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From: The Socialist issue 862, 1 July 2015: Reject EU austerity!

Search site for keywords: Super-rich - Welfare state - Welfare - State - Tax - Benefits - Starbucks - Rich - Facebook

The corporate welfare state

Photo by Liz West (Creative Commons)

Photo by Liz West (Creative Commons)   (Click to enlarge)

Chancellor Osborne's savage attack on welfare benefits has been accompanied by Tory propaganda in the right-wing media, accusing low-income families of being part a 'something-for-nothing' culture holding back the country's economic recovery.

But how then does the government explain the 'corporate welfare bill'? Research by Kevin Farnsworth at York University calculates that the grants and subsidies paid directly to companies in 2011-12 amounted to over £14 billion - nearly three times the £5 billion paid out that year in Jobseeker's Allowance.

When other businesses' 'in-work' benefits are included (such as tax benefits, quantitative easing, export guarantees, public procurement from private companies) then direct corporate welfare amounts to a minimum £85 billion a year - a large proportion of the government's total budget deficit.

Unsurprisingly, the super-rich friendly Chancellor has remained tight-lipped about this corporate welfare bill.

Between 2005 and 2011, of 44 companies that received government grants, 13 didn't pay any corporation tax; another 17 didn't pay any corporation tax either the year before or the year of getting their public benefit.

In 2013 Facebook only paid £3,169 in corporation tax; Amazon £10 million (over ten years!); Apple £11 million; Google £11.6 million. At the same time, total UK revenues of the four companies were over £17 billion.

Between 2009 and 2012 Starbucks paid no corporation tax, claiming it had made a loss in these years. In 2011, Starbucks' UK sales amounted to £400 million.

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