How can we support local independent businesses when the entire economic and financial system is hot-wired to favour multinationals?

TL:DR – Ministers have had a decade to deal with this. They have chosen not to.

Some local Twitterfriends were discussing this shortly after the lockdown.

So where is the ethical alternative to Amazon that also can hold its own?

I’ve lost track of the various attempts to set up alternatives to Amazon. They all have significant shortcomings because to set up the sort of operation that a multinational corporation has – and with the wealth that it has, requires not only some serious money but also the strength of purpose to resist attempts at being bought out. I’ve lost count of the number of fast-growing online start-ups that have been snapped up by one of the big global digital firms before they get big enough to compete. One of the ones that many of us – myself included, assumed was independent of Amazon – AbeBooks, was one of many that was taken over by it or another larger online-based firm.

I’m not going to criticise individuals for using/shopping on Amazon. I take the Extinction Rebellion view that ‘the system’ is the problem. We’ve tried using consumer pressure to improve things across a whole host of sectors over the past 40 years – on the back of mainstream politicians saying this is how to get change, to economic theories expounded by neo-liberal academics and institutions talking up the power of the market while ignoring or playing down broken and corrupted economic systems.

A case study – trying to find a multi-socket extension in and around The Grafton, Cambridge

I knew the easier thing to do would be to get one online. It should have been straight forward – heading into town by bus which has a much-reduced passenger use in the face of Covid19, and going to Cambridge’s second retail centre, The Grafton, which was opened by The Queen in a wave of publicity in 1984 following a hugely controversial redevelopment process that lasted over 30 years.

Normally I’d have popped into the old Argos store on Fitzroy Street, in the same block as the Waitrose shop that took over the lease once occupied by the only Iceland frozen food shop in the centre of Cambridge. But like other places, Argos has been struggling, as reported in the run up to Christmas 2019. How many of you knew it was owned by Sainsbury’s? As a result of the struggles, the Argos store was closed, ending the presence of the catalogue-based shop that was previously the anchor shop in the old Bradwell’s Court. That or I would have popped into Maplin on Regent Street. But they went into administration and were one of several high street brands to disappear in recent years.

I popped into several shops but could not find what I needed – a multi-socket with each one having its own separate switch, and ideally a couple of USB ports to charge gadgets as well. The only ones available were the basic ones. So instead I had to go online to Amazon to get one that met all of my requirements – ones that previously would have been met (and had been in the past) by now long lost shops.

The scourge of excess packaging. And for what?

These two boxes above illustrate the problem of excess packaging. The big one is full of what I call ‘lucky dip polystyrene’ – even though in it were a handful of books and a picture only a fraction of the size. Why?!? Next to it is the large box full of recycled paper that had the much smaller four-socket extension which is about as wide as the black tape around the box. Again. Why?!?

The advantages Amazon has over high street retailers.

Amazon pays £220m in UK taxes despite £11bn sales

Of that, its business rates was £63m compared with John Lewis Partnership’s business rates bill of over £170m. Hence calls from the retail sector to reduce business rates in return for a rise in corporation tax as a policy to provide some relief for the struggling high street. Not everyone agrees – some stating that this is an inevitable long term move away from shopping on high streets and town centres.

That tax question won’t go away – it was first picked up on a decade ago on the back of the UKUncut protests on tax avoidance in the face of the huge cuts to public services announced by Chancellor George Osborne – cuts to public health budgets in local government that inevitably hit the preparations for responding to a public health emergency. The very visible occupations and direct action campaigns by protesters meant that MPs started hauling in executives from the targeted businesses to give evidence. Amazon did not come out well in 2012. In the series of hearings, the then Managing Director of John Lewis Partnership called on ministers to change the rules that favoured Amazon.

Fast forward to 2020 and the impact of the pandemic restrictions…

…and Amazon found themselves ideally placed to take advantage of its position it had created globally, resulting in eye-watering increases in wealth for its founder. It’s all the more striking in the face of so many firms and businesses going bust, and so many people losing their jobs.

And yet HMRC are still dragging their feet on tax collection that they have to be taken to court by activists to force it to do their job. This was the case of Uber, where the tax bill now assessed reached £1.5billion following action by the Good Law Project.

So how do you reform the system?

There are people far more knowledgeable and experienced than me who have done the research on this. Even if ministers were able to bring in an ‘Amazon Tax’ even that would not solve the problems. This is because there are a whole host of issues related not just to Amazon’s business model but to that of how large high turnover multinational retailers operate. These issues on top of taxation include:

  • Workers rights – including minimum wages, health and safety – locally as well as in the countries that goods are manufactured in
  • Environmental impact – including water use and greenhouse/carbon footprint
  • Remuneration – executive pay in the face of huge societal inequalities
  • State of local economies – including the decline of the high street and the rise of clone town Britain, recalling in 2010 Cambridge was the worst in the country.
  • Transport and congestion – the rise of diesel delivery vans driving around residential neighbourhoods in absence of any schemes, arrangements or regulations to reduce the impact through locally co-ordinated schemes similar to what Cambridge University has for its students.
  • Offshoring of profits – which inevitably means wealth created does not get reinvested in local economies and communities.

Looking at the above, it strikes me that this model is utterly unsustainable in the face of the climate emergency. The environmental footprint of global freight – shipping and air in particular, will have to come down and quickly. Whether this will happen soon enough depends on what happens in a certain election on the other side of the Atlantic later this week.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: