November 14, 2012

UK politicians slam Amazon


Margaret Hodge

Tolerance of Amazon UK’s tax evasion seems to be decreasing in parliament, though there’s still no sign of the robust legislative kick in the coffers that’s really required.

On Tuesday the Public Accounts Committee — a select committee of ministers from the House of Commons — questioned Amazon alongside Google and Starbucks about its paltry tax contributions, and those fat cats were not given an easy ride.

As readers of MobyLives will know, Amazon wriggles out of paying corporation tax in the UK and other European countries by channeling its European business through a Luxembourg-based parent company, meaning that though it earns an estimated £9bn annually in the region, about half of which in UK sales, last year it paid only £1.8m in UK taxes.

According to The Bookseller the Labour MP Margaret Hodge, chair of the committee, returned time and again to the unfair advantage Amazon gains over local booksellers thanks to its tax fiddling. Here’s one exchange:

When Amazon’s [director of public policy Andrew] Cecil tried to boast of the other taxes that his company pays, such as business rates, Hodge jumped on him.  “Let me kill this argument because it really makes me cross . . . So does every other business. The community-based bookshop that you’re putting out of business also pays business rates, also pays its PAYE . . . And you’re making it uncompetitive.”

At another point Hodge told Cecil, “You depend on the services that come out of the tax you pay, the ability to get your goods around on the roads . . . you’re not putting enough tax into our economy.” And after Cecil refused to disclose the proportion of Amazon’s European sales that were made in the UK, and claimed not to know who owned the holding company that owns the Luxembourg-based Amazon EU S.a.r.L., an infuriated Hodge told Cecil that she would request to speak to another Amazon representative who was capable of answering her questions.

By all accounts Cecil took Amazon’s habitual line of defense: that its goal is customer satisfaction. Here he is attempting to slime his way out of Hodge’s line of fire:

I’d like to refute that we’re putting booksellers out of business. What we’re seeing is that the internet retail industry is bringing huge benefits to consumers across Europe in terms of price, in terms of selection, in terms of convenience, and we are very much focused on continuing to invest to make sure consumers can benefit from internet retail.

The response to this particular non sequitur has yet to be reported, but Hodge could have done worse than asking Cecil whether Amazon’s number one priority was customer satisfaction when, say, it removed the buy buttons from thousands of ebooks earlier this year. Or indeed whether he understood that every consumer is first a citizen of a country trying to navigate its way out of a grave financial crisis, and that the small cost benefits provided — when they so wish — by bullying monopolies in no way compare to the necessary public services afforded by proper taxation.


Ellie Robins is an editor at Melville House. Previously, she was managing editor of Hesperus Press.