Media mogul, whose own tax affairs came under scrutiny in Australia, says ‘posh boy’ politicians were too awed by tech giant

This article is more than 4 years old

This article is more than 4 years old

Rupert Murdoch has accused the “posh boys in Downing Street” of being too easily awed by Google as the government came under fire over its £130m tax deal with the technology giant.

Murdoch, the multibillionaire executive chairman of News Corp who ultimately controls the Times and the Sun newspapers, sent a series of tweets on Wednesday suggesting Downing Street was too close to Google and accusing the company of “paying token amounts for PR purposes”.

He made the pronouncements after facing accusations during the phone-hacking scandal that he and his executives were too close to senior politicians in the UK and had too much lobbying power. Murdoch’s company tax affairs have also come under scrutiny in Australia.

Rupert Murdoch (@rupertmurdoch) Google has cleverly planted dozens of their people in White House, Downing St, other governments. Most brilliant new lobbying effort yet.

Rupert Murdoch (@rupertmurdoch) Tech tax breaks facilitated by politicians easily awed by Valley ambassadors like Google chairman Schmidt eg, posh boys in Downing St.@

Rupert Murdoch (@rupertmurdoch) Google et al broke no tax laws. Now paying token amounts for p r purposes. Won't work. Need strong new laws to pay like the rest of us.

He made the comments amid intense scrutiny of Downing Street’s links with Google, as HM Revenue and Customs was accused of settling for too little.

Labour has said it believes Google is paying an effective rate of just 3%. This figure is disputed by Cameron but HMRC will not disclose what rate it has settled for.

At prime minister’s questions, Cameron defended the deal, saying it was better for the government to accept £130m than nothing collected under Labour.

He was forced to stick up for HMRC, after Jeremy Corbyn accused the government of having one rule for multinational corporations and another for ordinary individual taxpayers.

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After it emerged that ministers and officials had met Google officials numerous times in recent years, Corbyn said most people do not have the luxury of personal meetings to discuss their tax affairs.

“Millions of people are this week filling in their tax returns to get them in by 31 January,” he said. “They have to send the form back, they do not get the option of 25 meetings with 17 ministers to decide what their rate of tax is.

“Many people going to their HMRC offices or returning the [form] online this week will say this: ‘Why is there one rule for big multinational companies and another for ordinary, small businesses and self-employed workers?’”



Following the Commons clash, Corbyn’s spokesman said: “It’s quite clear that the majority of Britain feels that this is a bad deal for the taxpayer. Not only does there need to be proper tax paid by corporations, but there needs to be openness and transparency, which is what Jeremy is calling for.”

He said the Labour leader was considering publishing his own tax returns to put extra pressure on the prime minister to do the same. Cameron has previously said he would be “extremely relaxed” about disclosing his tax arrangements but has not yet done so.

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An investigation into Google was launched in 2009 under Labour, and it has taken the last six years to reach a settlement.

This is the first time Cameron has had to defend the deal since it was announced by George Osborne as a “major success” on Friday.

Downing Street had refused to repeat that celebratory language, merely referring to it as a good deal and insisting that HMRC was solely in charge of striking the agreement.

It has been under particular pressure since it emerged that both France and Italy are demanding much higher amounts from Google, despite the company having bigger sales operations in the UK.

The prime minister is also facing growing calls to scrap taxpayer confidentiality for companies, meaning they would be forced to publish details about their tax affairs.

Caroline Flint, a Labour MP and former cabinet minister, called for all corporate tax affairs to be made public.