Google boss Eric Schmidt hits back at Ed Miliband and vows to invest in UK even if it has to pay more tax

Labour leader had claimed US company was going to 'extraordinary lengths to avoid paying its taxes'

Whitehall Editor

Google will continue to invest in UK even if the company is forced by law to pay more tax, the company's chairman Eric Schmidt said yesterday, claiming "we love you guys too much".

Responding to an attack by Ed Miliband, who claimed Google was going to "extraordinary lengths to avoid paying its taxes", Mr Schmidt said tax was a matter for Governments and not companies.

But he admitted that the current system "doesn't make sense" and said claimed Google fully backs the public debate on reform.

Speaking during a Q&A at the Google Big Tent event following Mr Miliband's speech at the same event which he did not attend, Mr Schmidt suggested that Google would never use its investment in the UK as a threat to avoid paying taxes.

"Google will continue to invest in the UK, no matter what you do, because the UK is too important to us," he said. "We love you guys too much."

He added: "All of us are operating in a very, very longstanding tax regime which was set up for various reasons that don't necessarily make sense to me or anyone else. But they are the way the global tax regime works."

He added: "I can't defend an irrational (tax) structure - a computer engineer would not have designed this."

Addressing Mr Miliband's assertion that Google was betraying its founding principle "not be evil" Mr Schmidt said: "We are trying to do the right thing. We are not trying to do the wrong thing.

"We completely endorse the idea of having a big debate at the G8, the G20 and so forth and so on. People have to sort this out."

But he added that international agreements should not see multinational companies "getting triple or quadruple-taxed".

It also emerged yesterday that Deputy Prime Minister Nick Clegg challenged Mr Schmidt about his company's tax bill when he attended the Prime Minister's Business Advisory Group in Number 10.

While David Cameron, who was also at the meeting, was careful not to single Google out Mr Clegg revealed he made clear to Mr Schmidt that at a time of austerity companies must "pay their fair share" and highlighted that Google was now learning how the public reacts to revelations of aggressive tax avoidance.

The criticism came after reports that Google paid only £10 million in corporation tax in the UK between 2006 and 2011, despite revenues of £11.9 billion.

The Deputy Prime Minister said: "My overall approach to tax is the obvious one. I put this directly to Eric Schmidt from Google and other business leaders at a meeting in Downing Street a couple of days ago.

"We are bringing the tax burden on corporations down by lowering the rate of corporation tax but in return people have to pay their fair share.

"What we can do and what we are doing, absolutely at the core of our G8 agenda, is to say we have got to ensure the rules apply more evenly across the piece so companies can't play cat and mouse with the tax system."

Aides said Mr Clegg was 'polite but firm' in the conversation.

In his speech to the Google big tent event Mr Miliband said: "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. This is an important aspect of our culture and is broadly shared in the company".

"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 billions of pounds of revenue in Britain, it pays just a fraction of that in tax.

"So when Google does great things for the world, as it does, I applaud you but when Google goes to extraordinary lengths to avoid paying its taxes, I think it's wrong."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
A poster by Durham Constabulary
news
Arts and Entertainment
books New York Times slammed over summer reading list
Sport
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
music
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine