Shadow chancellor announces radical idea of making big businesses ‘pay their fair share of tax’

Jeremy Corbyn’s shadow chancellor has caused a stir with his idea that big businesses should pay their taxes.

Speaking at the Labour Party conference in Brighton, John McDonnell named and shamed big companies over their tax arrangements.

‘Labour’s plan to balance the books will be aggressive,’ he said.

‘We will force people like Starbucks, Vodafone, Amazon and Google and all the others to pay their fair share of taxes.’

Seems fair enough – but big business representatives aren’t too thrilled at the prospect.

‘The overall impression of this speech was of rather more intervention in the world of business and the economy,’ John Cridland, director general of the Confederation of British Industry, said.

‘What’s clear to us is that you can’t be pro-growth and pro-jobs without being pro-business.

‘And a thriving public sector is essential for raising living standards and paying for high-quality public services.’

John Longworth, director general of the British Chambers of Commerce, said Labour ‘must not confuse supporting growth with state control over the economy’.

And Mark Littlewood, director general of the free-market think tank the Institute of Economic Affairs, even went so far as to call McDonnell’s suggestion ‘deeply disturbing’.
However, union leaders welcomed the idea.

Mark Serwotka, the Public and Commercial Services union general secretary, said it was ‘an inspirational and historic speech that set out a long overdue dividing line between Labour and Tory economic policy, offering hope that there is an alternative to unnecessary and damaging cuts’.

And Unison general secretary Dave Prentis said: ‘With the election of a new Labour leader, there’s hope for the future, a belief that there is another way, of growth and investment in infrastructure, of a balanced economy that works in the interests of the many.

‘This is our time to smash the consensus that austerity is here to stay. It’s our time to create a new path that offers hope and opportunity for those already left behind.

‘It’s time to set out an alternative to the cuts agenda, the privatising agenda, and to the pay freeze destroying lives.’

Starbucks, Google and Amazon were embroiled in a major scandal in 2012 because of their offshore tax arrangements.

Until May of this year, Amazon processed their retail revenues through Luxembourg. However they now pay tax in the UK.

‘It is disappointing that this has been raised again,’ a Vodafone spokesperson said. ‘There was no truth in the allegations in the past and there are none now.

‘As we have made clear on numerous occasions, Vodafone has always paid its taxes and for the last financial year (2014/15) we paid around £360 million in direct taxes in the UK.’

A Starbucks spokesman said: ‘Starbucks is now profitable in the UK and we are paying corporation tax.’

Google declined to comment on the shadow chancellor’s remarks.