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Christine Jardine: A coffee with sweeter taste

Customers learnt that Starbucks paid no corporation tax in the UK

Customers learnt that Starbucks paid no corporation tax in the UK

THE tax scandal surrounding Starbucks has highlighted just how much the local, independent coffee shop does for the community, writes Christine Jardine.

I probably drink far too much coffee. I always have. At university my friends called me the “coffee-break kid”. And not a lot has changed since then.

As a new mother, I revelled in a fresh excuse to spend hours over coffees with other first-time mums, then with friends I met at the school gate and now with those same, if slightly older, mothers commiserating about having young adults to deal with.

Originally, we always met in our local coffee shop.

I got to know the owner, and her continental chocolate cake recipe, and she persuaded my toddler daughter that the best way to cool lentil soup was with an ice cube.

But then, like much of the country, I was seduced by the big coffee house chains with promises of flavoured coffees, gingerbread lattes at Christmas and frappuccinos in the summer.

I willingly queued for what seemed like hours before happily paying a small fortune for what can only be described as a bucket of coffee.

Even when I was getting the train to work, a barrista stand was the last stop before I got on and first when I got off.

Until, that is, I heard about Starbucks’ tax arrangements last month.

The news that its European headquarters had come to a special deal with the Dutch government to pay only royalties on the company’s UK profits wiped all the froth off my cappuccino.

The arrangement meant that Starbucks – which sold nearly £400 million worth of goods in this country last year – paid no corporation tax at all.

And they weren’t the only disappointment. Suddenly Google and Amazon also found themselves in the dock accused of not paying their fair share of UK tax.

This week, the Westminster committee which heard the evidence of these three global giants has described the attitude of companies which pay little or no tax in the UK as “an insult”.

The boycotting and petitioning of Starbucks by the coffee-drinking public launched in response wasn’t long in hitting the multi-national where it really hurts. In the pocket. Although Starbucks is already sitting down with HM Revenue and Customs to discuss how to put things right, in some ways it may be too late.

On hearing how little of my hard-earned cash it was passing on to the treasury, I resorted to my default consolation – a coffee.

This time, however, I went back to my local, independent, establishment.

As I sat there enjoying my Americano, eyeing up the chocolate cake and cinnamon swirls, I began to think about the value that the entrepreneur behind the counter had brought to my community.

For almost two decades the same owner had supported local suppliers, given youngsters their first step on the employment ladder and even provided an outlet for the community’s artist to sell her landscape paintings.

I doubt if the profits of this one shop stretch to the sort of international tax specialist who would have found her a haven offshore. But the most important thing she has done over the years is create something unique for our village and the character of its Main Street.

I’m old enough to remember when shopping in each of Scotland’s cities was a unique experience. You could go for a day out and enjoy seeing what the different stores had to offer.

Glasgow had Frasers, Goldbergs and Lewis’s.Edinburgh had Jenners and Aberdeen had Esslemont and Macintosh (better known to the cogniscenti of a certain generation as E&M).

In the days before huge out-of-town developments and internet shopping they helped create the individual characters we loved about our own city.

Instead of multi-national chains selling the same clothes or white goods at the same prices, often even with the same sale reductions in every store in every city, we had independent, often family-run businesses, which were also a focal point of the community.

In the summer of 2011, I watched, like many people, the news footage of a furniture store in a London suburb being burnt to the ground in the riots that spread across the capital.

It reminded me of so many other outlets across the country that have disappeared in recent years unable to compete with the big boys of the international retail chains. Of course, we can never go back to the days when our town and city centres were filled with local names.

But as Liberal Democrat Treasury chief secretary Danny Alexander and his staff pursue their campaign against tax evasion, it’s interesting to ponder what a new, more level, playing field might do for our independent businesses.

I know that is not the main aim of their campaign. That is about making sure every business that operates in the UK pays it’s fair share of tax to the exchequer. But could it be an interesting, and hugely beneficial side effect?

Could the pressure on Amazon – which has its European headquarters in Luxembourg – to follow Starbucks into HMRC offices to talk about its own tax arrangements pay off for smaller retailers finding it tough to compete with the online behemoth?

I’m not knocking Starbucks or Amazon – other than over their tax bill. There is an important place for them in the market if they sort themselves out. No-one could argue that they do not offer employment opportunities for thousands at a crucial time for our economy.

But maybe the lesson of this controversy is not just about tax. It’s about seeing beyond the international packaging. Looking at what we have around us and valuing it for more than its gloss.

Perhaps we should be taking more account of the less well-known entrepreneurs around us who make their own valuable contribution to our community.

I was in my local coffee shop at the weekend. Originally it was my conscience that encouraged me back but now its more than that. I’m enjoying being back amongst real people, from a real community and drinking real coffee. I don’t think I’ll be going away again in a hurry.

• Christine Jardine is a former Liberal Democrat special adviser.

 

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