The BBC has reported:
Sir Martin Sorrell, chief executive of global advertising group WPP, has said the amount of corporation tax companies pay is largely "a question of judgement".
Sir Martin argued that companies like Google and Starbucks pay tax more out of a sense of corporate social responsibility, than because the law forces them to.
"Doing good is good business," he said.
The first question is why there was no one there to challenge him on this opinion.
The more important question is why he can think this is the case, and by and large have evidence to support his opinion.
Could it be that it's because, as the Public Accounts Committee said:
HMRC needs a far more determined approach to dealing with multinationals and their tax affairs.
Or could it be that the chair of HMRC is Ian Barlow, the former senior partner of KPMG in the UK. Yes, that's the KPMG who were fined $455 million not so long ago for selling abusive tax schemes, giving the surest indication of corporate capture of the system possible.
Or might it be because the number of staff at HMRC will decline from 104,000 in 2005 to 61,000 in 2015?
Or is it even that whenever HMRC want advice on tax policy they turn to the FTSE 100 funded Oxford Centre for Business Taxation led by Prof Mike Devereux, the man who wrote in the FT recently that the best reform of corporation tax would be its abolition and whose work is at in no small part funded by a host of tax avoiding multinationals? No wonder the Oxford operation is more commonly known as the Oxford Centre for the Non-Taxation of Business.
Might any of these facts have anything to do with Sorrell's opinion?
I think they just might.
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Every one of your observations is correct, Richard, and could, of course be extended to many other policy areas (e.g. energy, environment and education to name but three).
When I used to teach government and politics to undergraduates through the 1990s I would have told them that this degree and scale of corporate capture was an impossibility in a functioning democracy because of inbuilt checks and balances. But instead what we witnessed from Blair’s second term in office (speeded up since 2010) was the weakening of those structures and mechanisms plus – and this is very important – their capture by vested interests. Consequently what we ended up with was corporate capture of the policy input side (ideas, proposals, reports, consultation, etc) plus the output side, in terms of regulation, oversight and control.
When you add to that a very real reluctance to have any policy impacts evaluated in a rigourous way – or if they are the results are hidden or obscured (often due to ‘commercial’ concerns – as with the current work programme) ) and an increasing culture of self sensorship within the civil service and government, plus the recruitment of many people with a neo-liberal bent (despite claims to be ‘impartial’) this is where we end up. I’ll repeat what I’ve said before here: we are not a million miles away from the entirely corrupted system that now applies in the USA. And make no mistake, this is exactly where many people in this government and their corporate and rich supporters want us to be.
Ivan, by “culture of self sensorship within the civil service and government” do you mean deliberate ploys used to frustrate Parliamentary and the public accountability? Presently the Public Accounts Committee are locked in a battle with the National Audit Office over the latter’s refusal to provide the Committee with the report by a judge it commissioned to look into the Vodafone, Goldman Sachs and other sweetheart deals done by former HMRC boss Dave Hartnett all in the name of “taxpayer confidentiality”. The head of the NAO – former global head of PWC – has the statutory power to disclose not just the report by Sir Andrew Park but also the papers he considered to Parliament and indeed to the public without breaching taxpayer confidentiality but has chosen not to use the power to disclose either
the report or the papers themselves. And so far there appears to be precious little the Select Committee can do about it.
That’s the sort of thing we mean
Yes
As Richard has already noted, Zorro, your example illustrates exactly what I/we mean. Indeed, so entrenched is it in this case that what we appear to have is a situation where an individual and/or organisation (or its senior management, anyway) place the interests of corporations and related individuals (and perhaps the NAO itself), plus the questionable past actions of other individuals (at HMRC) that appear to priviledge certain corporation, over the interests of parliament and thus the citizens of this country. And this is done with very little – if any – concern about sanctions being applied to force that disclosure because the organisation and individuals in question are confident that the same culture of self sensorship and ideological bias applies widely within government. So much for democratic accountability!
Interestingly, when the PAC summoned the Comptroller & Auditor General (C&AG) of the NAO to take his evidence in public and on the record – after months of fruitless behind the scenes discussions – the government sent a lawyer to inform the PAC that the govt supports the C&AG’s decision not to disclose ‘taxpayer confidential’ information to the Committee. So we may well see the PAC lose its very effective unanimity on this issue as the Tory and Lib Dem MPs are now likely to break ranks with Margaret Hodge and other Labour members of the Committee.
When one remembers that the NAO looked at the settlements in 2011 and managed to conceal the irregularities from both the PAC and the Treasury Select Committee until the HMRC whistleblower reported it to the Committees and the PAC then asked the NAO to look at the settlements again, which was what led to the NAO commissioning ex tax barrister and ex high court judge Andrew Park to assist them in the review. Now Park has reported to the C&AG who instructed him and now the &AG has provided his own interpretation of the judge’s report to the public and the PAC but would not allow the PAC or even a select group of the PAC to read the report themselves.
Given the NAO’s previous cover-up you would think that it would be taken as given that the judge’s report will be passed on the PAC but no; and the govt supports this. Whatever happened to Parliamentary privilege let alone Parliamentary sovereignty?
Indeed, what did happen to parliamentary sovereignty?
Why am I not surprised that the Public Accounts Committee get the information it needs. There is rather a big cloud hanging over the Vodafone and Goldman Sachs deals in particular and I think it is most certainly in the Public interest to find out what terms were agreed and why.
If there is nothing untoward, then at the very least it will give the Public confidence that we ciontinue to live in a fully functioning democracy, which personally I am beginning to doubt.