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No, McDonald’s move to the UK won’t create jobs. It’ll just let them avoid even more tax.


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The multi-billion pound fast-food chain McDonald’s has announced plans to move its international base to the UK, raising questions over whether or not the UK is fast becoming a tax haven for big business.

Previously, McDonald’s non-US division had to be stationed in Luxembourg, where it was able to get “sweetheart tax deals” in return for jobs and investment.

But now, multinational corporations seeking to lower, or even extinguish, their tax revenue, can come to the UK. This is because of the astonishingly low rate of corporation tax, and the government’s appalling track-record in policing corporate tax avoidance.

The rate of corporation tax in the UK is 20%, and the Tories plan to lower it to 17% by 2020. This would make the corporate tax in the UK the lowest in the world’s top twenty (G20) economies.

But because of legal loopholes, it is likely that McDonald’s won’t be paying any tax at all. Since Britain relaxed its rules on the taxation of companies’ foreign subsidiaries in 2012, profits earned by the overseas arm of US-registered companies are, effectively, not required to pay UK tax.

A report for Reuters News also states that it is unlikely that the move would create any significant number of jobs. Indeed, McDonald’s current office in Luxembourg employees about thirteen people.

But things have not always been this way. In 1978, the rate of corporate tax was set at 42%.

Then came the advance of neoliberal economics, of which Margaret Thatcher and Ronald Reagan were key political exponents. This began a long progress of rolling back all the gains made by the working class since the Second World War.

Labour, for their part, did nothing to buck this trend. Under Tony Blair, Labour continued to offer “incentives” for big business, whilst simultaneously punishing the poor for the crime of being poor.

Little wonder then that New Labour lost over three-million voters, and the Blairites have recently been trounced in two leadership elections.

In Europe alone, it is estimated that McDonald’s has avoided paying over €1 billion in corporate taxes between 2009-2013. This is far from being an isolated case.

According to a report by the Public and Commercial Services Union, an estimated £120 billion a year is lost through corporate tax avoidance. This money would easily plug the hole in the NHS, solve the housing crisis, and make austerity a thing of the past.

But as they have made abundantly clear with their policies, the government is not interested in the wellbeing of the working class, but only in lining the pockets of the super rich.

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