Labour’s shadow chancellor says fast food firm must pay more tax in UK and raise wages

This article is more than 10 months old

This article is more than 10 months old

John McDonnell has accused McDonald’s of failing to pay enough tax in Britain and demanded a wage rise for its workers and trade union rights to organise at its restaurants.

Speaking at a protest arranged by striking McDonald’s workers outside Downing Street, the shadow chancellor said the US company was mistreating its UK workers and should raise their pay to £15 an hour and pay its fair share of tax.

McDonnell told the Guardian: “They are one of those companies that makes large amounts of profits and then doesn’t pay their workers properly and don’t pay their taxes effectively. It’s one of the things we will clamp down on.

“We are saying to McDonald’s: pay your workers a proper wage, treat them properly and actually also pay your taxes.”

Workers from six of the chain’s restaurants were on strike to demand wages of at least £15 an hour, mirroring a US campaign for fast-food workers to earn $15 an hour. Significantly higher than the government minimum wage of £8.21 an hour for over-25s, the demand is also higher than Labour’s policy to raise the minimum wage to at least £10 an hour, including for younger workers. McDonnell said he supported the workers’ demand for £15 an hour at McDonald’s.

Facebook Twitter Pinterest John McDonnell joins a protest by striking McDonald’s workers at Downing Street. Photograph: Penelope Barritt/Rex/Shutterstock

The shadow chancellor said the US company’s executives were paid millions of pounds a year, while some UK workers lived a “poverty existence”, resorting to food banks and sofa surfing.

McDonald’s allowed its outgoing chief executive, Steve Easterbrook, to keep stock awards worth more than $37m this month, as well as about $675,000 (£524,000) in severance pay, despite him being fired for having a consensual relationship with an employee.

Filings with Companies House show McDonald’s paid £75m in UK corporation tax last year, up from £64.9m in 2017. It made pre-tax profits of £406.3m, up from £341m in 2017, despite a slide in sales of almost £80m to £1.5bn.

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The EU ruled last year that an arrangement between McDonald’s and Luxembourg, which allowed the firm to pay almost no tax on franchise royalties in the EU and US, did not break Brussels’ laws.

McDonald’s said as few as nine of about 130,000 of its employees in Britain were on strike. It did not respond to requests for comment about its tax affairs.

A spokesperson said: “We are committed to investing in our workforce, listening to and doing what is right by them.”

McDonald’s added that it complied with UK tax rules, saying: “We pay substantial amounts of corporation tax in the UK.”