Thrice subsidised Amazon

Just before Christmas I spent a quiet Wednesday evening getting unexpectedly drunk in the House of Commons Strangers’ bar. As the conversation moved on to Starbucks’ offer to pay their own nominally set amount of tax, we, a small group of Scottish politicians and campaigners, got on to the subject of the two Amazon depots in central Scotland. Amazon brought 950 jobs to Gourock, Invercylde and Dunfermline, Fife, both economically disadvantaged areas, and promised another 1500 temporary posts during peak periods. We spoke of the bind which politicians of the major parties find themselves in as they cannot be seen to be criticising a company which brings significant numbers of jobs to people who need them.

But what sort of jobs are these? Many of the temporary jobs went to people from outside the local area, and others were required to work there as a condition of keeping their Job Seeker’s Allowance. They work as ‘pickers’ who walk miles up and down the warehouse floor everyday collecting the items ordered for delivery. On Christmas Eve 2011 Amazon cut short the shifts of hundreds of temporary workers at Gourock without any notice, refusing to pay them for the unworked hours and left them in the middle of the night locked outside of the isolated depot building. With no access to public transport many spent hours walking home for Christmas, unpaid, and the local community felt betrayed by one of its major employers. The permanent jobs are only marginally better, with low pay, few employee benefits and little progression.

But back to the politicians. Despite knowing this (and the ones I talked to certainly do) it is electorally unfeasible to stand in opposition to new jobs, no matter how poor the conditions or the indirect effect on local businesses. But perhaps in these times of ‘austerity’ they can speak out against companies like Amazon and their disastrous effect on local shops by showing how bad a deal they represent for the taxpayer. As one of my drinking companions observed, we payed for those Scottish depots three times over.

How come?

Amazon was provided with £2 million of taxpayers’ cash through the Regional Selective Assistance scheme to create new jobs in Scotland and a further £500,000 in training grants.

Since 2006 the Royal Mail is no longer the sole UK mail provider, opening it up to competition from private firms. But the Royal Mail still guarantees ‘universal service’ to any address in the UK, a service subsidised to the tune of £3 billion by the Government since 2007. Amazon more than any other UK company benefits from the giant public subsidy of the Royal Mail so that its shipping costs are lowered and it can out-compete local businesses.

Amazon doesn’t pay its employees a Living Wage so the government subsidises it again through in-work benefits paid to its employees in the form of Working Tax Credits. Today the Independent highlighted the fact that a mere 3% of the welfare bill goes on benefits to unemployed people. The need for benefits for people in work is a direct result of jobs which don’t pay a Living Wage.

On top of this Amazon UK pays barely any tax, reporting a 2011 turnover of £207 million yet paying just £1.8 million to HMRC. Their director of public policy was hauled in front of MPs last month to explain the discrepancy and was weasely in his refusal to disclose required information about their income. The short video is worth a watch to know exactly what kind of a man we’re dealing with.

So what to do, what to do? Boycott. It’s easy, just don’t give them money. Here are some ideas of where to spend it instead:

– give some to UK Uncut to support their work on tax avoidance

– order second hand books from Abebooks – a much nicer online bookstore.

– support your local bookshop if you’re still lucky enough to have one. Favourites of mine include City Books in Brighton & Hove, Persephone Books in London and online, and a whole host in Edinburgh but especially Elvis Shakespeare in Leith. They might cost a teensy bit more but they pay their taxes so it works out cheaper overall.


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