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article imageOp-Ed: Why does the British Government hate Google?

By Alexander Baron     Dec 4, 2012 in Business
London - The Public Accounts Committee is continuing to attack big companies like Amazon, Starbucks and especially Google over their allegedly avoiding tax. Do they want to drive them out of Britain?
Last month, the Public Accounts committed lambasted Google over its alleged avoidance of corporation tax. This has continued this month with a verbal assault on the spokesman for Amazon. It is right that in this age of austerity every company should pay its fair share of tax. Or is it? To begin with, if these enormous multinational companies were doing anything illegal, a specialist police team would have long been called in. But the suggestion that they don't pay enough tax is an entirely different issue. They certainly do pay tax. They employ people in the UK and have premises here; Starbucks is said currently to have over 1500 stores in the UK. There are over 50 in the centre of London alone. All these stores have paid staff, which means the company pays national insurance. It will also pay VAT, rates and other expenses. It is generating wealth, providing people with livelihoods, and is evidently doing something of which the public approves, otherwise it would have gone bust long ago. In a relatively free market, the consumer is sovereign.
Similarly, Amazon is a massive company selling books and all sorts of other stuff on-line; it has premises all over the UK, which again means that it is generating wealth and affording people livelihoods.
Google is in a different bracket from the other two; it has relatively few employees in the UK; currently it has three offices in Central London and one in Manchester, so one would not expect it to pay a great deal in the way of tax, but even if it paid not a cent, the benefits Google delivers to this country are worth far, far more than the mere £6 million it is said to pay in corporation tax.
In addition to the free e-mail service it gives us - totally free - Google provides all manner of information with a few keystrokes; it can even help you find the shortest route when you are driving. But it is also helping fund the Endangered Languages project as well as continuing to scan and put on-line literally hundreds of thousands of books. If the British Government and other governments decided Google's excess profits should be confiscated - ie stolen - the company would not have been able to invest in these magnificent projects, projects which benefit all mankind. Instead, this money would have been stolen from Google and disappeared down that black hole known as the Treasury in order to "pay down the deficit" a tiny fraction as David Cameron likes to put it.
This attack on wealth creators like Google is even more absurd when one considers the way the Government is dealing with the banks. Under its new funding for lending scheme, it gave the banks over £4 billion - literally gave it to them - in order for them to lend at interest to businesses. Unsurprisingly, the banks have been sitting on most of this money, probably depositing it elsewhere in order to earn interest.
Banks produce no wealth themselves, they are first and foremost book-keepers and strongrooms. The Government should pay less attention to stealing the wealth of the nation by punitive taxation and more to promoting policies that generate wealth for all, because we live in the global village, and if big companies can't make money here in Britain, and lots of it, they will take their operations somewhere they can.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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