Why multinationals love the EU ... and spread so much fear about Brexit

[millyonth]

I read this article this morning by Graham Stringer MP. I thought I would put it here just to add a Leaver's perspective to these Remain-dominated boards. I have a small business and I agree with everything he says. It's worth noting that small businesses employ more people in the UK than the multinationals do - but the multinationals' voices are much louder - especially in parliamentary lobbies. Their voices are behind all the Brexit fear and doom-mongering which is so prevalent on MN - and gets in the way of planning a positive future for the UK.

This is how Stringer's article starts ...
"If you found yourself in conversation with a top executive from the tax-shy American multinational Amazon what do you think you would say? My guess is that most people would start with something like: “Why don’t you stop avoiding our taxes and pay your fair share, you scabrous fat cat?!” Taking this obvious line did not seem to occur to the man responsible for raising taxes, Chancellor Philip Hammond. Instead, in conversation with Amazon Vice President Doug Gurr and other top executives of multinationals, he chose to explain how he would thwart both the decisions of the House of Commons and the electorate on Brexit. No talk of Amazon tax but commitments given to conspire against the electorate and Parliament. This gives us a useful insight: that multinationals want to keep the EU just as it is ..."

brexitcentral.com/political-establishments-sense-entitlement-overtaken-sense-democracy/

And before you point out that the EU sometimes raps Amazon on the knuckles with a fine, those sort of managed reprimands are just token gestures that make the whole thing even more maddening. If you're interested you can google Juncker Amazon Luxembourg to find out more about Amazon's place at the heart of the EU.

I've got bad news for you. The flow of capital requires a mix of small businesses and multinationals and everything in between. Symbiotic business relationship held to account by parliamentary democracy with varying degrees of success.

I don’t disagree at all. However, do you really think that, once we leave the EU, our lovely benevolent Tory government will be busy Robin-Hooding around grabbing sacks of tax revenue from big business? Or will be be grovelling and scraping for their business while cobbling together all our new, disproportionately unfair and shitty trade deals

I don’t know the answer to this question btw so apologies if that comes across as goady- I genuinely don’t know!

Yep, don't like this sucking up to business by all parties at all.

Its difficult for Luxemburg though, what else can a tiny country do? but a £250m tax fine is hardly peanuts & the UK has been complicite in large corporations like Vodaphone paying next to nothing.

Considering the new EU rules on tax evasion and workers rights, you'd expect businesses like Amz Asos Siemens Nissan Ford GSK etc or Londons FS you'd expect them to be keen on Brexit wouldn't you?

At the end of the day, business expect lower profits from brexit or even worse, they'll have to relocate.

The EU is not strong enough in dealing with big businesses.

But it does a bloody sight more than any U.K. government.

The choice isn't a weak EU vs a strong U.K. government standing up to big business.

The choice is a weak EU vs a totally spineless U.K. government.

If we really wanted to do something about big business we would work with the EU as a member to strengthen the position against big business. If we had EU wide policies then we really could stand up to big business.

The vast majority of small businesses don't export, so they are kind of irrelevant to Brexit. And the ones that do mostly don't have any experience of dealing with customs declarations, nor any capacity to undertake this work.

So I'm not really sure what your point is. Brexit is either largely irrelevant to small businesses except insofar as it may make recruitment more difficult, or a disaster for them (if they export to the EU).

Hopefully none of these small businesses have either corporate or private customers who are feeling the pinch. Because those customers stop buying. But hey, let's all pretend that small businesses are unaffected by Brexit and that our entire economic needs can be satisfied by them.

I once asked Rupert Murdoch why he was so opposed to the European Union. "That's easy", he replied. "When I go into Downing Street they do what I say; when I go to Brussels they take no notice."

Anthony Hilton, writing in the London Evening Standard (25 February 2016)

Yes obviously all companies are affected by a recession but it's a second order impact. Some small businesses who import raw materials or goods from the EU will also be impacted of course.

But I'd guess that most U.K. SMEs are service sector.

Their voices are behind all the Brexit fear and doom-mongering which is so prevalent on MN - and gets in the way of planning a positive future for the UK.

Sorry to break it to you, but BREXIT is what's getting in the way of a positive future for the UK. Not fearmongering.

You be as positive and smiley as you like, you still won't change basic economic or legal facts. FGS.

planning a positive future for the UK

how should we start doing this? What's the first step?

Securing one's borders? Talking to neighbours?

As a leaver, what should we be doing right now?

And Rupert Murdoch's papers are sold in corner shops and people go there and buy stuff while they are getting a paper and the place keeps going.

@OP - agree that it's beyond frustrating that Amazon and other large multinationals pay next to no tax in the UK.

Have no idea how Brexit will help resolve the issue but I can see how remaining in the EU can help. For example; at least the EU is pushing Apple to pay an appropriate level of tax by declaring €13bn as an illegal tax benefit awarded by the Irish government (€13bn is not a stage managed reprimand - that's significant even for Apple). Not sure if the appeal has been heard but the effect of this case will serve as a precedent that will force other MNs to pay more tax.

How is the UK leaving the EU going to help UK gain more tax revenue from multi-nationals? Indeed, it's not clear from the article that the statements made by the Chancellor (not cited or quoted) support the conclusion that MNs want to keep the EU as-is. Given the EU's recent activism against MNs (e.g. Apple, Google), presumably they'd want to reduce it's power rather than support the status quo.

It's worth noting that small businesses employ more people in the UK than the multinationals do

Interesting stat Millyonth - I didn't know that!

Time an time again leavers come on and moan that the EU is encroaching on our Sovereignty & Justice systems.... yet also complain the EU didn't stop Austerity, didn't stop ZHC and now don't do enough on Corp taxation....
which can only be addressed by International action, now the rules will be made in Europe and we will have no say.

What exactly do you want?

OP, do you remember when the Tories got into power with the Lib Dems backing? One of the their election pledges was to close the legal loopholes that allow coporations and very wealthy individuals get away with paying little to no tax. They didn't do it. Can you tell me how the EU stopped them?

That Graham Stringer piece says absolutely nothing about how Brexit will be better then the status quo. It just says that Leave won, people didn't vote to be better or worse off, just to leave. Is that the best argument the Brexiteers have? Also ignores that inconvenient bus doesn't it.

@OP - any answers to the numerous questions?

Millyonth,

How is Brexit going to help your business?

@Crimson72

It is indeed true that SMEs employ more people than large businesses (which provide 40% of all employment). Take a look at government statistics on this. Worth pointing out that medium and large employers (i.e. organisations with >=50 employees) account for 53% of total employment. This segment of the employment market is still pretty significant.

It's completely obvious that SMEs employ a lot of people. Think of your high street: many bakers/ hairdressers/ opticians etc will be SMEs, so will most of your local plumbers, electricians, taxis etc (some of them will operate franchises).

But most of the UK's exports are done by big companies.

Even if the U.K. succeeds in "going global", Mr. X. the hairdresser and Ms. Y. the plumber are not going to be exporting their services to the EU, unless they have the good sense to move there before the 29th March amputates their freedom of movement.

If I am short of cash, the first thing that stops is my regular trip to the hairdresser. I don't eat out anymore and I don't buy new clothes. Or spend much money at all. These little businesses are of course affected by customers' financial problems. In that they don't get customers.

@Mitsigri - agree and the statistics shared earlier support your statements; micro businesses account for 33% of employment but only 21% of aggregate turnover/revenue while large businesses account for 40% of employment but 48% of turnover/revenue. In general, larger businesses generate more value per person and in general will provide higher quality jobs (i.e. higher salary).

Brexitbingo I don’t disagree at all. However, do you really think that, once we leave the EU, our lovely benevolent Tory government will be busy Robin-Hooding around grabbing sacks of tax revenue from big business? No I’m not that naive! Although Hammond does have his digital services tax to be fair. Not much but it’s a start.

Krusty. OP, do you remember when the Tories got into power with the Lib Dems backing? One of the their election pledges was to close the legal loopholes that allow coporations and very wealthy individuals get away with paying little to no tax. They didn't do it. Can you tell me how the EU stopped them? I’m not saying that the Tories are great or that the EU is to blame for all our ills. I just posted Stringer’s article as an antidote to all the fearful threads about Brexit. I think it helps to explain why many corporates prefer to maintain the status quo and are therefore ramping up the fear . In my opinion things will change very little after Brexit.

Indistinct OP - any answers to the numerous questions?
I’m trying to answer them now. Sorry for the delay.

nutty. How is Brexit going to help your business? I don’t think it will be helped much in the shortterm. I don’t really think things will change very much. I am a practical person and I believe that trade will go on because money makes the world go round. Most of my customers are in Southern Europe but they will keep on buying from me because they trust me and my team and they need what we provide.
In the medium term I think our economy will be boosted by the change of emphasis away from Europe and towards the rest of the world – this is all speculation of course – just as the fear-mongering is – it’s just my belief and I can’t prove it.

Indistinct. In general, larger businesses generate more value per person and in general will provide higher quality jobs. You’re probably right. I’m not saying small business good / big business bad. But here are some stats from the Federation of Small Businesses: "Small businesses accounted for 99.3% of all private sector businesses at the start of 2018 and 99.9% were small or medium-sized (SMEs). Total employment in SMEs was 16.3 million; 60% of all private sector employment in the UK. The combined annual turnover of SMEs was £2.0 trillion, 52% of all private sector turnover."

So small businesses make up 60% of private sector employment but you don’t hear their voices very much. I think that over 60% of small to medium uk businesses do trade internationally.

Anyway, the point of my thread was that big corporations are ramping up the fear about Brexit. And their words should be taken with a big pinch of salt. I think Stringer explains it quite well. That's all.

@millyonth - thanks for getting back to us.
Keen to know what you think of EU's actions with respect to Apple (tax avoidance) and Google (unfair competition & data privacy). To me these cases demonstrate the value of a supra-national organisation like the EU that has the combined weight to control the poor behaviour of multi-nationals. Think this is contrary to Springer's analysis.

Also agree with Mistigri, the large organisations and multi-nationals are complaining most because they are much more likely to export and import finished goods, components, food, services, etc... than small organisations. Brexit affects them disproportionately anyway and this coupled with the fact they're major employers, household names etc ... means they get more coverage.

Don't think that points being raised by large corporations are politically motivated. Introducing additional tariff and non-tariff barriers to supply chains that currently without these are real effects of Brexit and will affect viability/profitability of organisations operating in the UK. These organisations are likely to reduce/stall investment and/or discontinue these operations. It's not politically motivated but unreal "fear" being ramped up - it's real impacts to these organisations with real effects on the people they employ.