Even though, as Fraser argued last week, Google has done nothing wrong in agreeing to pay £130 million to settle its UK tax claims, MPs were in a furious mood about the agreement when they discussed it in the Commons this afternoon. John McDonnell asked an urgent question on the deal, and found, unusually, that he had support from across the House.
It wasn’t just Labour MPs who stood up to condemn what they saw as one standard for their constituents, who are hounded by the taxman over relatively small claims, and another for big powerful multinationals like Google. Tory MPs joined in, too, with Steve Baker telling David Gauke that the deal was ‘at once derisory, substantial, lawful and completely unacceptable to the public’. Gauke looked a little weary as his Conservative colleague Matt Warman, a former Telegraph journalist who has covered Google’s tax arrangements over the years, asked him whether any other country had offered Google such a generous deal.
And MPs across the House made disbelieving noises when Gauke refused, in response to a question from Diana Johnson, to say what the actual tax rate for Google was. ‘Err, no!’ he said, to laughs.
Gauke was handling a row that his boss George Osborne had probably made a little worse politically by describing the deal as a ‘major success’ (though he downgraded it to ‘good news’ when interviewed today, and Downing Street would only say it was a ‘step forward – of course there’s more to do’).
The problem is that even though Google is just doing what is lawful, it makes MPs’ constituents feel as though government doesn’t care about them, and that is why MPs get so angry about the matter, and why Number 10 has been cautious on the matter, too. But if MPs are worried that their constituents think government doesn’t care about them, the best thing for government to do is to change the tax rules so that companies like Google do have to pay more tax, rather than blaming those companies for doing what they are entitled to.