John McDonnell MP Blog Headlines
Phillip Inman Economics correspondent, the Guardian 4 February 2016
George Osborne’s claim that the government secured a major corporation tax deal with Google appear to be unravelling after it emerged that a quarter of the £130m recovered by HM Revenue & Customs related to the US company’s share options scheme.
Filings by Google’s UK subsidiary show that £33m of the funds paid to the Treasury followed a wrangle over share options handed to staff, which the US business had argued were exempt from UK tax.
The company’s accounts show that the government was only able to claw back less than £100m in corporation tax from Google for the 2005-2014 period, and not the £130m the chancellor claimed. MPs and foreign governments have criticised the deal for allowing Google to generate billions of pounds in profits from its UK business and pay little corporation tax.
The Treasury select committee said last week that it would examine the deal, while several ministers have conceded that the outcome of the tax dispute was disappointing. John McDonnell, the shadow chancellor, said there was an important distinction between a settlement for unpaid corporation tax based on Google’s profits and the need to pay tax on share options for staff.
He said the low rate of corporation tax paid by Google, which was already “totally unacceptable”, needed to be independently examined. “If true, this is truly shameful behaviour by the chancellor. He dressed this deal up as a ‘major victory’, when in reality it was a defeat,” McDonnell said.
“It adds weight to...
John McDonnell challenged the Conservatives to take a more open and transparent approach to dealing with the crisis over tax avoidance by large multinationals. in the Chamber on Wednesday.
Following the missed opportunity to use the EU negotiations as a way to get a deal on tax avoidance across Europe, John McDonnell MP, Labour’s Shadow Chancellor, wants the government to release the full details of their deal with Google, and to fully back making publicly available country-by-country-reporting (CBCR).
In an Opposition Day debate in the House of Commons on Wednesday he called on the Chancellor George Osborne to back Labour’s plan and force a vote in Parliament.
Labour’s Shadow Chancellor, John McDonnell MP, said:
“The past fortnight has shown that the Chancellor has missed an opportunity to not only restore public faith in our tax system, but he has also missed a major opportunity to strike a deal across the Europe on tax avoidance.
“The Chancellor could have used these negotiations to get EU wide agreement on making publicly available country-by-country-reporting by big multinationals, so that we get proper transparency of these tax deals.
“The truth is that you cannot trust the Tories when it comes to tax avoidance, because they say one thing in public and another in private. Only at the weekend we found that they were secretly telling their MEPs to oppose tax avoidance measures in Brussels while in Westminster pretending to care.
“Today’s debate offers George Osborne a real chance to stop blocking important reforms so that we can now start to begin to deal with the crisis of tax avoidance and achieve a...
The controversial appointment is paying dividends for Jeremy Corbyn, asserts Liam Young.
From the moment Jeremy Corbyn selected John McDonnell to be his shadow chancellor there have been many rumblings both inside and out of the Parliamentary Labour Party. The press lambasted him as even more left wing than the leader himself. Vocal members of the PLP had called on Jeremy to appoint Angela Eagle to the role so as to balance the shadow cabinet both politically and by gender. However the last week has vindicated Jeremy’s decision. McDonnell has not just outperformed expectations held over him by the naysayers, but he has also begun to establish a vision for a new British economy.
This run of form began on 18 January with the announcement of ‘the new economics tour’. The first talk took place last week alongside Mariana Mazzucato who is a member of McDonnell’s economic advisory board, also made up of heavyweight economists Thomas Piketty and Joseph Stiglitz. Not only did the announcement ensure some good news for Labour’s economic credibility by showing the party backed by respected economists, but it also showed some real direction. McDonnell’s speech at the Co-Operative conference confirmed this sense of direction. In proposing a ‘right to own’ the Shadow Chancellor, all too aware of Labour’s previous failure to form a coherent economic vision, began to stress core components of his new economic approach.
However it is McDonnell’s handling of the on-going Google tax fiasco that has proven his competence for the position not just of shadow Chancellor, but Chancellor of the Exchequer. A the weekend McDonnell published his tax return as he had promised and asked Osborne to do the same. I think it is rather unlikely that the millionaire Tory chancellor will agree to the request, but...
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