Oh to have been a fly on the wall as Google’s executive chairman George Schmidt met David Cameron yesterday. The astonishing events of the past few weeks surrounding the search behemoth’s tax bill have served to make the Prime Minister and Parliament look pathetic and weak and Google mighty and arrogant.
Google’s European vice president Matt Brittin last week repeated his laughable assertions that the all-seeing search engine did not sell anything in the UK.
Instead of marching him to the Tower, we were reduced to cheering on Margaret Hodge, chairwoman of the Public Accounts Committee, as she stepped up the rhetoric calling the global giant ‘devious’, ‘unethical’ and willing to do evil (contrary to its cute motto). How they must have trembled.
The Sunday Times piled in behind Hodge by quoting her source, a former Google employee who directly contradicted Brittin’s evidence. His assertion – as that is all it is – is that because a sale is concluded in Dublin nothing else counts for tax purposes.
This is at the heart of Google’s charade. And HMRC’s acquiescence to it does it a disservice. Meanwhile, the whistle-blower says he has 100,000 emails (Gmails?) backing up his claims.
The technical argument must surely now be tested by HMRC who have so far remained conspicuously quiet on the subject. Rules have not been broken, sources claim. HMRC appears to be much more comfortable picking on little guys (viz yesterday’s crackdown on Avon ladies), but when it comes to Vodafone, Amazon, Starbucks and Google their moral fibre appear to be as shot through as an NHS chief executive.
Google claims to be acting within the law. Clearly, it is not their fault if the law is an ass and out of date in its blindness to amoral global businesses with clever tax accountants. David Cameron let it be known yesterday that he was writing to all the international tax havens urging them to be more transparent. Well that’s that sorted then.
Roger Carr the CBI’s president also attended yesterday’s Downing Street meeting. Earlier in the day he called on Cameron to ‘stop moralising’ about tax as it was about ‘the rules’. Oh dear we may never know if Roger had a moral compass on which he could lose his bearings, but if he is planning to champion 21st century capitalism based on that level of moral philosophy, then we all better start praying.
As he is tipped to take over at BAe Systems we might guess they like the cut of his moral jib.
But, hey, Google doesn’t need Roger to make its excuses. Didn’t they set out to be socially responsible – a new kind of business? Didn’t they say it was about literacy and ‘freeing’ content for the masses? Oh yes, except they then appeared to be helping themselves to everyone’s content and weaving in and out of out-of-date copyright laws? And then there is the small matter of the squillions UK businesses’ spend every month with the Big Friendly Giant.
If the customer is in the UK, if the customer’s sales take place in the UK, if the ads are viewed in the UK and the contract negotiations take place in the UK, what kind of tax inspector says, oh but as long as you look like you close through that office in Dublin you are good to go?
As Private Eye has commented over the past few months, too many of HMRC’s big chiefs are poachers from the Big Six accountancy and tax firms who have turned gamekeepers. It is beginning to look like there is a lack of appetite to take on the big boys.
Given the state of the country’s finances this is not only a morally reprehensible situation it is an outrageously unfair and unsustainable position to adopt. If the law is unfit for purpose then it must be changed.
Aggressive tax avoidance has been made a central component of next month’s meeting of the G8 economic summit by David Cameron and George Osborne. Let’s hope they will show more backbone and leadership than they have to this point.
His words at the outset – that ‘we are all in this together’ – were always somewhat hollow coming from an Old Etonian and he has to work twice has hard to demonstrate that he really does have both a social conscience and a moral compass. Surely this would be something that Clegg and Co could also agree on? At times of crisis a common enemy is always welcome and bankers and tax dodgers will serve very well.
A one-nation Tory like Cameron needs to declare war on the slickers with billions of spare cash not just claimants with spare rooms, if we are really intended to believe that we are not just in it, but also in it together.
Mark Dickinson was formerly editor-in-chief of Trinity Mirror North West and of the Midlands and business development director of the regionals. He was also editor of the Liverpool Echo and the Newcastle Journal.