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Google faces grilling at public accounts committee - Politics live Google faces grilling at public accounts committee - Politics live
(35 minutes later)
10.58am GMT
10:58
Conservative MP David Mowat mockingly said it is “laudable” that Google says it wants a simpler tax system, but says the company cannot blame the UK for having a complex system because its company has a complex structure.
It wasn’t us who decided to say all our sales were booked in Dublin. It wasn’t us that decided that the ways you were going to choose to operate by using ‘the double Irish’.
You tell us you want a transparent system. Yet you use the double Irish, you use the Dutch Sandwich, you use Bermuda.
Your argument is everyone else does it so we do.
10.55am GMT
10:55
Tom Hutchinson, Google’s head of tax, is adamant that it is the tax system, not the company, which is to blame for the current row.
He’s clearly not exactly enjoying his time in front of the committee.
I would love to see the system be more simple so we won’t have to come to meetings like this and explain it, but we need the governments to work together and develop an overall worldwide system.
Updated
at 10.55am GMT
10.49am GMT
10:49
Tax came up from 'time-to-time' in meetings with ministers, Google admits
Flint draws attention to more than 20 meetings which Google had with ministers over the past five years and asks if the tax question “ever came up”.
Brittin says there has been no political involvement in the deal with HMRC. Flint and Hillier says that is not the question. Brittin says they have never sought a meeting with government over tax deals. Again, Flint said, that is not the question.
I’m sure, given the scrutiny, we’ve had that the tax issue will have come up from time to time. You’d be surprised if you didn’t given the scrutiny.
Google and government had informal chats about their tax arrangements. Wonder what was said?
Updated
at 10.51am GMT
10.43am GMT
10:43
Caroline Flint is speaking now. She asks about the remaining £112m paid in tax, because the other £18m was interest, and asks if any fines were paid. Hutchinson says not.
Flint asks if Google thinks it is a fair settlement. Hutchinson says he thinks it is, after an extensive audit. “It was higher than we paid on returns,” he said.
“So, why weren’t you paying it in the tax years during that six-year period?” Flint said.
It’s a good question, Hutchinson admitted, to some murmurings in the room.
Flint says the public will be incredulous.
The public tuning into this will be asking themselves, how can a massive company like Google, with all the expertise that it hires, how can HMRC not, in real time, tackle the problems of how you pay your tax?
Updated
at 10.44am GMT
10.37am GMT
10:37
'We have never paid a larger settlement than the one we just agreed to'
Brittin said the reports were just statements by politicians in those countries, “politicians who would like to see tax paid in proportion to sales”, rather than actual deals.
Hutchinson goes further, and says the British tax settlement is the highest ever paid.
Those are articles that are not based on facts. I can say, we have never paid, as part of an audit outside the US, we have never paid a larger settlement than the one we just agreed to.
Updated
at 10.37am GMT
10.31am GMT
10:31
Tom Hutchinson, Google’s head of tax, repeats Brittin’s point that profits Google makes from UK customers are related to the value created outside the UK, the technology of the Google search engine.
Look at the value of the substance of the values for services in the UK, what would you pay a third party? That’s what we did doing our tax returns, HMRC came back and argued that should be a higher amount, that’s what we ended up paying.
Jackson asks him whether it is true that Google have had “involved” discussions with Italy and France over their tax affairs, which Hutchinson refuses to comment on. It has been reported the web giant is set to pay the French government more than three times what it has paid HMRC.
Updated
at 10.36am GMT
10.25am GMT
10:25
Stewart Jackson, Conservative MP, called Google’s press release about how it had agreed to pay £130m in back taxes “a dead cat strategy”,
“You knew that would put pressure on the Treasure and HMRC,” he said.
Stewart Jackson accuses Google of using tax press release as a "dead cat". Dead cats have definitely jumped the shark.
He also calls the article Brittin wrote in the Telegraph, on reformation of international tax, as Google posing as “a disinterested observer”.
You have made a choice to avoid tax, and you have set up structures specifically to do so. I think there’s an element here of we are doing the UK taxpayer a favour by paying tax.
Quite frankly, if i hadn’t disclosed between 2005 to 2015 all the circumstances of my income I would be in trouble with HMRC. Why are you different?
Brittin said the audit was a way for HMRC was to understand “the nature of internet business”.
He says the heart of the matter for income tax is place where “value is created.”
Most of the value is created by the search, which is developed and built in the US, some is created by the marketing but most by the search. There are 20,000 engineers in the US, and 1,000 in the UK.
The rules require you to pay your tax based on the economic value creation.
Updated
at 10.26am GMT
10.13am GMT10.13am GMT
10:1310:13
Google’s Brittin says he wants to clarify the most recent tax bill that attracted the negative attention.Google’s Brittin says he wants to clarify the most recent tax bill that attracted the negative attention.
He says that of the £130 million it paid in back taxes, £18 million was interest and the rest is tax.He says that of the £130 million it paid in back taxes, £18 million was interest and the rest is tax.
Brittin is asked the cost of Google’s new base in Kings Cross, which he says has cost around £1bn. He insists that despite the size and cost of the building, the global operation’s headquarters are still based in Ireland.Brittin is asked the cost of Google’s new base in Kings Cross, which he says has cost around £1bn. He insists that despite the size and cost of the building, the global operation’s headquarters are still based in Ireland.
“Frankly you are taxing already my patience and the patience of the hard-working taxpayer out there,” Hillier says.“Frankly you are taxing already my patience and the patience of the hard-working taxpayer out there,” Hillier says.
UpdatedUpdated
at 10.16am GMTat 10.16am GMT
10.09am GMT10.09am GMT
10:0910:09
Meg Hillier MP is quizzing Matt Brittin, current President of EMEA Business & Operations for Google, and the exchange is already pretty testy.Meg Hillier MP is quizzing Matt Brittin, current President of EMEA Business & Operations for Google, and the exchange is already pretty testy.
We are here for taxpayers in Britain, do you hear the anger and the frustration out there, with these huge figures?We are here for taxpayers in Britain, do you hear the anger and the frustration out there, with these huge figures?
Hillier asks Brittin what he gets paid, after asking him to confirm chief executive of Google Sundar Picha, has been paid £138m.Hillier asks Brittin what he gets paid, after asking him to confirm chief executive of Google Sundar Picha, has been paid £138m.
She asks Brittin what he gets paid, and he says he will “disclose that if it’s relevant to the committee.She asks Brittin what he gets paid, and he says he will “disclose that if it’s relevant to the committee.
Hillier asks him to state it publicly, and Brittin says he must check the figuresHillier asks him to state it publicly, and Brittin says he must check the figures
“You don’t know what you get paid?” she asks, incredulous. MPs burst out laughter.“You don’t know what you get paid?” she asks, incredulous. MPs burst out laughter.
UpdatedUpdated
at 10.09am GMTat 10.09am GMT
10.04am GMT10.04am GMT
10:0410:04
Google’s evidence to the public accounts committee is due to start in the next few minutes, with the executives taking their seats now in Portcullis House.Google’s evidence to the public accounts committee is due to start in the next few minutes, with the executives taking their seats now in Portcullis House.
9.47am GMT9.47am GMT
09:4709:47
The BBC’s Norman Smith has the letter from the government’s chief negotiator, Sir David Dalton, which is the clincher for Hunt’s statement later, where he is expected to impose a new contract on junior doctors from August 1.The BBC’s Norman Smith has the letter from the government’s chief negotiator, Sir David Dalton, which is the clincher for Hunt’s statement later, where he is expected to impose a new contract on junior doctors from August 1.
Everyone’s first preference has always been for a negotiated outcome. Unfortunately this no longer seems possible.Everyone’s first preference has always been for a negotiated outcome. Unfortunately this no longer seems possible.
I therefore advise the government to do whatever it deems necessary to end uncertainty for the service [the NHS] and to make sure that the new contract is in place which is as close as possible to the final position put forward to the BMA yesterday.I therefore advise the government to do whatever it deems necessary to end uncertainty for the service [the NHS] and to make sure that the new contract is in place which is as close as possible to the final position put forward to the BMA yesterday.
Govt chief negotiator David Dalton letter to Jeremy Hunt #juniordoctors pic.twitter.com/WwheF5fjwXGovt chief negotiator David Dalton letter to Jeremy Hunt #juniordoctors pic.twitter.com/WwheF5fjwX
UpdatedUpdated
at 9.54am GMTat 9.54am GMT
9.39am GMT9.39am GMT
09:3909:39
The government’s so-called snoopers’ charter needs “significant amendments and further work,” according to a joint parliamentary committee.The government’s so-called snoopers’ charter needs “significant amendments and further work,” according to a joint parliamentary committee.
The committee were particularly critical of the proposal that internet browsing records of all citizens be stored, which it called intrusive, and said the threat to privacy outweighed the value of the data to security services.The committee were particularly critical of the proposal that internet browsing records of all citizens be stored, which it called intrusive, and said the threat to privacy outweighed the value of the data to security services.
Scrutiny committee on snoopers charter say much stronger powers and independence needed for judicial oversight commissionersScrutiny committee on snoopers charter say much stronger powers and independence needed for judicial oversight commissioners
Lord Murphy, who is chairing the committee looking at the Draft Investigatory Powers Bill, said more clarification is needed before Parliament can be assured the full implications of the bill have been thought through.Lord Murphy, who is chairing the committee looking at the Draft Investigatory Powers Bill, said more clarification is needed before Parliament can be assured the full implications of the bill have been thought through.
The committee has made 86 recommendations, including more safeguards for internet and phone data collection.The committee has made 86 recommendations, including more safeguards for internet and phone data collection.
Earlier this week, the Intelligence and Security Committee also warned that the draft bill did not have sufficient civil liberties safeguards.Earlier this week, the Intelligence and Security Committee also warned that the draft bill did not have sufficient civil liberties safeguards.
More on this later.More on this later.
UpdatedUpdated
at 9.55am GMTat 9.55am GMT
9.33am GMT9.33am GMT
09:3309:33
Here’s some background to Hunt’s statement later.Here’s some background to Hunt’s statement later.
Related: Jeremy Hunt set to impose new contract on junior doctorsRelated: Jeremy Hunt set to impose new contract on junior doctors
Junior doctors and other medics are already expressing fury at the news that the contract may be imposed.Junior doctors and other medics are already expressing fury at the news that the contract may be imposed.
I'll be calling my lawyer https://t.co/anKn0FKh7UI'll be calling my lawyer https://t.co/anKn0FKh7U
Sad to hear #jyniordoctors contract will be imposed. Hope this won't make recruitment of #juniordoctors a nughtmare and increase locum spendSad to hear #jyniordoctors contract will be imposed. Hope this won't make recruitment of #juniordoctors a nughtmare and increase locum spend
UpdatedUpdated
at 9.45am GMTat 9.45am GMT
9.28am GMT9.28am GMT
09:2809:28
An interesting line here from the Huffington Post’s Paul Waugh in his morning briefing email.An interesting line here from the Huffington Post’s Paul Waugh in his morning briefing email.
Will Hunt really impose jun doc contract, or is this one last bit of blinkmanship? WaughZone:https://t.co/Y6iuSAOJS6 pic.twitter.com/jLCGOziZ1EWill Hunt really impose jun doc contract, or is this one last bit of blinkmanship? WaughZone:https://t.co/Y6iuSAOJS6 pic.twitter.com/jLCGOziZ1E
9.19am GMT9.19am GMT
09:1909:19
Jeremy Hunt to deliver statement on junior doctors' contractJeremy Hunt to deliver statement on junior doctors' contract
Health secretary Jeremy Hunt will make a statement to the Commons on the junior doctors’ contract, after yesterday’s strike action with the BMA.Health secretary Jeremy Hunt will make a statement to the Commons on the junior doctors’ contract, after yesterday’s strike action with the BMA.
This could very well turn out to be an announcement that the government will impose the contract on doctors this summer because negotiations have failed with the BMA. If Hunt does impose the contract, the doctors may then decide to pursue legal avenues.This could very well turn out to be an announcement that the government will impose the contract on doctors this summer because negotiations have failed with the BMA. If Hunt does impose the contract, the doctors may then decide to pursue legal avenues.
He’s expected to address MPs around noon, after an urgent question by Chris Bryant on Short Money, so I’ll cover that statement as it happens after the first hour or so of Google’s appearance at the select committee.He’s expected to address MPs around noon, after an urgent question by Chris Bryant on Short Money, so I’ll cover that statement as it happens after the first hour or so of Google’s appearance at the select committee.
UpdatedUpdated
at 9.27am GMTat 9.27am GMT
9.13am GMT9.13am GMT
09:1309:13
Putin would back Brexit, says Hilary BennPutin would back Brexit, says Hilary Benn
Hillary Benn, the shadow foreign secretary is speaking now at Chatham House on “the internationalist case for Europe”.Hillary Benn, the shadow foreign secretary is speaking now at Chatham House on “the internationalist case for Europe”.
Benn campaigned against British membership at the time of the last public vote in 1975, and his father Tony Benn was and still an oft-quoted proponent of Brexit.Benn campaigned against British membership at the time of the last public vote in 1975, and his father Tony Benn was and still an oft-quoted proponent of Brexit.
Times have changed, Benn said, and he now believes British interests are best protected by being part of the EU.Times have changed, Benn said, and he now believes British interests are best protected by being part of the EU.
I have changed my view on Europe since 1975. I have been on a journey, not least because Britain has been on a journey too.I have changed my view on Europe since 1975. I have been on a journey, not least because Britain has been on a journey too.
We live in a changing world and if you look at the future challenges we face I believe the case for Europe is stronger now than ever.We live in a changing world and if you look at the future challenges we face I believe the case for Europe is stronger now than ever.
We have not lost our identity. The fact that we are not a member of the Euro nor part of Schengen shows that we can defend our national interest.We have not lost our identity. The fact that we are not a member of the Euro nor part of Schengen shows that we can defend our national interest.
Benn put national security at the heart of his speech on the benefits of remaining in the union, a subject David Cameron has also been focused in recent days.Benn put national security at the heart of his speech on the benefits of remaining in the union, a subject David Cameron has also been focused in recent days.
Let’s be clear. President Putin would shed no tears if Britain left the European Union.Let’s be clear. President Putin would shed no tears if Britain left the European Union.
He would see Brexit as a sign of our weakness and of the weakness of European solidarity at the very moment when we need to maintain our collective strength.He would see Brexit as a sign of our weakness and of the weakness of European solidarity at the very moment when we need to maintain our collective strength.
We need stronger international cooperation, not weaker. At this moment in this century, it would be an extraordinary folly to turn our back on this vitally important international alliance if we wish to help shape world events.We need stronger international cooperation, not weaker. At this moment in this century, it would be an extraordinary folly to turn our back on this vitally important international alliance if we wish to help shape world events.
Hilary Benn hits the EU security button "Putin would see Brexit as a sign of our weakness and of the weakness of European solidarity".Hilary Benn hits the EU security button "Putin would see Brexit as a sign of our weakness and of the weakness of European solidarity".
There was also a not-so-veiled dig at the ‘Out’ campaigns messaging that getting Britain out of Europe is a patriotic duty.There was also a not-so-veiled dig at the ‘Out’ campaigns messaging that getting Britain out of Europe is a patriotic duty.
There is nothing patriotic about diminishing the United Kingdom’s ability to make its voice heard by other nations.There is nothing patriotic about diminishing the United Kingdom’s ability to make its voice heard by other nations.
Narrow nationalism is not the same as patriotism.Narrow nationalism is not the same as patriotism.
And stumbling out of Europe and pulling up the drawbridge would only serve to harm our position and influence in the world.And stumbling out of Europe and pulling up the drawbridge would only serve to harm our position and influence in the world.
Hilary Benn pretty confident of a win. "I believe the British people will vote to stay in the EU."Hilary Benn pretty confident of a win. "I believe the British people will vote to stay in the EU."
9.02am GMT9.02am GMT
09:0209:02
Up at 10am, here are the Google and HMRC representatives up in front of public accounts committee chair Meg Hillier and MPs.Up at 10am, here are the Google and HMRC representatives up in front of public accounts committee chair Meg Hillier and MPs.
Matt Brittin, president, Google Europe, Middle East and AfricaMatt Brittin, president, Google Europe, Middle East and Africa
A former management consultant and commercial director at Trinity Mirror, he has been at Google since 2007. Once told by Margaret Hodge that his company was “devious, calculated and unethical”.A former management consultant and commercial director at Trinity Mirror, he has been at Google since 2007. Once told by Margaret Hodge that his company was “devious, calculated and unethical”.
Tom Hutchinson, vice president, Google Inc.Tom Hutchinson, vice president, Google Inc.
Travelling to London from Silicon Valley, he has previously told Bloomberg: “We have an obligation to our shareholders to set up a tax-efficient structure.”Travelling to London from Silicon Valley, he has previously told Bloomberg: “We have an obligation to our shareholders to set up a tax-efficient structure.”
Dame Lin Homer, chief executive and permanent secretary, HMRCDame Lin Homer, chief executive and permanent secretary, HMRC
The outgoing chief executive has clashed previously with the public accounts committee over Google’s affairs, told three years ago her tax inspectors had not been tough enough with the tech giant.The outgoing chief executive has clashed previously with the public accounts committee over Google’s affairs, told three years ago her tax inspectors had not been tough enough with the tech giant.
Other representatives from HMRC:Other representatives from HMRC:
Jim Harra, director general business taxJim Harra, director general business tax
Edward Troup, tax assurance commissionerEdward Troup, tax assurance commissioner
My colleague Simon Bowers has written an in-depth look at the questions Google and HMRC will need to answer today -My colleague Simon Bowers has written an in-depth look at the questions Google and HMRC will need to answer today -
Google’s effective global tax rate was 17% last year, yet the tax rates in its two largest markets – the US and the UK – were 35% and 20%. Why is Google not paying its fair share?Google’s effective global tax rate was 17% last year, yet the tax rates in its two largest markets – the US and the UK – were 35% and 20%. Why is Google not paying its fair share?
Is it fair for Google to use its lobbying and investment muscle to put pressure on politicians?Is it fair for Google to use its lobbying and investment muscle to put pressure on politicians?
Why do ‘expert’ sales staff in Ireland earn less than half that of marketing support staff in the UK?Why do ‘expert’ sales staff in Ireland earn less than half that of marketing support staff in the UK?
Related: Google's tax affairs: the players and questions they need to answerRelated: Google's tax affairs: the players and questions they need to answer
8.52am GMT8.52am GMT
08:5208:52
Google faces grilling at public accounts committeeGoogle faces grilling at public accounts committee
Good morning, I’m standing in for Andrew Sparrow on the live blog today, where the focus will be on Google’s evidence at the influential public accounts committee on corporate tax deals; we’ll also hear from HMRC.Good morning, I’m standing in for Andrew Sparrow on the live blog today, where the focus will be on Google’s evidence at the influential public accounts committee on corporate tax deals; we’ll also hear from HMRC.
I’ll also be monitoring the latest from Brussels as EU leaders are given the most recent draft of the reform deal being sought by David Cameron to persuade voters to remain in the EU. Hilary Benn, the shadow foreign secretary, has also pledged his support for the In campaign this morning, despite campaigning against British membership at the last public vote in 1975.I’ll also be monitoring the latest from Brussels as EU leaders are given the most recent draft of the reform deal being sought by David Cameron to persuade voters to remain in the EU. Hilary Benn, the shadow foreign secretary, has also pledged his support for the In campaign this morning, despite campaigning against British membership at the last public vote in 1975.
Elsewhere, the public administration select committee has said the Government’s English Votes for English Laws (EVEL) system is too complex, and suggested the “hostility” with which the arrangements were viewed by parties other than the Tories suggested they could end up as a “short term experiment”Elsewhere, the public administration select committee has said the Government’s English Votes for English Laws (EVEL) system is too complex, and suggested the “hostility” with which the arrangements were viewed by parties other than the Tories suggested they could end up as a “short term experiment”
And in a BBC charter review report published today by the Culture, Media and Sport Committee chaired by Jesse Norman, MPs criticised the BBC’s so-called “luvvies letter” signed by celebrities defending the corporation.And in a BBC charter review report published today by the Culture, Media and Sport Committee chaired by Jesse Norman, MPs criticised the BBC’s so-called “luvvies letter” signed by celebrities defending the corporation.
Here’s the agenda for today:Here’s the agenda for today:
08.30 Hilary Benn’s speech and Q&A on Europe at Chatham House08.30 Hilary Benn’s speech and Q&A on Europe at Chatham House
10.00 Google and HM Revenue and Customs give evidence to the Commons Public Accounts Committee on corporate tax deals.10.00 Google and HM Revenue and Customs give evidence to the Commons Public Accounts Committee on corporate tax deals.
10.00 Nick Clegg appears to give evidence at the union and party funding committee10.00 Nick Clegg appears to give evidence at the union and party funding committee
12.00 Nicola Sturgeon appears at Scottish First Minister’s Questions12.00 Nicola Sturgeon appears at Scottish First Minister’s Questions
17.45 The Prime Minister hosts a business ambassadors roundtable and reception at 10 Downing Street17.45 The Prime Minister hosts a business ambassadors roundtable and reception at 10 Downing Street
In the Commons todayIn the Commons today
Select committee reportsSelect committee reports
I’ll also post breaking political news as it happens, as well as curating some of the best analysis and reaction from the rest of the web, with a summary at lunchtime and in the afternoon.I’ll also post breaking political news as it happens, as well as curating some of the best analysis and reaction from the rest of the web, with a summary at lunchtime and in the afternoon.
I’ll try to monitor comments below the line and answer questions when I can, but it may be quicker to get me on Twitter.I’ll try to monitor comments below the line and answer questions when I can, but it may be quicker to get me on Twitter.
You can follow me or contact me there on @jessicaelgot.You can follow me or contact me there on @jessicaelgot.