Tax Avoidance and Multinational Companies

Debate between Margaret Hodge and Joan Ryan

Wednesday 3rd February 2016 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

The most bizarre feature of the row over the past 10 days is that both Google and the Chancellor thought they had landed a public relations coup. Frankly, the arrogance of Google and the hopelessness of our Government take some beating. Just look at Google’s results announced this week. It now claims to be the world’s most valuable company. It claims with pride that it has cut its tax rate from 18% to 5%. If we look at Eric Schmidt’s own earnings—the man at the top is very proud of Google’s tax structure, saying “it’s just capitalism”—he was paid £76 million in 2014 alone. That is the equivalent of well over half of what Google paid the British public for all the money it has made out of the British public over 10 years.

[Joan Ryan]

Is my right hon. Friend concerned that the Google agreement could present a threat to future tax revenues by setting a very dangerous precedent?

[Dame Margaret Hodge]

I agree entirely. The Minister talks about the work done by the Public Accounts Committee. The law is not a complete ass. I do not believe that. When the National Audit Office looked at, I think, 10 cases—I will be corrected if I am wrong—it found three where HMRC had not abided by its own rules. Every time something like this happens, it damages British jobs and British businesses—nobody else. We have definite proof that a sweetheart deal was entered into with Goldman Sachs.