Academic journal article New Formations

Tax Justice in Austerity: Logics, Residues and Attachments

Academic journal article New Formations

Tax Justice in Austerity: Logics, Residues and Attachments

Article excerpt

INTRODUCTION: WAKING UP TO TAX AVOIDANCE

In April 2014, a tweet composed by coffee-drinker and poet Steve Pottinger received signifi cant attention in the UK news media.1 Pottinger used the tweet to publicise a letter he had written to Caffè Nero in which he explained that he was no longer going to buy their coffee. Noting that the chain had posted a pre-tax profi t of £21.1 million in the year to May 2013, Pottinger complained that Caffè Nero had nonetheless 'managed to pay no corporation tax whatsoever on the operations of [their] 560+ coffee shops in the UK'. 'At a time of austerity', Pottinger went on to explain, 'when vital services face cutbacks', the company's avoidance of tax 'sticks in the craw'.2

Pottinger is just one among many social actors in the UK who have become engaged with the issue of 'tax justice' in the wake of the 2007-08 global fi nancial crisis. His intervention can be situated in a context in which tax has 'shot up the political agenda',3 leading commentators to remark on its 'sudden thematisation'4 and to identify 'the awakening of society to an epidemic of global tax dodging by the world's elites' as the 'story of our time'.5 The note of surprise in these appraisals of the current prominence of debate about tax originates from a longstanding recognition of the diffi culty of engaging wider publics with this theme. The issue of tax avoidance is thought to have 'high technical complexity' and to lack 'moral or emotional content',6 yet in recent years it has clearly achieved both lucidity and a distinct moral quality.7 As a number of commentators have explored, this new intelligibility owes much to the context of 'austerity'. The UK Labour government's interventions in the banking sector in 2008 and 2009 are said to have fuelled citizen-taxpayers' 'moral indignation' about corporate tax avoidance,8 a mood compounded by the spending cuts initiated in 2010 by the Conservative-Liberal Democrat coalition government and the rationalisation of the need for those cuts in terms of defi cit reduction.

Despite the fact that the UK is widely seen to have played a critical role in the creation and development of global tax havens,9 many constituencies across the political spectrum in the UK today appear to concur with the demands of the tax justice movement. Under Ed Miliband, ideas about the immorality of tax avoidance were central to the Labour Party's amplifi cation of 'responsible capitalism',10 and in 2015 the party promised to implement specifi c anti-avoidance measures if they were returned to power.11 Jeremy Corbyn's election to the leadership of the party in September 2015 has strengthened Labour's position on tax justice; his provisional economic plan - rapidly dubbed 'Corbynomics' - was drafted by leading tax researcher Richard Murphy.12 While there are many free market thinkers on the political right who insist that a legislative light touch is necessary in order to protect the UK's competitiveness, under David Cameron's leadership the Conservative Party has tended to adopt rather than to challenge tax justice discourse. 13 The coalition government pursued a range of policy initiatives supposedly intended to combat tax avoidance, including the promotion of a global tax reform agenda and the introduction of a 'diverted profi ts tax' (or 'Google tax'), aimed at corporations who divert profi ts from the UK by avoiding a UK taxable presence.14 Chancellor George Osborne's description in 2012 of aggressive tax avoidance as 'morally repugnant' was widely reported, and his party's 2015 election manifesto promised that over the next two years they would 'raise at least £5 billion from continuing to tackle tax evasion, and aggressive tax avoidance and tax planning'. 15

Tax justice was a prominent theme in the 2015 UK election campaign, in part due to a BBC investigation into the role of banking multinational HSBC in the tax-avoiding practices of its wealthy clients.16 In the media debate that ensued, representatives of all the political parties competed to appear more 'tough' on tax avoidance than their political opponents. …

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