Ed Miliband warns Google: I'd make you pay more tax

Google is betraying its founding principles by going to extraordinary lengths to avoid paying taxes in Britain, says Ed Miliband.

The Labour leader was addressing company executives, including Eric Schmidt, at Google’s “big tent” technology conference. His speech was uncomfortable listening for the Google delegates whose company motto is “don’t be evil”.

Mr Miliband warned executives that a future Labour government would take a far tougher unilateral line against the company if it continues to try and avoid UK corporation tax.

He said that like other great technological advances, the internet can lead to unhealthy monopolies where companies seek to profit from their domination of the market. And he made clear that “irresponsible” companies will be penalised if they fail to act in the wider public interest.

Mr Miliband said today: “In Google’s 2004 IPO prospectus, it said: ‘Don’t be evil. We will be stronger in the long term, we will be better served – as shareholders and in all other ways – by a company that does good things for the world, even if we forego some short-term gains.’”

“I can’t be the only person here who feels disappointed that such a great company as Google, with such great founding principles, would be reduced to arguing that when it employs thousands of people in Britain, makes a billion pounds of revenue in Britain, it pays just a fraction of that in tax,” he added.

In an article for the Huffington Post, Mr Miliband said he expected Google not just to act within the letter of the tax law but also within the spirit of contributing to the societies where they operate. “Even as the internet connects people across the world, footloose companies can use the global market to avoid facing up to their responsibilities. The rules that we set, the behaviour we reward, and the cultures we encourage can either help bring about a better future or ensure power and wealth is concentrated in the hands of a few.”

Addressing Google, Mr Miliband said: “Think about the wider society on which Google and all other companies depend: a health service and an education system training our young people to be the creative individuals... Google shouldn’t be going to extraordinary lengths to avoid paying its taxes. It has an obligation to wider society.”

David Cameron is due to discuss international efforts to tackle tax avoidance at an EU summit to agree a common European position ahead of the G8 meeting in London next month.