The internet giant Google has thrown a veil of corporate secrecy around its billionaire executive chairman, putting in doubt his scheduled attendance at a meeting in Downing St tomorrow with the Prime Minister.
Eric Schmidt, a member of the elite group of global company leaders on David Cameron’s Business Advisory Group, has effectively gone to ground after Google was mauled by a Commons committee last week over how little it paid in tax despite generating billions in annual revenue.
No 10 does not know whether Mr Schmidt will attend the meeting of 16 business leaders, which includes Sir James Dyson, the founder of Dyson, Ratan Tata from the Indian company Tata, and Dick Olver, the chairman of BAE Systems.
The BBC was due to interview Mr Schmidt for its Hardtalk current affairs programme, with the presenter, Stephen Sackur, expected to chat to the Google boss about his new book The Digital Age. The corporation confirmed that Mr Schmidt had pulled out of the programme without giving a reason.
Last week Google’s head of operations in northern Europe, Matt Brittin, received a kicking from the Commons Public Accounts Committee, whose chair, Margaret Hodge, said Google “do evil” and use “smoke and mirrors to avoid paying tax”. Mr Brittan said that there was no cover-up at Google and that nothing had been illegally hidden.
The trashing of Google by the PAC, allied to recent comments from both No 10 and the Chancellor, George Osborne, that they will ensure reform of international tax rules and co-operation is high on the agenda of the G8 summit in Northern Ireland, has increased speculation that Google’s global boss is about to remove himself from Mr Cameron’s advisory group. Downing St said it was aware of no plans for the Google executive to do so.
Despite Google’s media team saying the company never disclosed its executive chairman’s diary, over the next week Mr Schmidt is in England, where he will have to run a gauntlet of public appearances linked to publicity for his book.
On Monday and Tuesday he will be at the Grove hotel in Hertfordshire for his company’s annual “Big Tent” event, where invited guests will use “Chatham House” rules of confidentiality to discuss behind closed doors the global changes wrought by digital technology and how innovation will effect future generations.
Alberto Gonzales, the former US attorney general, Alec Ross, Hillary Clinton’s State Department innovation adviser, Arkady Dvorkovich, an aide to President Putin in Moscow, and the Swedish foreign affairs minister, Carl Bildt, are among the guests. The Labour leader, Ed Miliband, is scheduled to speak at a public session of the conference on Wednesday.
Sources close to Mr Cameron have suggested that any decision by Mr Schmidt to ditch Downing St in favour of his own company’s global summit will not go down well, given the background noise in Whitehall over Google’s tax bill. Mr Schmidt is also due to attend the Hay book festival next week, although his BBC pull-out now puts that in doubt.
Ahead of the G8 gathering at Loch Erne, No 10 emphasised that the UK government would lead a global call for “strong international standards to make sure that global companies pay the tax they owe.”
Though Google was not mentioned by name, the comments from No 10 build on the PAC’s political attack which branded Google “devious, calculating and unethical” over the £6m it paid in corporation tax in 2011 despite generating more than £3bn in overall income in the UK alone.
The exposé of Google’s tax affairs, coming after revelations that Amazon also paid a fraction of its profits in corporation tax, have increased the perception that HMRC is, as one government source put it, “operating by 20th-century tax rules that need to be urgently updated”.
Although the tax affairs of other companies such as Apple, Microsoft and Starbucks have been scrutinised by the UK taxman, Mr Cameron recently wrote to the President of the European Council, Herman Van Rompuy, that “the loss of revenue resulting from tax evasion and aggressive avoidance is staggering”.
Following Starbucks’ statement over its UK tax affairs and its promise to pay the Exchequer an additional £20m, there was an expectation that Google could engage in a similar exercise in public contrition.
That now appears unlikely. The company told The IoS there would be no change to Mr Brittin’s account to the PAC and “there are no plans to follow Starbucks”.
In a further development today, a former Google executive accused the firm of running an 'immoral' tax avoidance scheme for the past decade.
Barney Jones, 34, who worked at the company between 2002 and 2006, told The Sunday Times: “The real victims are ordinary taxpayers in Britain who are being cheated by Google.
They don't have the means to hire accountants to pretend they make their money in Ireland, Bermuda or the British Virgin Islands.”
He claimed he was ready to hand over more than 100,000 emails and documents to HMRC.
Peter Barron, Google’s director of external relations, told the paper: “These questions relate to Google’s business in the UK going back a decade or more.
“None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.”
The Google players called to account
Born 1 December 1968 in Surrey. 6ft 3in. Educated Hampton School, Middlesex, University of Cambridge and London Business School. Three times Cambridge Blue. Bronze medal in 1988 World Rowing Championships. Joined Google 2007, managing director from 2009. Previous non-executive director of Sainsbury’s (2011). Owns a microdog called Wilf. Dinghy sailor. (Joint) Guinness world record holder in Greek dancing (2008) and beatboxing (2011). Married Katherine Betts in 1995. Two sons (born 1999 and 2001). Cycled Land’s End to John O’Groats for charity (2011).
Born 27 April 1955 in Washington DC. 138th richest person in the world, 45th richest in America, worth $8.2bn (Forbes 2013). Previously married to Wendy Boyle, co-founder of Schmidt family foundation charity. Two daughters, Sophie and Allison. Divorce cost $1.5bn, second most expensive divorce in history. Has homes in Atherton and Montecito, both California. Owns a $70m yacht (the ‘Oasis’). Trained commercial pilot, owns a $42m Gulfstream V Jet. Recent girlfriends include concert pianist and composer Chau-Giang Nguyen and Lisa Shields, of the US Council on Foreign Relations.
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