22/01/2016 Newsnight

They're paying ?130 million in back corporation tax

We were following the rules as they were and now we will follow the

rules as they are, and we want to move fast to make sure that we pay

the right amount of tax. Is Google now in the good

books or is this a deal From Russia in the week

of the Litvinenko inquiry we have an exclusive

interview with this man - one of the last remaining thorns

in Putin's side who has made a film The thrust of the film is the

corrupt officials are gorging on billions of dollars worth of

Russia's wealth, just like the seagulls on these chips.

It was ugly and acrimonious but it changed newspapers forever.

We revisit the Wapping dispute 30 years on.

But they thought they could tough it out and they were wrong.

Today Google's doodle was of the man who invented the measure

The global company will be hoping the heat is now off them in the UK

after they announced less than an hour ago

that they are going to pay the Treasury ten years' worth

of corporation tax to the tune of ?130 million.

Tonight the company told Newsnight that the method for calculating

the company's corporation tax liability going forward

will have an added component - based on a percentage of revenue

Google has agreed to pay more than ?100 million of back taxes

after an open audit of its accounts by the tax authorities,

And they'll pay more to HMRC going forwards.

Google paid just ?20 million in UK taxes in 2013.

We have announced we will be paying more tax in the UK.

The rules are changing internationally

and the UK Government has taken the lead in applying those rules,

so we are changing what we are doing here

and paying ?130 million in respect of previous years,

when the rules were to pay in respect of profits

you made in a country and, going forwards, we will also be

paying in respect of sales to UK customers.

Google's name has become dogged by association with questions

For example, an anti-avoidance measure

introduced at a Budget last year was dubbed the Google tax.

The former chair of the Public Accounts

Select Committee was pretty fierce with the company.

You are a company which says that you do no evil and I think

that you do do evil, in that you use smoke and mirrors

Tax is a matter of following the laws that are there internationally.

We have all heard today how you define this...

But the sums being paid out now will not kill off these concerns.

If you look at Google's UK accounts for

2013, they report turnover of ?642 million, but that isn't

all the money Google makes in Britain.

If you look at documents filed by Google in the US,

they show that Britain accounts for $5.6 billion

of revenues in 2013 alone, rising to $6.5 billion in 2014.

But Google earns a lot of money in Britain that doesn't go

So this isn't the end of the issue for Google,

not least since other European countries would also like more tax

from them, so where does it leave Google's

My colleague Kamal Ahmed enquired today.

How reputationally damaging has the tax controversy been?

I think it's right that, where there is

public concern and politicians and the press are concerned

about international companies, not just

us, that you should change when the rules change.

As a business, we want to focus on building amazing

products and hiring people to help the UK make the most of the Internet

That is what we want to spend our time doing.

It has taken years to complete this audit, which covers a decade of tax,

but it isn't over for Google or anyone else.

The European Commission is currently looking into whether Ireland has

been too favourable to Apple and deals of this size won't take

Joining me to discuss this is the economist and director

of Tax Research UK, Richard Murphy, one of the lead voices

in the campaign to make Google pay more tax,

and from the Financial Times, Vanessa Houlder.

Richard, who is the winner? Superficially, the UK, we have ?130

million. That is a tiny amount of money, Google must be laughing all

the way to their bank in Bermuda with this one, to be honest. This is

a settlement which seems minuscule in proportion to the amount of tax

they have saved, and if the future tax is paid in proportion to this,

they are getting a settlement which is extraordinarily small. Do you

agree? Hey Jim RC insists this is the right amount of tax, -- Pecs MRC

insists this is the right amount of tax, the Treasury says this is a

ground-breaking decision, reflecting what the government has been doing,

but in terms of public perception Richard is right, people will look

at the very large amount of sales going into the many billions of

dollars and say, actually it is not very much in relation to that. How

did they make such a calculation? Well, we don't know, and we probably

will never find out, the details, but they have told us a bit about

the mechanisms. As Chris said in the base, they have a cost plus formula

which they normally use, and they are adding a slice of Cyres, how do

they define that slice? -- sales. No one needs to pay more tax than they

are due to play, we should say, but what is not clear, going forward,

this is a percentage of the revenue from UK advertising, and it does not

define what that percentage is, is that quite unusual? We do not tax

corporations, profit taxes on their Cyres, this is unusual, it is the

wrong basis for taxation -- on their sales. It raises a question about

the international settlement, it looks like Google might not become

resident in the UK, it will do an adaptation of the existing scheme

which leaves it selling from Ireland, and that leaves it looking

like one of these deals which is the revenue did which led them into so

much trouble with Parliament and the public and everyone. They must think

that this is copper bottoms otherwise they would not have

announced it. I agree with Richard, in the way that we were expecting

this to pan out, Google announcing they had a permanent presence in the

UK, and the signs are that is not what is going to happen. That is a

win for Google? It is probable that that is the way it sees the

international rules going, and these people are experts, HM RC are

experts, this might be a sign of how the settlement is going to pan out

for multinationals generally. It makes it less competitive? For the

UK? Yes. The UK has been pushing tax competitiveness very strongly for

the last five years, and along with that putting pressure on companies

to pay their fair share, as well, and my guess is the Treasury will be

very pleased with this outcome, it would think it has the best of both

of those worlds. I wonder if other global companies will think about

this, there's the row with Apple, for example. But them it is also

news, but it is very bad news for the OECD and their plans to bring in

a new international tax regime if the stands up, but this could be a

spoiler by George Osborne, as well. He brought in the diverted profit

tax, called the Google tax, as a spoiler to that process, has he done

this settlement to spoil the implementation of the agreement?

This is not straightforwardly the diverted profits tax. No, this is

the corporation tax, but does the settlement undermines the way that

process works, and if it does that is bad news for everybody. There are

sounding is coming from France, that Google is actually trying to reach

agreements with other European governments, and that will be

interesting to watch. 1 billion euros which the French government

thinks that Google knows it and we will see what happens. -- owes it.

You still going to be campaigning? Heavens, yes, this is a success, but

this is a small one, we have a long way to go to get what we really

want. Thanks for joining us. The state-sponsored assassination

of Alexander Litvinenko raises questions about law and order

in Russia, or the lack thereof. One man who is an expert on this

subject is Russian opposition activist and blogger Alexei Navalny,

who has several short spells His brother, Oleg, is in jail now,

on, critics say, trumped-up charges In a Newsnight exclusive,

Alexei Navalny has spoken to John Sweeney about Litvinenko,

his own fight to free Russia from corruption and whether

it is worth the risk. Welcome to Siberia. Actually, this

is Southend. But you don't need a Visa to get to Essex. We are here

because Alexei Navalny, the effective leader of the Russian

opposition, has declared war on the Seagull, in Russian. That is the

name of Vladimir Putin's top law enforcement officer, Russia's

prosecutor general. The scourge of the seagulls, Alexei Navalny, is

banned from leaving Moscow and rarely gives interviews to the

foreign media. He led anti-Putin protests four years ago. More than

any other Russian, he is fighting the Kremlin over corruption. How

much money is being sucked out of the Russian economy every year?

Through corruption, at least something like $50 billion a year.

How corrupt do you think is Mr Vladimir Putin? He is the basement

of this corruption. He is personally involved in corruption and he is

encouraging our officials into corruption, because it is his way of

rolling the country. Alexei Navalny knows only too well what happens to

people that challenge the Kremlin's power, when you go his friend and

opposition leader was shot dead in Moscow. -- one year ago. Boris was

my friend and he was shot dead, maybe 100 metres from the Kremlin. I

asked him about the strange murder of Alexander Litvinenko. Is it

possible to buy polonium in a shop in Russia? That is why I guess your

investigation shows it was an FSB operation. The British investigation

about Mr Litvinenko, one of the conclusions from the investigation

was that Mr Putin personally, probably, was involved it in giving

orders to commit such a crime. On Monday, Alexei Navalny will launch

the English language version of his documentary on corruption in Russia.

The thrust of his film is that the corrupt officials are gorging on

billions of dollars worth of Russia's 12, just like the seagulls

on these chips -- Russia's wealth. The film alleges multi-million

dollar corruption, by the sounds of prosecutor general. Seen here with

the Prime Minister, Dmitry Medvedev, and the patriarch, Russia's version

of the Archbishop of Canterbury. Corruption in Russia is not

something like White collar crime or something, and we wanted to show

this level of the degradation of Russian power. In the film, he

alleges that Artem has been involved at all levels. They have been

involved in torture and murder. The hotel is worth 30 million Euros,

welcome to the opening ceremony for the pomegranate wellness spa in

Greece. Cutting the ribbon, Russian people turned out for the gig, this

man said that Russians have an extra chromosome which make them supermen.

He is not a geneticist, but the Russian Minister of culture. His

business associates have been close to the crime family, allegedly, six

years ago the gang committed a massacre. It was a crime, which

shook all of Russia, because it was a real massacre and 12 people were

killed including four children, one newborn child, they threw him into

the fire while he was alive. The film also alleges that he sold a

shipping company from underneath its owners. Its director complained

about him. The next day, he was found dead with a rope around his

neck. Suicide, said the authorities. But, according to the paper from the

coroner's office, a trace on his neck showed that it wasn't a

suicide. But Russian investigating bodies, they just refused to have

any investigation. Newsnight asked this man for a response, but got no

answer, but his dad, the prosecutor general, is said of Navalny's film

that it was a black PR action and a hatchet job and the information in

response it -- presented is deliberately. Fight with no basis in

fact, adding that it was paid for by the British and Americans. Navalny

isn't just challenging if you people called Seagull. He is also taking

aim at the system in Russia, which he thinks is rotten, and, of course,

the man in charge of that system, Vladimir Putin.

Rupert Murdoch might be making the headlines now for his impending

marriage to the former model Jerry Hall, but 30 years ago this

weekend he was in the eye of the storm - not for love

When his 6,000 printers went on strike, threatening the future

of his four titles, Murdoch hoodwinked them by swiftly moving

production out of Fleet Street to a brand new plant in Wapping,

which he had pretended was for the launch of a new Sunday paper.

Stephen Smith takes us back to the dispute.

It was mayhem in the streets around Rupert Murdoch's printing

Hundreds of police and thousands of demonstrators vied for control

of the roads in and out of the plant.

The audacity with which it was done, the switch to Wapping.

It was very much a Thatcherite phenomenon, the changes in the law

And also, the cult of individualism rather than collectivism.

Many, though not all journalists, at Rupert Murdoch's titles came

to when the papers decamp from Fleet Street

6000 other workers had been given notice after

What did the dispute look like inside

Apart from the computer blowing up about half a dozen times, the rest

of it has been absolutely fantastic. It was a nightmare in the sense that

I had three bodyguards, I was driven in, and everybody knew the cars was

not especially when we came out of the factory, there was shouting and

early aching and generally trying to cause a problem. What Murdoch and

Coe were turning their backs on was cold, hot metal technology. As well

as the alleged Spanish customs of the print unions. They were not only

getting their share but everybody else's. They were taking money home

in wheelbarrows, were checking -- working virtually no hours, refusing

to embrace new technology. To make any change,

to embrace new technology. To make lasting years. They were not moving

with the times. Therefore, they paid the price and, actually, they

deserve it. There were undoubtedly people who were double jobbing it,

signing on, as Mickey Mouse etc. In a way, the boss class colluded. They

wanted their product out, sharpish and soon as. Other proprietors

subsequently said that -- showed that negotiations could be carried

out in a civilised fashion. Murdoch showed -- chose not to. He is very

clever. It was a long ago dispute over a product nobody cares about

any more, or so we are always being told. In fact, there are still at

least two sides to be dispute. Didn't allow Murdoch and other less

obtrusive proprietors to put off the end of newsprint, or was it an end

-- a moment of infamy in the history of workers' relations? In a way, you

miss the smell because the plant isn't where the papers are made by

the journalists, but honestly, the conditions were shocking, kind of

medieval, and the idea of dropping lead into a molten pot and mucking

about with it, it is quaint, but the truth of the matter is, a

ten-year-old could do it today. It is a time that has come and gone.

With me from New York is Sir Harry Evans, editor

of the Times newspaper under Rupert Murdoch in the early 1980s,

and Ann Field, who was involved with the Sogat print union

Harry Evans, how did Rupert Murdoch operate during that whole Wapping

time? Was he leading from the front or was it all from behind? He led

from behind by absolutely brilliant planning before the Wapping

confrontation took place. I had by that time left the Times, I was

editor of the Sunday times, and my recollection of all of this was how

very hard it was at the Sunday Times to get into one -- get into

operation what was lovingly called new technology, computer

typesetting, and just efficiency. So the actual Wapping dispute

overshadowed the previous seven or eight years when the management at

the Sunday Times, and I was on board so I agreed with it, tried very to

introduce computers, offered lifetime guarantees for the workers,

but we didn't get it. On top of that, the Sunday Times was sabotaged

week after week in the press room. We were very close to the print

people, the people who put the type. By the way, I have a high

appreciation of their skills in a previous speaker does. He doesn't

understand what was really happening. Having said that, the

press room unions were completely hostile. When I published the final

thalidomide investigation, which had taken eight years, they sabotaged

the run. Were you shocked that he managed to hoodwink the print unions

by that new plant at Wapping? Were you quite shocked? I wouldn't say

shocked but impressed. I don't want to sound like a complete boot in the

face employer, but all of the journalists, who were very

frustrated, frustrated with the management of the company, of

course, but also very frustrated with the guys in the press rooms,

who actually sabotaged the work of their colleagues upstairs. So I

wasn't shocked at what happened. I thought nothing would ever break the

complete deadlock. Ann Field, were you impressed or shocked when,

suddenly, the move to Wapping happened and left you high and dry?

The real word is shock and disgust at the overnight dismissal of 5500

people. Kelvin MacKenzie says that there were avenues open for new

technology discussions... There were no avenues open. Murdoch laid down

an ultimatum in the autumn of 1985, after a period of silence of about

five months, where the trade unions were pressing the company for

negotiations on the move to Wapping. The company said that they were not

prepared to discuss anything about the move. Unless we agreed to lesser

conditions for the London post, which was a fictional newspaper

which never existed. The long-term ramifications for this, one way of

putting it is is that he was ahead of his time. I wonder if you agree?

No, I actually think he acted like a barbarian, ignoring all basic human

rights and dignity of workers, and it was a conspiracy, nothing to do

with formal, proper negotiations. Harry Evans, what do you think the

ramifications were for journalism, looking back? Just a quick comment,

I was in the management of the Times newspapers forced we were very

civilised. We tried for 12 months. The previous speaker, who is totally

sincere, has no experience of what it is like for the journalists and

the press men when your work is destroyed. You have been offering

lifetime guarantees, all of this, to get new technology, so I have a

different view. But I wasn't part. Many of my journalists were in

Wapping and didn't like what they saw. Having said that, obviously,

the decline of print associated with the rise of digital has made

investigative journalism more difficult to be sustainable, and you

have seen a serious decline in long-term investigations. It is so

sad to me, so very, very sad, that all of those crafts men, with whom I

worked for 15 years, getting out the paper, having very good results,

ending cervical cancer, all of these things, were sabotaged by the

complete disunity among the print unions. Do you think there is an in

security now in the whole medium? I am sure you are right, no question.

Nowadays, the people who are falling by the wayside by the journalists. I

have total sympathy. The people I worked with on the print site were

at absolutely wonderful, all of them. They were desperate to keep

the paper. They were frustrated week after week by the engineers in the

press room. The NGA in the composing room at a different view. The thing

to do, now, is the fact, when you say shocked about Murdoch, listen, I

had my own battles with Murdoch and I have written about them. That is

one reason I am not in the UK. Thank you, both.

The funeral was held today in Israel of one of Britain's most

influential, philanthropic and cultured non-grand grandees

Lord Weidenfeld got out of Austria at the age of 19

with his parents after the German invasion,

but not before fighting a duel with a Nazi.

He worked in London for the BBC Monitoring Service

after which he co- founded the publishing house

He published De Gaulle, Harold Wilson, Kissinger and a host

Here he is talking to Hard Talk in 2015, about his bold decision

to publish Lolita by Vladimir Nabokov.

I was very impressed by Nabokov firstly.

I read his earlier works, I knew his background,

Also people like Graham Greene, whom I value, etc, encouraged me

to fight the battle and I think we blazed the trail for a change

When Lord Weidenfeld died he was in the midst of setting up

a charity to help Syrian and Iraq Christians persecuted

One of his closest friends, whom he also published,

was the writer and historian Simon Sebag Montefiori.

When you met him at first, what was he like? He was wonderful, and

amazing friend. He existed in this rarefied world, international,

Cosmopolitan, sophisticated. When you were talking to him at his

apartment, full of Francis Bacons and Renaissance Popes, you felt that

you could be in the chancellery of Cardinal reseller or in the palace

of a floral time prints. What drove him? It wasn't just to have these

things. He was first and foremost an amazing publisher who published

everyone from Nabokov, Hook, Edna Rob Brydon, Antonia Fraser. -- Pope.

He was also a philanthropist. He really believed in building bridges

between Jews and Germans, between the three great Abraham Lincoln

religions. From his very deathbed, he was trying to help Syrian

Christians -- the three great Abrahamic religions. He was a whit.

When you were with him, the conversation, he knew his art, his

music. Of course, the written word. He was enormously good fun. And he

was enormously kind to everyone. I was just one of the very young

writers who he encouraged and helped. When you were with him,

again, he was a character who seemed to belong in a variety of great

works. He was a Christian character. He could have been in a novel by

Disraeli. -- Proustian character. Do you think that bringing outsiders in

to bring a new kind of culture, do you need that? He arrived as a

refugee from the Nazis. He was a last blossoming of that now

blossoming Jewish-Viennese culture which was so persist -- so

sophisticated and both high and low, witty and playful. He brought back

to England and he was a huge ornament to Europe. He led an

extraordinarily long life. You wonder if, with his passing, you

treasure the memory, because there are very few people like him left.

Even his generation, he was a one-off, but he was one of those

amazingly talented, mainly Jewish refugees from Middle Europe. He was

very generous. There was nobody like him and there won't be again. You

knew him when he was much younger and he encouraged you and nurtured

you. Do you have a favourite memory? The way he would ring up and say in

his soft Viennese voice, Simon, come over for a quick tour de reason. We

would have an amazing chat about great people, Chancellor Kohl, John

Paul II, the Pope, any of the amazing people he published. He

lived in a great world but he was extremely generous with that

greatness. Lord Biden felt, whose funeral was held today in Israel.

That is all we have time for. -- Lord Weidenfeld. Emily will be with

you on Monday.