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Google woos the Tories to avoid paying a reasonable amount of tax

The tech giant has developed a formula for avoiding the increasing demands it pay a legitimate amount back on its mega-profits, explains SOLOMON HUGHES

GOOGLE, like other tech firms, is facing real political pressure over content, regulation and taxations.

So it is turning to standard lobbying techniques, which were very visible at the recent Conservative conference.

The three basic techniques are (1) hire political insiders, (2) promise self-regulation to head off real regulation and (3) promise/threaten to give/take jobs and investment.

Campaigners from UK Uncut and campaigning journalists have put tax avoidance by big corporations on the political agenda.

The long years of austerity have added pressure: welfare spending is being cut while rich corporations don’t seem to be paying their fair share. The tech firms are often very involved in shifting money to lower-tax countries, because their product seems more “invisible” and so easier to shift around the accounts.

So Google paid £49.3 million tax this year. It sounds a lot until you know its UK sales are worth around £5.7 billion. Lots of its UK income is shifted to other countries, including lower-tax nations like Ireland.

The pressure on Google over tax has had some results — in 2016 Google agreed to pay £130m in back taxes, although the deal George Osborne struck with the firm was widely considered too small.

On content, Google is accused of giving access to hateful, racist and misogynist material on the internet.

It is also accused of giving access to “fake news” — disinformation from “hyper-partisan” websites or Russian mischief-makers.

Google runs both its search engine and video-sharing website YouTube. It has been accused of hosting or giving access to bad content on both.

MPs have become very serious about regulating “hate speech” and “fake news” on the web, not least because they personally feel they have been victims of both.

I think the general public take the issue of tech tax-avoidance more seriously, but in either case, there is gathering pressure for regulating and taxing the tech giants. Google, for its part, really doesn’t want to spend money policing its bits of the web, or spend money on more taxation.

So it is spending more money on lobbying. Step one is hiring political insiders, so they can help win over their friends still in government.

Until the start of this year, Google’s head of public affairs in Europe was a former BBC journalist called Peter Barron. He had to go to the parliamentary committees and make excuses for Google over tax and regulation. But the pressure kept building.

So in February he was replaced by Tim Chatwin. He was David Cameron’s strategic communications director in No 10 until 2011, when he joined Google in a more junior position.

If you want to communicate with the Tory government, who better than the former head of Tory communications? Barron is just one of a number of Google spin doctors with links to either the Tories or New Labour.

Step two is to promise self-regulation to head off any state regulation. Self-regulation is always cheaper and easier, but you have to make it look flashy and convincing. So Google paid thousands for a massive stand inside the “secure zone” of the Conservative Party Conference.

It used the stand to promote two schemes: “Be Internet Legends” and “Be Internet Citizens.” Google says these programmes are to train primary and secondary children respectively on how to use the web safely.

It says it will visit schools across Britain and “train 60,000 young people face-to-face through assemblies and workshops.”

It looks impressive, but doing some free “be good” lectures at assemblies puts the onus on the kids and avoids a challenge to Google’s fundamental hands-off free market unregulated business model.

Step three is to promise/threaten jobs. Google paid for a meeting at the Tory conference with Minister of State for Digital and the Creative Industries Margot James.

Google UK & Ireland managing director Ronan Harris suggested to the minister and the delegates that too much regulation would mean less Google investment. Harris said he had two jobs. The first was “to sell” a “vision for the UK to my bosses in California.”

The Google boss gave the example of having to persuade Google’s California HQ to not worry about Brexit, and stick with plans to expand their UK staff in Kings Cross, London, from 4,000 to 7,000 . Harris said his second job is “to convince our colleagues in government what the framework should be to make that happen.”

According to James, the main “framework” is to ensure “freedom of data flows”. The message is pretty clear — regulate to stop his data flowing, and California will cut the jobs and investment. Harris said he was optimistic that the UK would remain “a voice of reason when it comes to sensible regulation” because they had in the past.

The political pressure is there for greater regulation of the tech firms, so Google is doing all it can to head it off and persuade the government to stick with “sensible,” Google-friendly policies.

Lib Dem David Laws still cosy with the Tories

THE Lib Dem-Tory coalition gave Lib Dem MPs ministerial posts, but at the high cost of seeing their party hammered at the next two elections. Despite the damage to the party, David Laws, a schools minister in the Cameron-Clegg coalition, seems nostalgic for his time with the Tories.

Laws appeared at three meetings at the Conservative Conference in Birmingham, twice with former Tory minister Lord Willetts, and once with former Tory MP Ian Carmichael.

Laws was addressing the Tory conference in his new role as head of think tank the Education Policy Institute, which is founded and funded by investor Paul Marshall.

Marshall also funded the “Orange Book,” a series of essays which brought together the more pro-market, pro-privatisation wing of the Lib Dems like Laws.

Marshall and Laws’s Orange Book Lib Dems helped make the Tory-Lib Dem coalition happen. Marshall now funds Laws’s educational think tank, which among other policies, is against the abolition of student loans. 

The Lib Dems’ reversal of their policy on abolishing student loans was key to their going into coalition with Cameron’s Conservatives, and also one of the reasons they subsequently lost so many votes.

It seems Laws has no regrets about the decisions that hurt his party. Laws’ Education Policy Institute also held meetings at the Labour Conference in Liverpool, but Laws merely lurked in the audience rather than sitting on the platform. It seems Laws is still more comfortable with Tory rather than Labour activists.

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