How do you scrap a tax hike on your digital services business? Give Labour £16,000?

Google: facing an increase in the UK’s digitial services tax from 2% to 10%, this firm and others gave Labour shadow ministers gifts worth £16,000 and it was subsequently cancelled. The increased would have brought £3 billion into the UK Treasury.

Is Keir Starmer’s Labour as bent as a figure-eight? Judge for yourself with this tale of shadow ministers scrapping plans for a 10 per cent digital services tax after receiving £16,000 in gifts from Google and other companies in the sector.

The tax hike would have brought £3bn to the Treasury, providing an opportunity to cut taxes on struggling small businesses – but it seems £16,000 for people including shadow business secretary Jonathan Reynolds was enough to put a stop to this valuable change:

Information from Open Democracy says Reynolds was talking about the tax increase right up until he took a £3,377 package for two to attend Glastonbury as a guest of YouTube, which is owned by Google. The day after, reports emerged that he had ditched the plan.

It was not the only time senior figures in Starmer’s team accepted luxury gifts from Google in the months before the party’s U-turn. Shadow culture secretary Lucy Powell’s political adviser, Labour’s executive director of policy, and the party’s head of domestic policy all accepted tickets and transport to, and ‘hospitality’ at, the Brit Awards in February from the digital giant. Powell’s register of interests estimates that the adviser’s ticket was worth £1,170.

Starmer’s political director also accepted transport to and ‘hospitality’ ahead of the event from Google, though his ticket, along with that of Starmer’s private secretary, was covered by Universal Music.

Starmer had accepted a £380 dinner from Google for him and one staff member during the World Economic Forum in January.

In total, openDemocracy estimates that Labour shadow cabinet members and their staff accepted luxury gifts from Google worth nearly £10,000 over the months before they announced their policy U-turn.

And that’s just Google. The estimate of £16,000 in total may, in fact, be low.

Take a look at the full Open Democracy article (link below). The attached comment from ‘Tory Fibs’ is also useful because it crystallises the problem with Labour – or any political organisation – taking money or gifts-in-kind from businesses facing tax increases or legislative regulation:

My perception is certainly that Labour cannot be trusted to implement the right policies for the UK because its representatives are corruptible with cheap bribes.

And no – it doesn’t matter whether Jonathan Reynolds was otherwise influenced to cancel the policy.

It seems as though he shut down a £3 billion plan to help small businesses because a digital giant gave him tickets for Glasto.

And it seems as though the total cost to the digital services industry of shutting down this £3 billion plan was a mere £16,000. That’s pocket money to these people.

Until Labour – and all the other political parties – stop accepting these gifts from people and organisations their decisions may affect, they can never be trusted.

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1 thought on “How do you scrap a tax hike on your digital services business? Give Labour £16,000?

  1. Stu

    From Blair to Sunak, the doors were flung open to USA Businesses in return for personal prospects.
    Brexit took away our European protections and has left us wide open to bribery, corruption, hostile takeovers etc…

    In which reality will Starmer “save the day” and turn his back on all those juicy donations?
    My advice to those who believe the STP nonsense is “Grow up”

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