In-depth investigation and analysis of the stories behind the day's headlines with Kirsty Wark.
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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.