Google tax settlement: we need more transparency

Yesterday, chancellor of the exchequer Osborne deputed David Gauke to respond to an urgent question about the Google tax settlement. Whether this was a measure of how little importance he attached to the deal or of how much he feared questioning about it is unclear. Either way, the Treasury stonewalling was unsatisfactory.

The SNP's spokesman on the economy cut to the chase:

Stewart Hosie (Dundee East) (SNP): First, the diverted profits tax, set at 25%, came into effect last April. May we have the Minister’s assurance that the Google deal does not cover any of the period when diverted profits tax should have applied? Secondly, the rules on disclosed evasion are clear: tax should be paid at 100%, plus interest, plus a 30% penalty. May we have his assurance that that was rightly not applied in this case? Finally, given the difficulty the Netherlands got into with the Starbucks deal and Luxembourg got into with the Fiat deal, when the Commission insisted they recoup between €20 million and €30 million extra, should the Google deal not be put to Commissioner Vestager to ensure that it complies with state aid rules?

Mr Gauke: The United Kingdom does not engage in special deals with any taxpayer. When accusations to that effect were made before, Sir Andrew Park, a retired High Court judge, investigated them on behalf of the National Audit Office and concluded that in every case he had investigated the settlement was reasonable and the overall effect of the arrangements was good. For the very reasons I set out, I cannot comment on the individual matter beyond what is in the public domain. I do believe that there is an important principle here—that tax should be collected on the basis of the law, and that a Department that is independent from Ministers should be able to make the assessment of the right level of tax due under the law without politicians interfering in operational matters. I hope that that has the support of Members of all parties.

I find the reluctance to provide any of the detail hypocritical, given the publicity which the government gave to the Google deal over the weekend. I understand also that there were self-congratulatory tweets from treasury ministers.

Today, the socialist treasury spokesman John McDonnell voiced rumours that the French finance ministry had been rather tougher and extracted more than an effective 3% per annum tax take from the American giant company.