Margaret Hodge was welcomed back to her regular and unscrutinised place on the BBC Radio 4 Today programme this morning, to continue the tax avoidance witch hunt with an attack Google for having the temerity to structure its business in such a way as to minimise its tax liabilities.
The tired old line that HMRC should investigate Google, for doing something Hodge accepts is within the law, was trotted out by the tired old hypocrite as red meat for the spittle flecked trade unionists, those who expect to be kept by the productive part of the economy and some smaller businesses that due to their domestic nature are unable to benefit from transfer pricing and structuring their activities across different jurisdictions.
It is increasingly annoying to see individuals and companies being demonised for taking legally compliant steps to keep as much of their money as they possibly can rather than fork it over to the government, as various politicians and talking heads are rolled out to declare this has ‘cost’ the ‘country’ money, often suggesting that others will have to make up the shortfall or ‘services’ will need to be cut.
Hodge did it again today declaring Google’s actions ‘cost’ the country money and that they are not paying their ‘fair share’. Firstly, it is not the country’s money to begin with and secondly, Google’s actions have not incurred a single penny of state expenditure so there is no cost. The only ‘cost’ to the taxpayer will be any ministry activity stemming from demands for waste-of-time ‘investigations’ into activity that is legal under EU law. However, should the companies feel pressured into paying more tax than they are required to do under the law, there is likely to be a cost to customers of those businesses which would probably increase prices to preserve its margins to satisfy returns for entrepreneurial owners and investors.
But what is most annoying is the unchallenged platform afforded to idiots like Hodge which sees her given a free pass to make her ridiculous assertions.
Not once has a single interviewer on national TV or radio, speaking to these people of prestige, ask them to qualify their claims that money not taken from people is a ‘cost’, much less justify why exactly the government needs all this money to begin with and detail what it is spent on.
Not once have they challenged them to explain why the amount taken from us keeps increasing but the scope and delivery of services is continually reducing.
Not once have they demanded an answer about why discretionary spend on non-essential bribes and whims seems to continue unimpeded and only the essential services government should be focussing on are affected by downward changes in spending allocation. Make no mistake, spending by the government is still rising, fuelled by increased taxes from a growing workforce and dangerously irresponsible levels of borrowing. This witch hunt is a deliberate ploy to distract us from the government’s abuse of our hard earned money.
Taxation is necessary to fund essential infrastructure and services. Taxation laws should be clear and simple. The amount of tax taken from individuals and companies should be kept the the minimum necessary to provide only essential infrastructure and those services that safeguard the vulnerable in our society and those in need of a hand up.
But taxation is abused by the government, which gets involved at great cost in matters that should be none of the government’s business. Government abuses taxation to bribe voters and further vaguely ideological ends by confiscating our money and redistributing it in a deliberate effort to make people dependent on the state while restricting our power and ability to choose for ourselves the most beneficial ways the money can be spent to support our families. Dressing up this witch hunt as being in the interest of the British people is disgraceful.
While government continues to use taxation as a tool of coercion and to further its own interests at the expense of ours, every single legal loophole that enables an individual or a company to reduce the amount of tax for which we are liable is not just appropriate, it is imperative.
Autonomous Mind 
It wouldn’t be so bad if Hodge was pointing out that this is one of the inevitable consequences of being a ‘Member’ of the EU and vigorously campaigning to get out.
Perhaps the Beeb should point that out?
Don’t hold your breath.
Well said AM. Perhaps it is to be hoped the govt realise they are already over-taxing people and companies so the only way to increase revenue is to falsely “shame” us into giving more to support their continued mismanagement of the economy and spending.
However this will be true just after pigs start flying. This approach has cross-party support and is more likely to be a pre-curser to higher taxes and more legislation, justified on the grounds of greed and envy.
Does anyone else remember the HoC vote shortly after Cameron took office that closed down some offshore loopholes but that specifically excluded MPs from the measures? I would love to get hold of the detail again. It was buried in the press but such a measure that treats MPs differently to citizens should be given publicity again at this time. This is the EU-type behaviour should not be allowed in the UK at all.
Martin, if there’s one headline that bien-pensants would like to see obscured by witch-hunts like this, it’s the news of the closure of the Greek state broadcaster.
Perhaps it’s understandable that the BBC doesn’t want to upset its paymasters just now…
Well Done AM, I said the same in Huff post. we really must get together & hammer these idiotic MPs Like Hodge. She dosn’t know what she is talking about. We need to INVESTIGATE The MPs & see what qualifications they have for making up their lies & MYTHS
I agree but I would go further.
What is the point of these well-paid committees displaying their ignorance while they grill very well paid CEOs who also seem to be remarkably ignorant about the organisations that they are ‘responsible’ for?
Want to know why the BBC’s digital project failed? Get someone who knows about IT and someone from the BBC that knows their USB stick from their hard drive, don’t go all macho about how you will haul Thompson back across the Atlantic.
These select committees don’t understand the technical language of any subject. Take ‘value for money’. It doesn’t mean a ‘bargain’ to the civil service, it means they followed the procedure that according to the manual ‘assures’ value for money.
Many moons ago Lord Weinstock was quizzed about the production of ‘integrated circuits’ (i.e. the complicated silicon things) he assured the committee that his company manufactured all of the ‘printed’ circuits (the simple copper wiring) that they used. The committee was satisfied and Weinstock must have laughed all the way home.
All costs and taxes on production accumulate down the supply chain to be finally paid out of consumers’ cash which necessarily supports the entire economy. Even food prices, supposedly tax free, contain hidden taxation this way.
Government deliberately avoids taxing the end consumer directly to the full extent necessary as this would expose the horrendous real tax burden of 50p in every pound spent by each consumer on average. Instead it discreetly collects tax by inflating the costs of goods and services using a variety of so-called taxpayers in the supply chain, who are selected to provide another means to funnel consumers’ money to the Treasury. The great thing is that these ‘taxpayers’, ardently believe that they pay their fair share of taxation in the process. What better scheme could politicians devise to fool voters about who pays tax, by how much and when, in order to gain political advantage and hide the colossal cost of the state? How happy they are to watch consumers fall for the common party line and blame corporations for not always extracting and forwarding (from consumers’) the desired amounts of tax to government.
Good post. Other questions that should be put to these politicians are “Why do you suppose companies do this kind of thing? Are you, as government, not failing in your duty to the country if companies are deliberately paying their taxes to other countries because ours are deemed too high? Should we not be listening to the likes of Google in order to see how we could get them to broaden their base in this country (i.e. by lowering our taxes)?”
It seems that whenever the issue of Google, Amazon etc is raised in the MSM they talk of the UK missing out on millions in tax, what they fail to appreciate is that the taxable sum is taxed elsewhere, in the case of Google it is paying up in Ireland, there is not tax avoidance it is more like tax preference… which is very understandable.
So in broad terms, having had many years to address the loss of tax revenue through the use of ‘permanent establishment’, by Google et al HMRC are culpable. The irony is, that it is but another subsidy to our chums in Eire, they receive all the dues from Google that we are missing.
An obvious case for establishing a low tax economy!
When taxes are high, commerce contracts, and the government gets less than it expected.
When taxes are low, commerce booms and the government gets more than it expected.
The amounts are about the same.
Pick one.
I sense that Google and the like are going to be made a scapegoat for our governments incompetence and waste. Just like the banks are blamed for the financial crises when the government via its watchdog (sic) which deliberately used soft touch regulation.
They have no shame.
The argument for a single tax rate applicable to everything and everyone gets harder to ignore.
“government continues to use taxation as a tool of coercion and to further its own interests at the expense of ours”. This is the nub of the problem. The government IS OUR government, or it is nothing, or worse, the people’s enemy. There ARE NO interests the government should have that are not OUR interests, or something is very wrong.
Alan Douglas
Not even to mention the fact that Hodge is herself a most colossal hypocrite, hiding, as she does, a vast income from her family business in various tax-efficient (and no doubt entirely legal) trusts, havens, and other such shenanigans.
Why does nobody call her out on this?
I find it extremely amusing the amount of time and money spent avoiding taxation.
Maybe not so amusing when you consider that those operating the schemes lower their costs to such an extent that they gain massive advantage over those not using such aggressive measures to avoid taxation.
“double-Irish”, “Dutch sandwich” (“If the two Irish holding companies are thought of as “bread” and the Netherlands company as “cheese”, this scheme is referred to as the “Dutch sandwich”.The Irish authorities never see the full revenues and hence cannot tax them, even at the low Irish corporate tax rates. There are equivalent Luxembourgish and Swiss sandwiches”)
(https://en.wikipedia.org/wiki/Double_Irish_arrangement)
The major problem with google looks to be that they actually [allegedly] make the sales in the UK, not, as they say, in the Irish republic. If true, that would be tax EVASION and not the [arguably] legal tax AVOIDANCE.
Other companies, such as a fruity US company, seem to run schemes that avoid tax anywhere….nice work if you can get it, or not get it, or get it everywhere and nowhere ?