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Google tax avoidance is 'wrong', insists Ed Miliband Google tax avoidance is 'wrong', insists Ed Miliband
(4 months later)
Labour Leader Ed Miliband has said Google is "wrong" to avoid paying taxes on UK revenues, citing its founders' 2004 promise to forgo short-term gains in order to do good things.Labour Leader Ed Miliband has said Google is "wrong" to avoid paying taxes on UK revenues, citing its founders' 2004 promise to forgo short-term gains in order to do good things.
At an event hosted by the search giant near London, Miliband also pledged that a future Labour government would change laws unilaterally to stop "transfer pricing" by which companies such as Amazon shift profits between countries and to increase transparency about profits and revenues. Miliband called the system "crazy" and said he would also lead a crackdown on offshore tax havens.At an event hosted by the search giant near London, Miliband also pledged that a future Labour government would change laws unilaterally to stop "transfer pricing" by which companies such as Amazon shift profits between countries and to increase transparency about profits and revenues. Miliband called the system "crazy" and said he would also lead a crackdown on offshore tax havens.
He warned too that internet companies risked taking the same approach as banks had during the early part of the century, when their corporate culture meant they took a short-term approach which ignored wider effects.He warned too that internet companies risked taking the same approach as banks had during the early part of the century, when their corporate culture meant they took a short-term approach which ignored wider effects.
Speaking at the company's annual "Big Tent" event, Miliband pointed to the letter written by founders Larry Page and Sergey Brin in 2004 in which they said they would sometimes ignore short-term interests in favour of the long term.Speaking at the company's annual "Big Tent" event, Miliband pointed to the letter written by founders Larry Page and Sergey Brin in 2004 in which they said they would sometimes ignore short-term interests in favour of the long term.
Miliband read out the passage, in which Page and Brin wrote: "Don't be evil. We believe strongly that in the long term, we will be better served – as shareholders and in all other ways – by a company that does good things for the world even if we forgo some short-term gains. This is an important aspect of our culture and is broadly shared within the company."Miliband read out the passage, in which Page and Brin wrote: "Don't be evil. We believe strongly that in the long term, we will be better served – as shareholders and in all other ways – by a company that does good things for the world even if we forgo some short-term gains. This is an important aspect of our culture and is broadly shared within the company."
Referring to that, the Labour leader said: "I can't be the only person in this room who feels deeply disappointed that a great company like Google, with great founding principles, should be reduced to arguing that even though it employs thousands of people here in Britain, makes billions of pounds in revenue here in Britain, that it's fair that it should pay just a fraction of 1% of that in tax."Referring to that, the Labour leader said: "I can't be the only person in this room who feels deeply disappointed that a great company like Google, with great founding principles, should be reduced to arguing that even though it employs thousands of people here in Britain, makes billions of pounds in revenue here in Britain, that it's fair that it should pay just a fraction of 1% of that in tax."
Miliband referred to comments by Google chairman Eric Schmidt, who has previously said that Google's tax arrangements – by which "sales" are begun in the UK but "completed" in Ireland, where it pays a small corporation tax rate – are "just capitalism".Miliband referred to comments by Google chairman Eric Schmidt, who has previously said that Google's tax arrangements – by which "sales" are begun in the UK but "completed" in Ireland, where it pays a small corporation tax rate – are "just capitalism".
Miliband retorted: "I'm sorry that Eric Schmidt isn't here this morning to hear me say this directly. When Google does great things I will praise you. But when Eric Schmidt says that its current approach to tax is just capitalism, I disagree. And when when Google goes to extraordinary lengths to avoid paying its taxes, I say it's wrong. And it's not just me that says it, it's Google's founding principles, and it's crystal clear from them."Miliband retorted: "I'm sorry that Eric Schmidt isn't here this morning to hear me say this directly. When Google does great things I will praise you. But when Eric Schmidt says that its current approach to tax is just capitalism, I disagree. And when when Google goes to extraordinary lengths to avoid paying its taxes, I say it's wrong. And it's not just me that says it, it's Google's founding principles, and it's crystal clear from them."
He said that paying fair levels of taxes was important to support health, education and transport services, and was part of "responsible capitalism".He said that paying fair levels of taxes was important to support health, education and transport services, and was part of "responsible capitalism".
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