Sweetheart Tax Deals Must End


Keen to extend his honeymoon period and dampen fears that austerity might not be the best way forward, a fresh faced David Cameron used his first speech as Prime Minister at the Conservative Party Conference (2010) to reiterate claims that the people of the UK were “all in it together”.


This was an early heyday of political tosh and sound-bites from Mr Cameron; bringing us such classics as the ill-fated ‘Big Society’ and calls for us to ‘hug a hoodie’. Of course, the notion that we were ever ‘all in it together’ was quickly dispelled, as the Coalition and, more recently, an emboldened UK Conservative Government, set about selling off public assets, slashing public spending and jobs, privatising services and removing assistance from those most in need. All of this was against a backdrop which saw the richest and most powerful financial organisations in the world bailed out to the tune of billions, as a result of their own malpractice and ineptitude.


There can be no question that the financial position of the UK was – and remains – far short of what should be expected in a country as potentially prosperous, advanced and well educated as ours. It is evident that the economy was woefully mismanaged during the Labour Brown/Blair years and a new approach had to be taken to tackle spiralling debts and deficits.


The SNP has – for several years now – opposed austerity and put forward alternative proposals by which the deficit could be reduced. Nonetheless, despite our opposition, one could at least see where Mr Cameron was coming from if he genuinely attempted to spread pain across society and ensured that those with the broadest shoulders were also forced carried their fair share of the burden.


Predictably, this did not happen and, whilst raiding the pockets of the poorest in our society, Mr Cameron’s government – in which 23 of the 29 member Cabinet were worth more than £1 million – immediately set about reducing the tax rate for those earning more than £150,000.


Whilst evidently not wishing to raise extra money from the most prosperous individuals in the UK, the government could always have attempted to raise – or at the very least collect – the appropriate rate of tax from our largest and wealthiest corporations. However, as we saw last week, little progress was made on this front either.


Chancellor George Osborne hailed, as a “major success”, the agreement reached with internet giant Google to pay £130 million of overdue tax to the Treasury. Remarkably, this was paid on profits of £4.6 billion – representing a meagre tax rate of barely 3%. This is way short of the current corporation tax of 20%.

Depressingly, this is yet another example of Her Majesty’s Revenue and Customs (HMRC) letting a major company off the hook in terms of paying its fair share.


In a long running investigative case, satirical magazine, Private Eye, seemingly exposed dodgy dealings at the very top of HMRC whereby multinational corporations had billions in outstanding taxes written off over expensive lunches, all without HMRC lawyers being consulted.


The whole process by which HMRC pursues corporate tax cases is complex and shrouded in mystery, allowing plenty of room for manoeuvre, both from tax officials and the corporations. This is all hugely infuriating to ordinary taxpayers who work hard and pay in to our society, and it simply cannot go on. In the interests of transparency, this matter must be examined by EU’s Commissioner, Margarethe Vestager. Indeed, following representations made by the SNP, she is said to be actively considering undertaking such an examination.


The Google case goes back some 10 years, so to receive some reimbursement for the taxpayer is obviously a step forward from the New Labour years in which many of these companies paid nothing at all. Indeed, the UK Government is now slowly waking up to some of the tricks employed by creative corporate accountants and placing some obstacles in the way. It is clear that they must go further still, closing down even more tax loopholes and bringing much needed transparency to the decision making processes in HMRC. Only then could anyone be sold bold as to claim that we are “all in it together”.

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