I wish this post was about something juicy and raunchy, but, alas, it is about something very unsavoury and that is the way in which we are slowly stripping away our economy. They’re not taking the shirt off our backs, we are literally stripping off for them, clouded, deluded and blinded by gorgeous layouts, next day service and free delivery.
Any why not? What is so wrong in giving in to the company that has made ‘Prime’ an uncontestable market force? They’ve made free, next day delivery the next best thing since sliced bread, especially for those of us who live half an hour away from the nearest large shop.
Is it our fault when we have been taught from a very early age to be money-conscious? ‘Go for the best deal’ is almost ingrained. I was brought up in an era when Saturday shopping was the highlight of the week and market day meant deal-day. But I was also brought up to buy British, keep the economy turning, stop money flowing overseas and support our nation’s workforce.
No longer. Now, it is about convenience and speed and now, no, now! Everything is online and geared to make our lives as hassle-free s possible. But there is a cost and it is a huge, ticking time-bomb that we are unwittingly nourishing.
Shopping online is not, in itself, a problem. My issue is with taxation and subsidies and the unfairness of penalising local businesses in favour of conglomerates who tread them into the ground. Please, invite a shark into your home to nibble on your children and insist the children give up their beds and toys to the sharks. You won’t?
Now, we have all heard the terrible news that Amazon and Google and Starbucks, et al do not pay full UK tax. They have managed to avoid this by putting the corporate company overseas and using the overseas tax breaks that come with it.
We are assured by HM C&E and Tax and Revenue that the amount these companies are not paying is but a small drip in a much larger bucket, but what they don’t seem to understand is that the drip is poisonous. It is slowly eroding the plastic and before we know it, the bucket will have disintegrated and we will be left high and dry. Can you imagine it? We will end up borrowing from the coffers that we helped fill.
I’m not being paranoid. It is simple economics and here is why.
Company A buys from company B and sells to us, the consumers, C. At each sell point, we pay tax and the government gains, the money going into infrastructure, school, hospitals, etc. Money revolves within our economy.
However, we have several issues.
One: Company A in this case, with the might of sales power, has screwed company B to the narrowest margin – let’s say 35% rather than the normal 50%. Well, that’s a little less going into the government’s coffers, it is also less to support the company and its workers.
Company A then sells to C, including the 20% VAT. Great. That’s 20% C has paid to keep the nation floating. Not so, because company A has used its loophole and only pays the government 3% tax. 17% goes straight into company A’s pockets. Okay, well, a lot of overseas companies do that, that’s their incentive and if it was that big an issue the government would do something to halt it; so what? I don’t know about you, but I resent that I just paid 20% tax – or what I was told was tax – but in actuality the UK government only sees 3%. How would you feel if you gave a friend a fiver to buy your kid lunch and they only spend £1.50 and pocketed the rest? This is out and out lying, cheating and stealing. I don’t care what agreement the company has with the government, if you take 20% tax then pay it!
Two: companies like these are given big tax breaks to open new markets in the UK – such as tax-free sales for the first 5 years. What? Okay, I appreciate we have to attract new business and this is a thing, but 5 years? UK companies are given zero tax breaks for starting up and they have to compete with big conglomerates hustling in on their patch, with a golden handshake from our own government, to do so.
Three: You must have heard recently that high street shops are going to have big tax rises. This will be passed on to the consumer, C. They have no choice, how else will they raise the money? Now, they are competing against golden handshake company A who is sitting-pretty abroad with their additional 17% margin and can afford to absorb this tax hike for a year or so (maybe more), exactly the amount of time it takes C to think, ‘I can’t afford to go there. Let’s go to A instead.’ The local shop closes because its customers have walked, A has all the custom and can now raise its prices safe in the knowledge that it has no competitors. And it is pocketing a bigger value of the 17% you think you’re passing on to the government.
Four: We are snowballing our economy into the ground. Company A’s greed and tax avoidance means the money is not going back into the UK economy. It is not going to build roads and school and hospitals, it is not going into UK banks, it is not being spent in the UK to be recycled – remember the burning of Welsh houses? DON’T burn anything! I’m just trying to remind you what a devastation it was when money was removed from the local economy.
In addition to all this, Company A is not regulated. It has poor staff policies – zero contract hours? Points system? Penalties for time off? It is subsidised by the government to ensure it does not close its doors and put workers out of jobs, when in reality it is the reason so many smaller businesses closed in the first place. We are, literally, paying them to destroy us and doing it with a smile. Does it remind you of an abusive relationship?
So, what do we do? I’m not proposing you boycott the big conglomerates – why should you? Competition is rife and money is tight and we all lead exceedingly, increasingly busy lives. However, it is a first step. Get back to taking that long walk round the shopping centre with your friends and pop into a local cafe – it gets you out of the house, socialising in the old fashioned-way and brings money back into the local economy.
What we can do is petition the government to make business fair and make tax payments more transparent. If I’m paying 20% tax on item, I want the money to go where I am being told it is going!
Petition the government to remove the destructive ‘points’ system and zero contract hours.
Petition the government to stop Amazon strong-arming publishers and music companies to give them bigger and better deals over and above smaller outlets (I have heard some horrible rumours regarding this, but they are rumours; however, when I can’t get Waterstones to tell me outright why they aren’t even allowed to advertise a forthcoming book that is already available for pre-sale on Amazon, one starts to wonder).
Petition the government to stop giving massive corporate tax incentives that undermine our own companies, which in turn shaves away at our economy.
There are no easy answers, but there are small steps we can take to bar the sharks from our own homes.