Sat watching the BBC News tonight, my heart rate raced a few beats higher as I watch the Chief Accountants from Apple, Google and Starbucks in the UK defend their accounting process which has meant they’ve largely avoided paying UK Corporation tax, and particularly the hapless public policy wonk from Amazon.com, Andrew Cecil.
I’m glad I’m not working at Google in the UK, who at least as far as their management seemed to be concerned, don’t “innovate” in the UK. oops. Interestingly I used to work with Nelson Mattos at IBM, I wonder what he thinks now?
Starbucks came in for some extra questioning since they were paying dividends to shareholders and telling them, their business in the UK was doing fine, while at the same time declaring a financial loss and using the tax scheme, appropriately to shelter their profits from that loss. The BBC News piece is here.
Margaret Hodge, who chairs the parliamentary committee, told the BBC that she thought it was right for customers to boycott the three companies.
As entertaining as this was, and at first watch/read I was inclined to agree with Margaret Hodge over a boycott. After 15-mins of reading revealed a much more open/shut case that the MP’s need to deal with, that effectively shows Ms. Hodge protestations to be little more than a magicians use of mis-direction.
It was Hodge’s peers in the Labor Government which she joined in 1994, that handed over the water industry to the private sector. Where was the rambunctious questioning, hand waving, pointing and questioning while the water industry was moving all it’s money overseas, and steadily doing a better job at avoiding tax?
Thames Water have paid shareholders handsomely, moved money offshore, and burdened their company with so much artificial debt that according to Moody’s, the credit rating agency, says they can no longer afford the debt aka investment needed to do the infrastructure projects like the new $4.1-billion Thames bypass tunnel, proposed to stop sewage draining into the River Thames.
As Will Hutton’s article in the Guardian sums it up the best, Thames Water – a private equity plaything that takes us for fools. Let’s see the politicians doing something about this, and avoiding asking the taxpayer to either underwrite, or bailout Thames Water before going after the “tech titans”, otherwise these hearings remind me of the barn door, shut after the horse has bolted.