Vince Cable criticises Starbucks over 'tax dodging'

Vince Cable Delivers Speech

Vince Cable described Starbucks as "tax dodgers" on Monday and said he could understand why people are boycotting their 700 British outlets, in the latest ministerial intervention in the row over multinational avoidance schemes.

The business secretary, when asked by the Guardian if he would consider boycotting their products, said: "I don't shop at Starbucks so this doesn't apply to me, but I can fully understand why people would vote with their feet as a result of their tax dodging."

Cable's strongly worded intervention came after parliament's spending watchdog, the public accounts committee, said HMRC was "way too lenient" on companies that use clever accounting tricks to pay very little or no tax. It condemned tax avoidance techniques used by the coffee company, as well as Amazon and Google.

Starbucks has set up a meeting with HMRC to discuss its tax bill, following reports it had paid just £8.5m tax on its British profits since 1998.

Danny Alexander claimed on Sunday that he was boycotting the outlet. "I am delighted they are taking this issue seriously and they are listening to the feedback from their UK taxpaying customers. I might be able to buy a coffee from Starbucks again soon," he said.

When asked about his boycott on Monday's Radio 4's Today programme, Alexander said he is chiefly a "tea drinker" before welcoming consumer pressure upon companies not paying their fair share in taxes.

"I think that one of the things that, for example, the comments by Starbucks this morning where they've said they want to come to the Treasury and HMRC to talk about their affairs is perhaps more of a refection of something quite new, which is the consumer pressure, if you like, the public pressure that has been put on those companies," he said.

He ruled out naming and shaming companies with low tax bills, but promised that HMRC would have more special investigators to work out where any laws have been broken.

Margaret Hodge, the committee's chair, said she has boycotted Starbucks and Amazon but added that she has found boycotting Google more difficult.

A spokesman for treasury ministers George Osborne, Greg Clarke and David Gauke declined to say whether any of them have boycotted, or are considering boycotting, products sold by multinationals that are found to be avoiding tax.

Rajeev Syal

Powered by Guardian.co.ukThis article was written by Rajeev Syal, for The Guardian on Monday 3rd December 2012 19.42 Europe/London

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