John McDonnell MP
The Competition Commissioner for the European Commission European Commission
Rue de la Loi / Wetstraat 200
1049 1049 Brussels
27th January 2016
Dear Ms Vestager,
I am writing to request an investigation by the Commission of the deal reached between HM Revenue and Customs and Google, as confirmed by HM Government last week.
Public concern is focused on the low sum offered by Google in lieu of taxes dating back over a decade, on the potential future damage to UK tax revenues, and on the revenues of our EU partners.
Despite requests, HM Government is refusing to publish details of the deal beyond the headline figure. We believe £130m to be significantly lower than a fair or reasonable assessment of Google’s UK turnover and profits would suggest, with experts suggesting that Google has been levied an effective tax rate of around 3%.
I am therefore requesting an investigation under EU competition law, since we are concerned that, first, the deal is arguably not compliant with State Aid rules, creating a favourable treatment for a particular company; second, that if the deal is generalised, it could constitute a serious potential threat to the ability of other EU members to levy taxes in their jurisdiction.
There is a strong public interest case in establishing the facts of the deal. I look forward to your response.
Shadow Chancellor of the Exchequer