At the same time as abolishing the Social Fund for destitute families, the Tories are allowing internet giants to get away with paying minuscule amounts of tax, says Michael Meacher (Morning Star)
On the same day that the government announced it was scrapping the £180-million-a-year Social Fund for the destitute, a new survey showed that the big US internet companies operating in Britain have increased their UK sales last year by 18 per cent but paid even less tax to the Treasury than the year before.
Apple UK made £1 billion this country in 2011, but paid only £15.7m in tax. Last year its UK turnover rose £1.2bn, but its tax payments vanished to almost nothing – £1.7m, or precisely 0.1 per cent of turnover.
Facebook made £20m in the UK in 2011 and paid an almost invisible £200,000 in tax.
Last year its turnover nearly doubled to £35m, but its tax payments to Britain shrivelled to nothing at all.
Taking all the seven companies together – Apple UK, Google, Microsoft, eBay, Yahoo UK, Facebook UK and Amazon UK – their turnover in the UK last year was just under £3bn, but their tax payments totalled just £51m, or 1.7 per cent of turnover.
At the other end of the scale the Social Fund is being wound up by the Tories – something even Thatcher refused to do.
The Social Fund is the last helpline for the poorest families in extreme distress, often brought on by an unexpected financial crisis.
This last-resort lifebelt has been in place for the hardest-hit ever since 1948 and its removal will devastate families, often including children, leaving them literally destitute.
The Tories will no doubt argue that it’s part of the drive to make savings to reduce the budget deficit.
That claim won’t pass muster for two reasons. First, the deficit last year was £111bn, so cutting £180m will save 0.16 per cent – an enormously painful and destructive cut for an utterly minuscule saving.
Second, tackling the corporate tax cheats would be far fairer and produce vastly more money.
So why doesn’t the government get serious about industrial-scale tax avoidance?
Partly because HMRC has been significantly scaled back – and it started under Blair and Brown – as a result of industrial lobbying.
And partly because the Tories get half their annual income each year from the finance sector, so Cameron, Osborne and co aren’t going to touch the biggest tax crooks of all with a bargepole.
Of course the companies will come up with their usual plaintive mantra that they’re complying with the tax laws.
What they mean is they devise the most artificial contrivances they can think of to circumvent the weak and inadequate tax regulations that exist, knowing perfectly well that their practices are aggressively anti-social and contravene the national interest, but as long as they don’t actually fall foul of the letter of the law they have no interest in Britain whatever and will go on feathering their own nests – as well as, of course, the Tories’.
