Opinion

A taxing question: How to balance the books and take on the big boys

Rishi Sunak has his work cut out. He only has to look across the Channel for inspiration on how to take on the big boys.

08/07/2020. London, United Kingdom. Chancellor Rishi Sunak leaves 10 Downing Street to go to the House of Commons to make the Summer Budget Statement. Picture by Pippa Fowles / No 10 Downing Street.

There’s a hospital in Moscow that has a curious way of helping people recover from Covid.

The hospital is an equivalent to Britain’s Nightingale Hospitals – a requisitioned site serving only coronavirus patients. This particular one in Moscow had been an ice hockey arena. There is a big scoreboard above the main area. So, to entertain those in bed, the authorities decided to broadcast two types of things on the scoreboard. They are showing classic Russian movies. And Mr Bean episodes.

The global reach of Mr Bean never fails to surprise. And while it’s not something that I’ve heard being prescribed by the NHS, perhaps it shouldn’t be ruled out. The screenings show that elsewhere there’s always somebody trying to come up with a solution to a shared problem. Obviously Mr Bean is not exactly the Pfizer vaccine, but still.

Closer to home, the French are also being inventive. Last week they postponed Black Friday. The authorities secured agreement from global online shopping giants like Amazon to suspend their Black Friday offers for a week. This was a calculated move to allow smaller retailers to have a fighting chance to sell their wares during lockdown. On this side of the Channel it is clear that independents on the high street are fighting for their lives. Wouldn’t they have benefitted from a similar move? Or are the authorities here too scared to take on the online titans?

France isn’t. They’re now also going to up the taxes on global tech giants who’ve profited during the lockdown. Many of them are American, and the US has threatened reciprocal action on French imports. It’s not stopping the French, though. Perhaps they see that the sabre-rattling of Donald Trump is now a death rattle. And that a more placatory and mutually beneficial relationship could be on the way.

Or maybe they see that they need to get money in to help mitigate the hammering that their economy, like many national economies, has taken.

Whether it’s spoken openly or not, taxes are going to have to go up. Following this logic, surely the first people to look to are major organisations who coin it in but don’t pay a lot in tax

It is curious that this hasn’t been at least broached by the Chancellor. It was clear in his Spending Review how desperate the economic situation is in which we find ourselves. This government is keen to say that there will be no return to austerity. That is clearly good. However, logic says that if there are no cuts then income to the exchequer will have to rise. And whether it’s spoken openly or not, taxes are going to have to go up.

Following this logic, surely the first people to look to are major organisations who coin it in but don’t pay a lot in tax. Earlier this year we learned that Amazon made £13.7bn in sales in 2019 but paid only £293m in tax. There is space to do something between those figures!

Rishi Sunak has his work cut out. He is trying to rebuild an economy that has had a shock unlike anything for a century. So maybe he’s going to get around to the tax business in a little while. He only has to look across the Channel for inspiration on how to take on the big boys. Perhaps he could even work in concert with the French so both serve their nation’s citizens better.

Good job there is nothing coming along soon that could jeopardise such a move.

Paul McNamee is editor of The Big Issue. He is on Twitter @pauldmcnamee.

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