BORIS Johnson has said that multinational firms like Starbucks, who have not paid much UK corporation tax in recent years, need to do more for UK society or change their tax arrangements.
Speaking to City A.M. ahead of his speech at the Confederation of British Industry’s (CBI) annual conference today, the Mayor of London said: “Starbucks has got a choice to make. Although it has a duty to shareholders there is growing public unease that it can effectively escape tax obligations in a way that its high street competitors cannot because of its status as a global corporation.
“It needs to reflect very fast and very seriously on its position…Either it makes a change in its tax arrangements or does a lot more to visibly serve society.”
Also in his speech the Mayor will today pledge to fight against more bank regulation and higher taxes, while calling for Londoners to take part in a new “age of enterprise”.
He said the country must “be positive and stop talking the language of austerity”. “The time for hair-shirtism, vegetarianism and belt-tightening is past its sell-by date,” he added.
Instead Johnson wants to combat the global threats to London’s position as an “economic powerhouse”, such as additional bureaucracy for City firms: “We can’t solve these challenges by heaping on more regulation. We shouldn’t be out of step with competitive jurisdictions, forcing banks to compete with one hand tied behind their back and shoot ourselves in the foot.”
Part of this plan will involve reducing personal tax rates, in contrast to the French government’s “completely crackers” decision to hit high earners hard.
“If Andy Murray had won Wimbledon he still would have paid more in tax than any of the other last 16 competitors. Taxation has got to be lowered, it’s got to be fair.”
Despite last week’s report showing the number of Londoners working in financial services has fallen by a third in the last five years, the Mayor remains optimistic that other industries can take up the slack: “Don’t forget that the figures pointed out huge potential for growth in other industries. Two hundred years ago London was globally dominant in shipmaking and saddlemaking. Things move on and Londoners will always exploit whatever provides the most value added.”
As part of this it should be easier for firms to recruit new staff from abroad: “We’re losing Chinese tourists to Paris because of the visa restrictions and we’re losing potential Indian students to London universities. It’s absurd that we should be forfeiting those potential markets. I’m implacably opposed to illegal immigration but we need to allow talent into London.”