of Southern Cross the BBC journalists had a hard time for the trail ran out when it went offshore: I had to turn to the GMB for better information about that.
I see no reason why all products and outlets should not be required to put their ultimate ownership in a prominent place on the packaging or on the wall: at least we would have a chance if that were enforced. I see no reason why interrelationships and subsidiary status etc should not have to be published in an easily digestible form on one central website provided by government. If we are to rely on consumers they must be informed: currently they are deceived. Cui bono?
Agreed
I’m working on it – but the issue is mighty complicated
I believe you. That is why I think the government should do it: they have the resource and the power to require that companies do the work. You have enough on your plate, it seems to me
In my mid 50s I have learned what it is to work to my limits
This task should be within them
King also advocated a ‘flat’ corporation tax of 20% in the interview… That said, the language of UK business is changing if only for the sake of good PR, which is still an achievement; we seem to be seeing dividing lines drawn.
Strange he should be saying this so publically – I find it confusing as Action Aid have done some work on this and produced a FTSE100 list of companies that have subsideries offshore and J Sainsbury is amongst them. I found the link to the Action Aid list on this site.
You are right…