The GMB’s recent report into Amazon’s working practices in the UK have been summarised by their General Secretary, Tim Roache: “Amazon are taking us for mugs. They must quite literally be laughing all the way to the bank, they’re making profit from a government that they refuse to pay their fair share of taxes to. They refuse dignity and rights for their workers, don’t pay their taxes and the government give them contracts anyway – it’s beyond a joke.”
But why does he think this about Amazon?
As reported by the Guardian, there are three main issues with Amazon’s business in the UK; their UK workforce’s health and safety record, how much government spend on using their services compared to their corporation tax payments, and the key individuals that have connections with both Amazon and the UK government.
How much did HMRC spend with Amazon?
In 2018, HMRC spent £11m on web hosting with Amazon. The Home Office are the government department that had the highest Amazon bill of £16m. In total, Amazon secured £45.5m worth of government contracts.
How much corporation tax did Amazon pay?
In 2016, Amazon paid £7.4m in corporation tax. In 2017, this plummeted to £4.5m although, after a £2.9m deferral, they only actually paid £1.7m.
The recorded profits for Amazon’s UK subsidiary for this year were £72m.
Even after this huge fall in corporation tax, they still won the government contracts to provide services the following year.
This simple maths makes sense of Mr Roach’s comment.
A government spokesperson said the Amazon web Services contracts were chosen because they were seen as “value for the taxpayer, capability, security and reliability of service”. Adding: “We also make sure that large businesses, like all other taxpayers, pay all the taxes due under UK law – there are no special deals and we don’t settle for less.”
How important are Amazon as an employer?
Amazon employ 27,000 people in their 17 UK warehouses, providing a substantial amount of employment. But the GMB are campaigning for better workplace conditions for these employees, after 600 ambulances were called to Amazon warehouses in the last three years. So far Amazon have not responded to calls to work with the Union to do a joint health and safety audit.
Regarding government contracts, Labour’s Shadow Business Secretary, Rebecca Long Bailey MP, said:
“It is shocking that the government has spent millions with a company that makes massive profits while mistreating its workers and paying barely any tax. Labour in government will insist that that when taxpayer funded public services and goods are delivered by private companies, they operate to the highest standards, with a public service ethos and not simply in the interests of shareholders. We will clamp down on tax avoidance and evasion, and implement our Tax Transparency and Enforcement Programme to build an economy that works for the many, not the few.”
As far as Health and Safety goes, the company puts itself under suspicion by not agreeing to a joint audit, as requested by the shadow pension minister Jack Dromey. He said: “If Amazon’s working practices are as safe as they claim, why will they not agree to undertake a joint health and safety audit with the union? It is the Health & Safety Executive’s public duty to investigate Amazon and protect the health and safety of its workers.
What do Amazon say?
A spokesperson from Amazon Web Services (AWS) said: “The report from the GMB is misleading. Here are the facts. In line with the Treasury’s own guidance, public bodies have a responsibility to ensure that the services they procure from the private sector represent good value for money to the taxpayer, and that’s what they’ve found with AWS. Government departments using AWS are seeing a 40% to 60% cost saving. They could choose more expensive or less reliable options, but that would be a disservice to their constituents.”
They have also said we are “proud of our safety record” and that the allegations made by the GMB are false. Amazon has 40% fewer reported injuries that comparative warehousing companies, according to Health and Safety Executive Figures.
What about the individuals involved?
Two senior government employees who were both involved in tech and data services have since left to work for Amazon. Alex Holmes was our government’s data service chief operating officer. Liam Maxwell was a leading adviser on technology. He directed the government towards cloud based web services, like Amazon’s. He is now the director of international transformation for AWS, which is their cloud services section. Alex and Liam are now working together again in the same Amazon department.