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David Cameron: No government has done more to crack down on tax avoidance

Published 27/01/2016

David Cameron has defended Google's controversial £130 million tax deal
David Cameron has defended Google's controversial £130 million tax deal

David Cameron has insisted he has done more than any other prime minister to crack down on aggressive tax avoidance amid controversy over Google's £130 million tax deal.

Mr Cameron blamed Labour for failures in collecting taxes from large multinationals after Jeremy Corbyn pressed him on Google's settlement wiht HM Revenue & Customs (HMRC).

Mr Corbyn said the internet giant made £6 billion profits in the UK between 2005 and 2015, the period covered by the deal, claiming it was paying an effective tax rate of 3%.

Mr Cameron replied: "Let's be clear what we're talking about here, we're talking about a tax that should have been collected under a Labour government, raised by a Conservative Government, that's what we're talking about.

"I do dispute the figures that you give, it's quite right this is done independently by HMRC.

"But I am absolutely clear that no government has done more than this one to crack down on tax evasion and aggressive tax avoidance.

"No government, and certainly not the last Labour government."

Mr Corbyn highlighted the mixed messages from the top of the Tory Party over the deal, with Chancellor George Osborne initially describing it as a "major success" before No 10 rowed back, calling it a "step forward", while Boris Johnson labelled it "derisory".

During Prime Minister's Questions, the Labour leader added: "What exactly is the Government's position on this 3% rate of taxation?"

Mr Cameron then went on to explain the measures the Government has put in place to tackle tax avoidance and evasion before claiming the tax rate for Google under Labour was "0%".

The PM said: "We have put in place the diverted profits tax that means that this company and other companies will pay more tax in future.

"And more tax in future than they ever paid under Labour, where the tax rate for Google was 0%, that is what we face.

"Let me tell you what we have done - we have changed the tax laws so many times that we raised an extra £100 billion from business in the last parliament.

"When I came to power banks didn't pay tax on all their profits - allowed under Labour, stopped under the Tories.

"Investment companies could cut their tax bill by flipping the currency their accounts were in - allowed under Labour, stopped under the Tories.

"Companies could fiddle accounting rules to make losses appear out of thin air - allowed under Labour, stopped under the Tories.

"We've done more on tax evasion and tax avoidance than Labour ever did.

"The truth is you are running to catch up but you haven't got a leg to stand on."

In a week when people are filling in their tax returns, they will be thinking there is one rule for big multinationals and one rule for small businesses and self-employed workers, Mr Corbyn insisted.

The Opposition leader also pointed to a series of meetings Google has had with Government ministers.

"Millions of people are this week filling in their tax returns to get them in by the 31st," he said.

"They have to send the form back, they do not get the option of 25 meetings with 17 ministers to decide what their rate of tax is.

"Many people going to their HMRC offices or returning them online this week will say this - 'Why is there one rule for big multinational companies and another for ordinary, small businesses and self-employed workers?'"

Mr Cameron brushed off the criticism, claiming Mr Corbyn and shadow chancellor John McDonnell do not stand up to anyone and that they had "met a bunch of migrants in Calais and said they could all come to Britain".

Mr Corbyn this week described the conditions in refugee camps in northern France as "disgraceful" after visiting Dunkirk.

Mr Cameron told him: "All those people filling in their tax returns are going to be paying lower taxes under this Government, that is what's happening.

"And I have to say to you, you can if you want criticise HMRC but HMRC's work is investigated by the National Audit Office and when they did that they found that the settlements that they have reached with companies are fair, that is how it works.

"The shadow chancellor's pointing - the idea that those two right honourable gentlemen would stand up to anyone in this regard is laughable.

"Look at the record over the last week - they met with the unions and they gave them flying pickets.

"They met with the Argentinians, they gave them the Falkland Islands.

"They met with a bunch of migrants in Calais, they said they could all come to Britain.

"The only people they never stand up for are the British people and hard-working taxpayers."

Earlier, Mr Corbyn asked his customary question from a member of the public, saying a working 30-something called Jeff had asked whether he could pay the same tax rate as Google and other large corporations.

"What do you say to Jeff?" he asked.

But Mr Cameron criticised the last Labour government, highlighting the lucrative corporate links former prime ministers Tony Blair and Gordon Brown now enjoy alongside former chancellor Alistair Darling.

He said: "What I say to Jeff is that his taxes are coming down under this Government and Google's taxes are going up under this Government."

Mr Cameron went on: "If like me, you are genuinely angry about what happened to Google under Labour, can I tell you a few people you could call?

"Maybe you should start by calling Tony Blair - you can get him at JP Morgan.

"Call Gordon Brown - apparently you can get him at a Californian bond dealer called PIMCO.

"You can call Alistair Darling - I think he's at Morgan Stanley but it's hard to keep up.

"Those are the people to blame for Google not paying their taxes, we're the ones who got them to pay."

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