Mothercare chairman Alan Parker has added his voice to those businesses speaking out against those who avoid paying tax in the UK. Photograph: Graham Turner for the Guardian
It's a well-known fable. The scorpion wants to cross a river and pleads with the reluctant frog to carry him on his back; it would be pointless to sting the frog because that way both would drown. Halfway across the river the scorpion stings, dooming both. Why? asks the dying frog. Because it is in my nature, replies the scorpion.
Too many owners and managers of British companies, along with the Big Four accountancy firms that provide them advice on how to structure their affairs to evade and avoid taxation, are like the scorpion. They just can't help themselves from behaving badly, even if it brings everyone down. It is in their nature.
As it becomes clear that we are living through the most protracted period of economic depression for more than 100 years, the result of not just policy mistakes but the way Britain has done capitalism, business itself is beginning to ask the first tough questions about what is wrong. There always was a distinction between good and bad capitalism, but so far the critics of bad capitalism have not strayed far beyond the leader of the Labourparty, some trade unionists, business secretary Vince Cable, the odd business maverick and one or two liberal commentators. But last week some serious companies weighed in, plainly worried about the corporate scorpions riding on their backs.
Andy Street, managing director of John Lewis, broke cover to say that multinational companies trading in the UK but deploying overseas tax havens necessarily must "out-invest and ultimately out-trade" businesses paying full taxes in the UK, who now risk being driven out of business. "Ultimately there will not be a tax base in the UK."
Mothercare chairman Alan Parker joined in. "Unfair pricing from international UK tax dodgers puts our long-term ability to survive and grow under threat," he said. Sebastian James, chief executive of Dixons, tweeted that he agreed with Andy Street: "Retailers making profits in the UK should pay tax in the UK."
Unlike in manufacturing, retailing still has a critical mass of British-owned and British-based companies that have collective heft. With Comet recently joining a lengthening list of retailers going into receivership, Street, Parker and James are breaking ranks from the default position of British business that whatever leaves the mouth of a Tory politician must be good and the words of a Labour politician must be bad.
The ritual ideological incantations of, say, the Free Enterprise Group in the Conservative party – that all British business needs is yet more labour market deregulation, further dismantling of welfarism and striking a detached bargain with the EU – have hitherto gone unchallenged by business. Now a broader view of what is wrong is emerging, triggered by business itself.
What prompted Street's intervention was the disastrous performance by Amazon's public policy director, Andrew Cecil, before the House of Commons public accounts committee, aided and abetted by two flanking cameos from Starbucks and Google. The three scorpions were being quizzed about their tax dodging, but the comptroller of the National Audit Office, Amyas Morse, felt that the lack of evidence brought to the committee by Amazon was " insulting". Meanwhile, Starbucks' claim that it made no money in the UK was palpably disingenuous and persuaded none of the MPs. And Google admitted in effect that it does what it does because it can. It is just in a scorpion's nature.
Senior Treasury officials have worried for many years about the precariousness of the UK's corporate tax base and the ease with which companies could use a combination of transfer pricing and offshore tax havens to avoid UK tax. Mortal threats come from the rise of private equity – for example, private equity-owned Boots is now domiciled in Zug in Switzerland – and the emerging dominance of foreign multinationals in the UK because of our careless indifference both to who owns our companies and how they organise their operations. They need addressing.
For a long time, the arguments about the British economy have been defined by exchanges between opposing poles of the Free Enterprise Group and advocates of a bastard Keynesianism. Director generals of the CBI may have privately conceded that the argument needs to be broader and more sophisticated; that an overvalued exchange rate, the shortcomings of the financial system, the bias against innovation or the abuse of tax havens were all chronic problems. But persuading the powerful CEOs within the CBI to back them has been impossible.
Importers want a high pound. Banks allowed no criticism. Nobody wants to be on the side of high taxation by inveighing against tax havens or to give Labour any succour if it can be helped. A candidate for CBI director general who withdrew from the final shortlist to succeed the outgoing Richard Lambert in late 2010 told me that the job allowed little scope beyond urging more and better training, on which everybody could agree. On many big issues, the CBI was mute or followed the Tory line. Indeed, Lambert, ready to attack wildly overpaid CEOs as risking being aliens in their own country, was felt to have overstepped the line.
At last there is a breaking of ranks. Desperate economic circumstances and a chancellor more anxious to score political points than develop an imaginative economic policy are forcing a transformation in established positions. John Cridland, the current director general, has used the space to develop a more sophisticated policy agenda than his predecessors were allowed. And now British-based retailers are speaking out.
But any effective move against the scorpions requires the state to act and the more it can act with others the more effective it will be. Tax havens were a barely mentioned part of Britain's most effective postwar industrial policy: the swath of concessions used to support the growth of the City. We sponsor more of them than any other advanced country. That has to be reversed. There are many possibilities, ranging from taxing companies on their turnover in the UK to outlawing the use of tax havens, action that is best delivered if the EU can move together, but this is always opposed by the British.
Our fifth-columnist Eurosceptics, allies of the scorpions, are happier that the UK corporate tax base is destroyed and the British economy is owned by foreigners indifferent to their public obligations than to act together with Europeans to further joint British and European interests. Mr Miliband and the Labour party say they are for a better capitalism, against tax havens and are pro-Europeans. Now there is an opportunity to say it and to build a new coalition. Let's hear them.