Coca Cola decides to pay their Olympic taxes

Coca Cola takes a lead from McDonald's.

Internet petitions have, for once, proved effective, as Olympic sponsor Coca Cola have joined McDonald's in announcing they will not be partaking in their allowed tax break during the Games. Since HMRC pronounced Stratford the latest haven in tax dodging, the internet has exploded with complaints that corporations sponsoring London 2012 such as Lloyds TSB, Visa and Adidas should not partake in the tax exemption they are offered. The legislation not only forgives sponsors from paying tax on the fortunes they will earn during the Games, but also any foreign nationals working in the UK for the purpose; this includes journalists, judges and the athletes themselves. While the amounts the individuals will rake in from three weeks of income and UK corporation tax concessions may not be huge, it will cost the UK tens of millions of pounds to lose, as estimated by Richard Murphy from the Tax Justice Network.

The petition was started on the 38 Degrees website and has now over 160 000 signatures. On Wednesday McDonald's bowed to furious online petitioners, saying that the revenue from the games would only make up 0.1 per cent of annual sales in the UK. Hours later, Coca Cola also conceded and made a statement on their website to pay their fair share of tax during the Games. Perhaps this is the first of many escape routes from the somewhat Orwellian laws of copyright the Olympics have influenced in this country. I refer to the legislation that vendors within 100 metres of Olympic venues are forbidden from violating sponsorship agreements, by which I mean selling chips. Except in the joyful loophole that fish with chips is allowed, selling chips alone which are not McDonald's branded will result in a hefty fine. Likewise with soft drinks other than Coca Cola and beer other than Heineken. Considering this it is less surprising that McDonald's and Coca Cola don't mind paying their taxes as it will hardly compromise the billions of pounds they will be earning. However, the decision to ignore the tax exemption still shows the corporations in a good light, and until the other sponsors back down the petition at 38 Degrees will continue to go strong to break them, or die in the attempt.

To the taxpayer the decision to pay the usual requirement of taxes seems only fair; the UK has already been proven to be riddled with tax evaders, with the Barclays scandal still hanging stagnant in the air along with dozens of other bankers' tax avoidance accusations. However, tax exemption is far from unknown in the Olympic world; in fact, such legislations have long since been endemic to the Games for years. Usain Bolt is just one of the big-name athletes who has pushed tax exemption rules to be adopted by hosting countries. So is tax just seen as something optional to be dropped when it comes to big publicity situations? No, it's worse than that; “tax” has become a poisonous word that evokes feelings of horror and misery the moment it's spat off the tongue. In a world where dropping tax is seen as a reward (though why big names should be rewarded for having logos on the side of the stadium needs further explanation) and paying tax is a punishment, how can we expect so much of large corporations? We seem to be forgetting the purpose of tax: to help people who can't help themselves, and provide the public with those mildly useful luxuries we occasionally need, such as hospitals and schools. Sometimes our tax isn't used very wisely by the government, no. But shockingly enough, it is a democracy that we live in, and we can use our power to vote or to sign petitions online towards the hope that whoever is in charge will make a loose majority of decent choices. Organisations like the Olympics promote the idea that only the losers pay tax and the winners, be they competing athletes or corporations that get brownie points for monopolising industries, are lucky enough to get out of helping their country function. As long as we keep this mentality it's inevitable that McDonald's and Coca Cola deciding to pay tax will be something of a shock to us. Thankfully, the fact that they have done so can contribute to a new mentality. It might even promote the aim to do good over earn money. One can only hope.

Olympic sponsor Coca Cola presents the torch relay in Glasgow. Photograph: Getty Images
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Brexit will hike energy prices - progressive campaigners should seize the opportunity

Winter is Coming. 

Friday 24th June 2016 was a beautiful day. Blue sky and highs of 22 degrees greeted Londoners as they awoke to the news that Britain had voted to leave the EU.  

Yet the sunny weather was at odds with the mood of the capital, which was largely in favour of Remain. And even more so with the prospect of an expensive, uncertain and potentially dirty energy future. 

For not only are prominent members of the Leave leadership well known climate sceptics - with Boris Johnson playing down human impact upon the weather, Nigel Farage admitting he doesn’t “have a clue” about global warming, and Owen Paterson advocating scrapping the Climate Change Act altogether - but Brexit looks set to harm more than just our plans to reduce emissions.

Far from delivering the Leave campaign’s promise of a cheaper and more secure energy supply, it is likely that the referendum’s outcome will cause bills to rise and investment in new infrastructure to delay -  regardless of whether or not we opt to stay within Europe’s internal energy market.

Here’s why: 

1. Rising cost of imports

With the UK importing around 50% of our gas supply, any fall in the value of sterling are likely to push up the wholesale price of fuel and drive up charges - offsetting Boris Johnson’s promise to remove VAT on energy bills.

2. Less funding for energy development

Pulling out of the EU will also require us to give up valuable funding. According to a Chatham House report, not only was the UK set to receive €1.9bn for climate change adaptation and risk prevention, but €1.6bn had also been earmarked to support the transition to a low carbon economy.

3.  Investment uncertainty & capital flight

EU countries currently account for over half of all foreign direct investment in UK energy infrastructure. And while the chairman of EDF energy, the French state giant that is building the planned nuclear plant at Hinkley Point, has said Brexit would have “no impact” on the project’s future, Angus Brendan MacNeil, chair of the energy and climate select committee, believes last week’s vote undermines all such certainty; “anything could happen”, he says.

4. Compromised security

According to a report by the Institute for European Environmental Policy (the IEEP), an independent UK stands less chance of securing favourable bilateral deals with non-EU countries. A situation that carries particular weight with regard to Russia, from whom the UK receives 16% of its energy imports.

5. A divided energy supply

Brexiteers have argued that leaving the EU will strengthen our indigenous energy sources. And is a belief supported by some industry officials: “leaving the EU could ultimately signal a more prosperous future for the UK North Sea”, said Peter Searle of Airswift, the global energy workforce provider, last Friday.

However, not only is North Sea oil and gas already a mature energy arena, but the renewed prospect of Scottish independence could yet throw the above optimism into free fall, with Scotland expected to secure the lion’s share of UK offshore reserves. On top of this, the prospect for protecting the UK’s nascent renewable industry is also looking rocky. “Dreadful” was the word Natalie Bennett used to describe the Conservative’s current record on green policy, while a special government audit committee agreed that UK environment policy was likely to be better off within the EU than without.

The Brexiteer’s promise to deliver, in Andrea Leadsom’s words, the “freedom to keep bills down”, thus looks likely to inflict financial pain on those least able to pay. And consumers could start to feel the effects by the Autumn, when the cold weather closes in and the Conservatives, perhaps appropriately, plan to begin Brexit negotiations in earnest.

Those pressing for full withdrawal from EU ties and trade, may write off price hikes as short term pain for long term gain. While those wishing to protect our place within EU markets may seize on them, as they did during referendum campaign, as an argument to maintain the status quo. Conservative secretary of state for energy and climate change, Amber Rudd, has already warned that leaving the internal energy market could cause energy costs “to rocket by at least half a billion pounds a year”.

But progressive forces might be able to use arguments on energy to do even more than this - to set out the case for an approach to energy policy in which economics is not automatically set against ideals.

Technological innovation could help. HSBC has predicted that plans for additional interconnectors to the continent and Ireland could lower the wholesale market price for baseload electricity by as much as 7% - a physical example of just how linked our international interests are. 

Closer to home, projects that prioritise reducing emission through tackling energy poverty -  from energy efficiency schemes to campaigns for publicly owned energy companies - may provide a means of helping heal the some of the deeper divides that the referendum campaign has exposed.

If the failure of Remain shows anything, it’s that economic arguments alone will not always win the day and that a sense of justice – or injustice – is still equally powerful. Luckily, if played right, the debate over energy and the environment might yet be able to win on both.

 

India Bourke is the New Statesman's editorial assistant.