Boris Johnson Stokes Multinational Tax Debate

Boris Johnson

Boris Johnson has urged the government to make multinational companies such as Google pay their share of tax in the UK instead of pushing ahead with "absurd" Liberal Democrat proposals to impose a mansion tax on large homes.

The mayor of London stoked the debate over taxation paid by US companies on their UK operations by suggesting Google, which bases its European unit in low-tax Ireland, should hire unemployed British 18-24 year-olds in recompense.

The London mayor used a speech to business leaders at the annual Confederation of British Industry conference to make the case for "low but fair" taxes, as well as taking a swipe at Lib Dem policies.

Vince Cable, the Lib Dem business secretary, revived his party's call for a mansion tax at the weekend when he indicated plans for higher council tax bands for homes worth more than £1m would be included in the autumn statement on 5 December.

Johnson warned high rates of personal tax will make Britain less competitive and said it was absurd to be "whacking up" taxes on many Londoners living in nominally expensive homes who had little disposable income, when firms like Google "are paying zero".

He said: "Neither arrangement strikes me as being fair and so Google and co face a very clear choice – they can either change their tax arrangements or do much more to serve our society by visibly taking on 54,000 18 to 24-year-olds [in London] who are out of work."

A Google spokesperson said: "We make a substantial contribution to the UK economy through local, payroll and corporate taxes. We employ over 2,000 people, help …thousands of businesses to grow online and invest millions supporting new tech businesses in East London. We comply with all the tax rules in the UK."

Johnson's was one of several contributions from the podium on ethical business behavior. The CBI's president, Sir Roger Carr, opened the conference admitting that corporate Britain's reputation has been tarnished by behaviour that saw "greed prevalent and fairness forgotten".

Acknowledging the damage done by the banking crash and the phone hacking scandal, Carr said: "We must demonstrate that we are a generation that is focused not just on how much money we make – but how we make money. We must salvage the reputation of business," he said, adding that critics have been given a "licence to tar all with the same brush" by misdeeds in the media and banking industries.

"Businesses' and individuals' standards have been variable, greed prevalent and fairness forgotten in a number of sectors – banking and media at the forefront – but others from all walks of life [have shown] signs of bad behaviour."

Carr, also chairman of Centrica, the owner of British Gas, then delivered an impassioned defence of the corporate realm, saying banking boards have been overhauled, errant media companies reined in and executive pay pared back. "We must stop saying leaders don't care when they do, all energy companies rip you off when they don't, all bankers are despicable when they are not, or big business is bad business when it isn't."

The chief executive of consumer goods group Unilever, Paul Polman, told hundreds of attendees from the upper echelons of British business that the UK should "set the standard" for ethical economic growth. "Only businesses that make a positive contribution to improving the state of the world will ultimately be accepted by consumers. Businesses that don't will be rejected," he said.

Polman said the global appeal of Unilever products – from Dove soap to Magnum ice cream – gave the company an opportunity to educate consumers. "Every day we reach the lives of two billion people. No government can touch that reach," he said, citing a recent Unilever initiative to encourage children to wash their hands regularly and prevent diarrhoea.

Unilever's approach to its UK workforce has been criticised by trade union leaders over the past year, after the company closed its final salary pension scheme – triggering a wave of strikes at its British plants. Nonetheless, Polman told the CBI that British companies should lead the way in establishing a more socially and environmentally responsible approach to growing economies.

"The UK should set the standard for what equitable and balanced growth should be. The UK owes it to itself to set the standard," he added.

Powered by Guardian.co.ukThis article was written by Dan Milmo and Hélène Mulholland, for The Guardian on Monday 19th November 2012 19.27 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

image: © BackBoris2012

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