Thursday 5 December 2019

David Cameron 'genuinely angry' about Google's tax treatment

Prime Minister David Cameron speaks during Prime Minister's Questions in the House of Commons, London. Photo: PA Wire
Prime Minister David Cameron speaks during Prime Minister's Questions in the House of Commons, London. Photo: PA Wire

David Cameron has said he is "genuinely angry" about Google's tax treatment - but insisted his Government is making up for lax rules under Labour.

The Prime Minister said he "disputed" claims that a £130 million back-tax settlement by the internet giant meant it was paying a rate of just 3%.

He said those upset about the firm's tax should blame Tony Blair, Gordon Brown and Alistair Darling, who allowed it to pay "zero percent".

The comments, in angry clashes with Labour leader Jeremy Corbyn at Prime Minister's Questions, came with ministers under fresh pressure to justify the deal struck by HM Revenue & Customs.

Italy is said to be about to seal an agreement which will see Google pay a higher proportion of its profits, while Mr Cameron, Chancellor George Osborne and other senior figures are under close scrutiny over their links to the internet giant.

French MEP Eva Joly, vice chairwoman of the Special European Parliamentary Committee on Tax Rulings, said it wanted Mr Osborne to answer questions about the "very bad deal".

"This bad deal is very bad news for everybody because it shows that the UK prepares itself to become a kind of a tax haven to attract the multinationals," she told the BBC Radio 4 Today programme.

In the Commons, Mr Corbyn asked the premier whether it was correct that Google's settlement meant it had an effective 3% tax rate.

Mr Cameron replied: "We're talking about tax that should have been collected under a Labour government, raised by a Conservative government.

"I do dispute the figures that he gives. It's quite right this is done independently by HMRC, but I'm absolutely clear that no government has done more than this one to crack down on tax evasion and aggressive tax avoidance. No government and certainly not the last Labour government."

Mr Corbyn, who pointed out that the inquiries into Google had started under Labour, said ordinary taxpayers would be angry that such firms were getting special treatment.

But Mr Cameron said the new Diverted Profit Tax would mean companies would "pay more tax in future".

He said the coalition had raised £100 billion extra from business in the last parliament by closing loopholes.

Mr Cameron insisted he was "genuinely angry" about the situation with Google, which he said had been allowed to pay "zero percent" under Labour.

"Maybe he should start by calling Tony Blair - you can get him at JP Morgan. Call Gordon Brown - apparently you can get him at a Californian bond dealer called Pimco. Call Alistair Darling - I think he is at Morgan Stanley, but it is hard to keep up," he told MPs.

"Those are the people to blame for Google not paying their taxes."

PA Media

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