MP Barwell’s taxing links with Google and Ashcroft

Google UKDAVID WHITE  highlights a local MP’s troubling attitude on tax avoidance

Those following the website of Gavin Barwell, the MP for Croydon Central, will have seen a posting last week: “Gavin Barwell MP has secured a free Google training seminar for businesses in Croydon”.

Many in Croydon who have had their wages frozen or their benefits cut will wonder if it is the right use of Barwell’s time and resources to promote tax-avoiding Google. In 2011, Google had £2.5 billion of UK sales, but its main UK unit had a tax charge of only £3.4million.  Assuming their profit margin was 33 per cent and with corporation tax at 26 per cent, if Google had paid their full share of corporation tax, they might have paid about £200million more in tax in this country. In one year.

Google has also been criticised for funnelling $9.8 billion of revenues from its international subsidiaries into Bermuda, with the effect of greatly reducing its tax burden.

“It’s called capitalism. We are proudly capitalistic. I’m not confused about this,” Eric Schmidt, the chairman of Google, has said.

"Lord" Ashcroft: Barwell's former boss, and peerless when it comes to avoiding tax

“Lord” Ashcroft: Barwell’s former boss, and peerless when it comes to avoiding tax

As Inside Croydon’s loyal reader will know, Barwell is no stranger to associating with tax-avoiders. Before he was elected to Parliament in 2010, Barwell is understood to have worked for Lord Ashcroft, the former deputy chairman of the Tory Party. When William Hague, then Tory leader, nominated Ashcroft for a peerage in 2000, it was on the understanding that Ashcroft would stop being a tax exile and would return to Britain.

At the time, Hague promised that the new peer would begin paying “tens of millions” more in tax when he entered the Lords.

That was more than a decade ago. However, billionaire Lord Ashcroft did not become a permanent UK resident and as a result has avoided large amounts of tax in this country on his worldwide income.

None of which is illegal. Some people, though, such as the current Chancellor of the Exchequer, George Osborne, regard “aggressive tax avoidance” as “morally repugnant”.

At a time when the Tory-led coalition government has pledged to tackle aggressive tax avoidance by multi-national companies and wealthy individuals, it seems to me unsatisfactory that a member of that government (which is what Barwell is) should appear to be giving comfort and succour to some of the most prominent tax avoiders.

If the tax avoided by Google, Lord Ashcroft and others in a similar position had instead come to the Treasury, the government might not have felt it necessary to cap the benefits of some of the poorest people in the country

All in it together?

  • David White is a semi-retired solicitor who lives in Park Hill. He is a member of the Labour party and was a councillor on Croydon Council and the Greater London Council in the 1970s
  • Inside Croydon: For comment and analysis about Croydon, from inside Croydon.
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