Donald Macintyre's Sketch: Don't call a spade a spade – just dig a deeper hole
Donald Macintyre writes political sketches for The Independent, having been Jerusalem correspondent since 2004, covering Israel and the Occupied Territories, as well as travelling for the paper to Iraq, Turkey, Jordan, Libya and Egypt. As Political Editor and then Chief Political Commentator, he previously covered the John Major and early Tony Blair era. He has written for the Daily Express, Sunday Times, Times and Sunday Telegraph, and Sunday Correspondent. He is the author of Mandelson and the Making of New Labour (2000).
Thursday 16 May 2013
If it looks like a duck, and quacks like a duck, it's a great-crested grebe. That's how it seems in the wacky world of tax avoidance – sorry, "tax planning" – as John Dixon, of Ernst & Young, preferred to describe it during today's grilling of his client Google by the Public Accounts Committee.
In a mesmerising act of high-wire verbal gymnastics, Google's own Matt Brittin tried – in vain – to convince Margaret Hodge's committee that the company's payment of next to no tax in the UK was justified, because it wasn't actually selling anything here.
Confronted with formidable evidence from Ms Hodge's whistleblowers that it was doing exactly that, Mr Brittin acknowledged with heroic blandness: "We employ people with sales skills. They meet customers. They encourage them to spend money… I'm sure customers will feel they are being sold to." But the "closing of transactions" was something altogether different, taking place within (low tax) Ireland.
At this point, Tory Richard Bacon's patience snapped. "The customers feel they are being sold to because they are being sold to," he shouted. "Why can't you call a spade a spade for once?"
But this question was fatally to misunderstand the euphemism-crazed semantics of international corporate finance, in which "encouraging customers to spend money" on Google ads has nothing to do with sales and in which facts are described as "data points". As in Mr Dixon's: "I'm sorry. I don't have the data points on that."
Mr Dixon was unable to supply "data points" about his firm's own dealings with Google because he couldn't discuss individual clients. It's not clear why, but accountants appear to be bound by some bizarre version of the doctors' hippocratic oath.
Asked if Ernst & Young had designed Google's nicely low-tax structure, Mr Dixon said that sometimes they did that kind of thing for their clients and sometimes they didn't. This is committee witness-ese for "That's for me to know and you to find out".
He did claim that (in general) the firm's tax "planning" advice "increasingly" took into account "reputational issues". But these play a bigger part with – say – Starbucks, whose customers can always get their coffee elsewhere. Boycotting Google is a whole lot harder. As the company well knows.
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