Sometimes in politics, all you need is luck. Jeremy Corbyn has not had much of it in his first four months as Labour leader. To the frustration of his closest allies, events such as the Paris terrorist attacks and the looming decision on the Trident nuclear weapons system, have fixed the spotlight on national security rather than economic issues.
Sticking to his long-held principles on foreign and defence matters has not made it easy to reach out beyond Labour’s new tribe. But his luck may now be changing. Another article of faith for Mr Corbyn and John McDonnell, the shadow Chancellor, may now work to their advantage and finally get them a positive hearing from the public. Both were advocates of “tax justice” long before it became fashionable. So the Government’s sweetheart deal with Google, under which the US tech giant will pay a mere £130m of tax for the last 10 years, is a much-needed gift to Mr Corbyn.
George Osborne played into Labour’s hands by mishandling the row. A week ago, Google leaked the deal selectively and late at night to try to secure favourable coverage, a foolish move bound to provoke other media outlets into attacking it. In a tweet just after midnight, the Chancellor hailed it as a “victory.” When the agreement came under fire, the Treasury argued it was not a political decision but one struck by HM Revenue and Customs (HMRC); but it couldn’t have it both ways.
Conservative MPs who are not among the “FOGs” (Friends of George) signed up to his campaign to succeed David Cameron, claimed the Chancellor revealed his three weaknesses – being too clever by half, out of touch and lacking political judgement. “This cosy deal is toxic for us,” one groaned. The timing was awful, as people completed their tax return by the 31 January deadline. (“I found my inner peace when I did my tax return,” says HMRC’s advert. But the Google saga is more likely to make taxpayers’ blood boil). And Tory MPs saw the danger of alienating the party’s natural supporters among small businesses by appearing in thrall to the big multinationals. The small firms know that Google is the tip of an iceberg, with many others like Apple, Starbucks, Amazon, and Facebook, sticking to the letter rather than spirit of the law.
Although the Treasury was careful not to brand its Diverted Profits Tax (DPT) a “Google tax,” I don’t remember it complaining about the headlines which called it that. We now have the bizarre spectacle of Google not paying the “Google tax”, since the £130m payment is outside the DPT. Downing Street and the Treasury denied reports that the back tax amounted to a tiny 3 per cent of Google’s UK profits, saying the media was confusing profits with turnover. But they would not disclose any more of the deal and so had to take the attacks on the chin. I suspect that Mr Cameron and Mr Osborne, their eyes on the prize of attracting big firms to Britain through low corporation tax, took their eyes off the damage the Google story would do them in the Dog and Duck.
The public will surely be bemused that a company which employs 2,300 people in the UK, generates an estimated £4.6bn of sales here and will build a spanking new London HQ for 5,000 workers, has still not been classed by the Government as having a “permanent” taxable presence. This means it can route its sales through Ireland, the Netherlands and Bermuda to keep its tax bill to the minimum. Google is acting within the law, which does not tax profits or sales in any one country but the value added in it, so it is the politicians who need to change the rules.
The most ridiculous claims made about Jeremy Corbyn
The most ridiculous claims made about Jeremy Corbyn
1/11 He called Hezbollah and Hamas ‘friends’
True. In a speech made to the Stop the War Coalition in 2009, Mr Corbyn called representatives from both groups “friends” after inviting them to Parliament. He later told Channel 4 he wanted both groups, who have factions designated as international terror organisations, to be “part of the debate” for the Middle East peace process. “I use (the word ‘friends’) in a collective way, saying our friends are prepared to talk,” he added. “Does it mean I agree with Hamas and what it does? No. Does it mean I agree with Hezbollah and what they do? No.”
2/11 ‘Jeremy Corbyn thinks the death of Osama bin Laden was a tragedy’
Partly false. David Cameron used this as a line of attack at the Conservative Party conference but appears to have left out all context from Mr Corbyn’s original remarks. In an 2011 interview on Iranian television, the then-backbencher said the fact the al-Qaeda leader was not put on trial was the tragedy, continuing: “The World Trade Center was a tragedy, the attack on Afghanistan was a tragedy, the war in Iraq was a tragedy.”
3/11 He is ‘haunted’ by the legacy of his ‘evil’ great-great-grandfather
False. A Daily Express exposé revealed that the Labour leader’s ancestor, James Sargent, was the “despotic” master of a Victorian workhouse. Addressing the report at the Labour conference, Mr Corbyn said he had never heard of him before, adding: “I want to take this opportunity to apologise for not doing the decent thing and going back in time and having a chat with him about his appalling behaviour.”
4/11 Jeremy Corbyn raised a motion about ‘pigeon bombs’ in Parliament
This one is true. On 21 May 2004, Mr Corbyn raised an early day motion entitled “pigeon bombs”, proposing that the House register being “appalled but barely surprised” that MI5 reportedly proposed to load pigeons with explosives as a weapon. The motion continued: “The House… believes that humans represent the most obscene, perverted, cruel, uncivilised and lethal species ever to inhabit the planet and looks forward to the day when the inevitable asteroid slams into the earth and wipes them out thus giving nature the opportunity to start again.” It was not carried.
5/11 He rides a Communist bicycle
False. A report in The Times referred to Mr Corbyn, known for his cycling, riding a “Chairman Mao-style bicycle” earlier this year. “Less thorough journalists might have referred to it as just a bicycle, but no, so we have to conclude that whenever we see somebody on a bicycle from now on, there goes another supporter of Chairman Mao,” he later joked.
6/11 'Jeremy Corbyn will appoint a special minister for Jews'
False so far. The Sun report in December was allegedly based on a “rumour” passed to the paper by a Daily Express columnist who has written pieces critical of the Labour leader in the past. The minister did not materialise in his shadow cabinet.
7/11 ‘Jeremy Corbyn wishes Britain would abolish its Army’
False. Another gem from The Sun took comments made at a Hiroshima remembrance parade in August 2012 where Mr Corbyn supported Costa Rica’s move to abolish it armed forces. “Wouldn’t it be wonderful if every politician around the world…abolished the army and took pride in the fact that they don’t have an army,” he added. The caveat that “every politician” must take the step suggests Mr Corbyn does not support UK disarmament just yet.
8/11 Jeremy Corbyn stole sandwiches meant for veterans
False. The Guido Fawkes blog claimed that the Labour leader took sandwiches meant for veterans at at Battle of Britain memorial service in September but a photo later emerged showing him being handed one by Costa volunteers, who later confirmed they were given to all guests.
9/11 He missed the induction into the Queen’s privy council
True. After much speculation about Mr Corbyn’s republican views and willingness to bow to the monarch, his office confirmed that he did not attend the official induction to the privy council because of a prior engagement, but did not rule out joining the body.
10/11 Jeremy Corbyn refuses to sing the national anthem.
Partly true. The Labour leader was filmed standing in silence as God Save the Queen was sung at a Battle of Britain remembrance service but will reportedly sing it in future. Mr Corbyn was elusive on the issue in an interview, saying he would show memorials “respect in the proper way”, but sources said he would sing the anthem at future occasions.
11/11 He is a member of the All-Party Parliamentary Group for Cheese
True. The group lists its purpose as the following: “To increase awareness of issues surrounding the dairy industry and focus on economic issues affecting the dairy industry and producers.”
Mr Cameron and Mr Osborne will no doubt point to their DPT and their backing for new global rules through the Organisation for Economic Co-operation and Development. But instinctively they prefer a competitive advantage to serious action on an EU-wide level, which they are blocking.
This creates an opening for Labour on an issue on which, unlike foreign affairs and defence, the party is united. The Google row, which is far from over as the European Commission and the Commons Public Accounts Committee investigate the deal, will give Labour a platform to make its economic case. It was quick to exploit the controversy this week, and showed that it is learning the art of opposition. To the Corbynistas’ surprise, they even won plaudits from right-wing newspapers for the first time.
Labour will now be able to remind us that the Conservative Party depends heavily on donations from the financial services sector and to shine a light on the lobbying of the Government – not least by the banks. Being seen as the party representing their rich friends will disrupt the Tories' attempt to hold the centre ground. In contrast, Labour’s instincts will be in tune with a majority of the public. Yet it will still have to work hard to take its golden opportunity. Labour can't solve the Google problem with the flick of a switch, but could win brownie points by arguing forcefully for a new global tax to replace an antiquated system designed in the 1920s.
Mr Corbyn will need to learn lessons from Ed Miliband’s populist policies such as an energy price freeze. Labour set out to be both “radical and credible”, but voters would not give Mr Miliband's ideas a hearing because his party did not first win economic credibility, as the Labour peer Stewart Wood, his former adviser, acknowledged.
But it is the Conservatives who face the biggest challenge on corporate taxation. At the top of Mr Cameron’s bucket list is fighting inequality, as he returns to the “compassionate Conservatism” on which he was elected Tory leader 10 years ago. The Prime Minister seems to have forgotten that part of his original pitch was to champion “responsible capitalism” and take on big business where necessary. The Tories, their Achilles heel exposed by the Google row, would ignore that agenda at their peril.Reuse content