Opposition Day — [18th Allotted Day] — Tax Avoidance and Multinational Companies

Part of the debate – in the House of Commons at 4:22 pm on 3rd February 2016.

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Photo of Wes Streeting Wes Streeting Labour, Ilford North 4:22 pm, 3rd February 2016

That is a fair point, but of course many tax experts have estimated that Google is paying an effective tax rate of 3%. If that is not the case, we need to see the numbers that give us that assurance. We do not doubt the difficulties here. In an increasingly globalised world, where intellectual property and the growth of internet companies makes this more important in the debate about tax, these are difficult issues to grasp, but there is no hint of fairness or transparency about this deal, and that is what we are seeking with this debate.

We would have more confidence if there had been consistent messages on this issue from both the Government and Google. On 23 January, the Tory Treasury Twitter account—not the most accurate of sources—claimed that the

“Google tax bill is for years 2005-2011, almost all under Labour”.

Yet Google Ltd’s account for the period ended 30 June 2015 reported

“a liability to HMRC of £130 million in respect of additional taxes and interest due for prior accounting periods and the current accounting period.”

The Minister says that there has been no sweetheart deal, but, as I asked him earlier, how can he give us that assurance if he has not seen the deal and is as far removed from it as he says. The Chancellor said it was a “major success”. How can he laud it as a major success if he is not close enough to the deal? If it is such a major success, why did the Prime Minister in Downing Street run so far away from that claim? Why has the Financial Secretary to the Treasury not once in recent weeks stood by his Chancellor in saying that this deal is a major success? I believe that it is because he knows that it is nothing of the sort, and that this Government look deeply out of touch with the public.

Labour were accused of attacking HMRC staff. The fact is that HMRC has a responsibility to apply tax law. It has a duty to go for the full rate of tax due, but, as my right hon. Friend Dame Margaret Hodge pointed out, it has not always applied that duty. I am sure that, following the work of the Treasury Committee and the Public Accounts Committee, we will find that the issue at HMRC is to do with resourcing and extra teams and whether there are the people and the capacity to pursue not just the current claims and outstanding tax, but the historical backlog that exists as well.

Also of concern is the fact that Google itself has made some rather odd claims. On the one hand, we see senior Google executives writing to the newspapers about how great the deal is and how they have stood by their obligations, while, on the other, they are committing to paying more tax in the future. What is the reality? Is it that Google is paying the tax liability that is due; that it has somehow got away with it and plans to pay more in the future; or that it sees tax as a means of charity towards the state and it is willing to prop up the Treasury coffers a bit more generously in the future? Whatever the reality, there is deep inconsistency in the messages from the Government and Google.

We should look at the comments recently made by the Mayor of London who went as far as to suggest that finance directors have a fiduciary duty to minimise tax exposure. That cannot possibly be the case. If the

Mayor of London looked at the duties under the Companies Act 2006, he would see that they also have to make reference to

“the likely consequences of any decisions in the long term…the company’s business relationships with suppliers, customers and others”— and—

“the impact of the company’s operations on the community and the environment”.

There is a problem with the ethos of those on the Conservative Benches. Many of them see tax as a form of theft, whereas we see it as a civic responsibility and duty and as a means of creating a more civilised society. I want businesses in my constituency to pay their fair share of tax, and indeed they do. It is not unreasonable to expect a multinational company such as Google to do the same. The Government need to do much more to ensure that there is transparency for all such companies in all of the jurisdictions in which they operate.