The Daily Telegraph reports:
Amazon’s UK operation generated £4.2bn of sales last year, but it used a subsidiary in Luxembourg to help it reduce its corporation tax bill in the country to just £2.4m in 2012. According to documents filed at Companies House, the company received £2.5m in government handouts over the same period.
The Seattle-based company would not say which investments the UK Government has helped with, but last year it opened a new distribution plant in Hemel Hempstead, creating 600 jobs, promising to open three more over the next two years.
The comments section for the article is much what you would expect: Why is the government giving money to Amazon!? But we know exactly the argument Amazon’s representatives would use: think of the economic impact! 600 jobs! And the indirect impacts and so on and so on …
The false promise of economic impact studies (see this earlier post) puts all sectors – nonprofit arts, commercial book retailers, casinos, football stadiums, telephone call centers – on the same footing. They can all make the same claims of job creation and spin-off effects. Either we reject this method of analysis, or we recognize that many, many firms will approach government with the same claims.