22/01/2016 Newsnight


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

Similar Content

Browse content similar to 22/01/2016. Check below for episodes and series from the same categories and more!



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.