25/01/2016 Newsnight


In-depth investigation and analysis of the stories behind the day's headlines with Emily Maitlis. Featuring the shadow chancellor on Google's tax arrangements.

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Can we really blame Google for not paying more tax?


We have low taxes in Britain, but those taxes are paid. This never


happened when there was a Labour Government in office, so you hear


them complaining about it, but they should have done something when they


were in office. Who's got it right? We speak live to the Shadow


Chancellor, John McDonnell. Take your eyes off Trump and look


at the Democrats for a moment - what once seemed like an easy race


for Hillary Clinton is now looking We speak to one of her closest


allies about her battle There are plenty of male politicians


who have outright scandals that happened to them and they overcome


them. So I see some of this through a gender lens, I can't help it.


We ask some of those experiencing it.


We don't pluck money off trees like they think. You have people back


home calling you and asking you for money. You are in London, you are


rich. They should come and see some of the jobs we are doing.


Boris Johnson wrote today - "...blame a shark for eating seals.


It is the nature of the beast and it's the law."


He was talking about Google and its tax bill.


His point was simple: How absurd to blame a company for attempting


to minimise the amount it pays out to the Government,


when it lies at the very root of what any finance director


So tonight, we step back from one company and one bill and ask if that


Is it immoral to use a loophole to your company's advantage?


And what should this whole debate tell us about our attitude


to taxation and the message our legislators send out


In a moment we'll talk to Labour's Shadow Chancellor,


John Mcdonnell, who called the Google settlement of ?130


million pounds "relatively insignifcant".


If you look closely enough and have the right equipment, you can even


see the apparently tiny sums that multinational corporations pay in UK


tax. Under the political microscope


today, the ?130 million settlement Google has paid in back taxes


in a deal with Her Majesty's Revenue According to the Shadow Chancellor,


this is a derisory sum. The Chancellor has managed to create


an unlikely alliance between myself, the Sun newspaper, the Mayor


of London and, according to reports, All of us think that this deal is


not the "major success" the Chancellor claimed at the weekend.


a lab that fights against malaria, rejected Labour's analysis.


I think it's good news is that we are collecting tax


That's thanks to the action that this


Government has taken to make sure that yes,


we have low taxes in Britain, but those taxes are paid.


But is the real problem that our tax system hasn't kept pace


According to the House of Lords economic affairs committee,


corporation tax in a given country is now largely voluntary


And that is particularly true of high-tech


Most of its value is created by intangibles.


And that is something the current tax


Google, for example, uses a manoeuvre known as the double


Irish, shifting profits between Ireland,


with low corporate rates of tax, and Bermuda, with no corporate


The problem for nation states is, this is all perfectly legal,


and as our economies evolve, more and


more companies will be able to do it.


What constitutes the correct amount of tax is becoming an elastic


Google is the symptom, but they're probably not the cause.


particularly the corporate tax system,


if we're to protect the tax base for the next 25 years.


Because even if the executives of a company woke up one day


and decided out of the goodness of their hearts


that their corporations should pay vastly more tax,


well, the people who own those companies


of perhaps the Labour Party, then they could face


where the shareholders would accuse them


So how might we change the tax system


so that companies can't shift their profits and costs


Well, one answer is to tax something


we will always be able to see where the sales are.


So we will be able to link the activity of the company


with taxation, something we are not able to do now.


The science of getting companies to pay more is far from simple.


The twin forces of globalisation and computerisation


make national boundaries, even in activities as mundane


as ordering a coffee, buying a book or hailing


I'm joined by Shadow Chancellor, John McDonnell.


Thanks for coming in. This payout by Google hasn't impressed you. No.


Independent assessors have assessed it at about 3%. In comparison with


that, the corporation tax during this period was between 20% to 30%.


Other taxpayers, particularly businesses in this country, will be


startled and offended. What should it have been then? You go back to


the corporate tax rate, what should that rate be now? Again, independent


assessors have said if Google were paying what others were paying


throughout that period, instead of the 200 million they've paid for ten


years, on average they'd pay 200 million a year. You can see why


people across the House, it was all parties today, MPs from all parties


were expressing their concern. It was described by Boris Johnson


himself as derisory. The biggest question is whether the current tax


system itself works. You heard there, the correct amount of tax is


an elastic concept. Did you agree that the system is ripe for reform?


Andrew's announced a review by the Treasury Select Committee today of


the tax system. We've instituted one for the Labour Party already. I did


that at my conference speech last September. The system's not working.


A couple of problems - one, the lack of transpatience yr and openness.


The Chancellor -- transparency. The Chancellor didn't come to the House


today. He sent a junior minister. We need complete openness and


transparency. We need international agreements of country by country


reporting, so individual countries are reported what their profits are


country by country. I raised with the minister today, we cannot keep


on cutting and demoralising the staff at Midnight Mass Iraq. These


are the -- HMRC. These are the people who collect the taxes.


Transparency at the heart of this. Labour's plans to plans the books


will be aggressive, you said at conference, we will force people


like Starbucks, Amazon, Google to pay their fair share of taxes, what


does that mean to go after them aggressively? It means we cannot


allow deals like this in the future. We must design our tax system so


it's effective. If anyone owe fends against that we make sure they're


brought to book. That's the end of the double Irish, the end of


loopholes, what would you do with the corporate tax rate? This is what


I thought George Osborne was supporting, international agreements


which ensures that we don't have these schemes in place. This scheme


undermines those very international agreements we're putting forward,


because it's a one off that sets a precedent. What would you do, you


use the word "aggressive" in terms of what you would change now, what


are the loopholes that just vanish under Labour? It's making sure they


report their activities on the ground. They can't shift profits.


Where they make them in one country, remember Google made ?1 billion


worth of profits in 2014, they then shift those profits and other areas


of activity to other countries. Should for example Starbucks be


taxed on each individual outlet, each of the profits of an individual


coffee shop, is that what you'd like to see? Part review is to define


what economic activity is. If the profits are made within a country,


they should be taxed within that country. We need to do this by


international agreement, otherwise we'll find that people are using


devices to shift their burdens elsewhere and reduce their tax


burdens overall. Going back to that idea, would you like to see, for


example, Starbucks as an individual outlet taxed on profits or would you


like to see local authorities refuse planning permission to Starbucks


until they agree to pay what is right? I think we need, first of


all, national legislation reform. We need international agreement. So


it's not down to the individual sanctions of individual authorities.


This an early day motion sponsored by Jeremy Corbyn, your leader and


signed by you. That's right. Has that changed in your mind? Not at


all. We've been campaigning on this for 15, 20 years. We were looking at


different devices to raise the publicity around that. That was one


of the ideas that was come up with. It's just to raise publicity then,


it wasn't serious? It was to ensure that the range of activities on the


agenda that we can explore when we go into Government. What about a tax


on sales? What about taxing the activity of a company, its revenue


or sales? At the moment, the Government defines this taxation


based upon economic activity within the country. The problem with the


Google settlement - We know it's taxed on profits. Let's be clear,


what the Government is saying is that it's taxed on economic


activity. They would not define today in the Google settlement what


exactly that economic activity was. That's why we're saying there's got


to be openness and transparency. What should it be? We define


economic activity by the basis of the profits that you secure within a


country. It's down to profits. the profits that you secure within a


asking you one step further - can you imagine a system which actually


worked off the revenues a company was making or the sales it was


making, rather than the profits is that the direction to go in? We've


always worked on the basis that you seek to tax on the economic


activity, based on identification of profits within a country itself. If


we can secure openness and transparency, we can identify what


the economic activities of that company is within the country, what


the profits are, and then we can determine the level of taxation that


we need to basically to ensure we have our services paid for. Also we


need international agreement so there isn't this transfer and


avoidance of tax. From one to another. Yes. I'm thinking back to


the phrase you used at conference, "new politics requires new


economics". There will be people expecting you to come in and do


economics". There will be people something radically different, to


rely re-- really reset the button between the relationship with the


corporate giants that seem to be getting away with it and with the


Government in waiting, which you want to be. This sounds like more of


the same. Not at all. You said transparency, debate, we'll look at


this. I don't see anyone saying we're going to do things radically


different. This is radical. Making sure companies open their books and


we can have complete openness and transparency. So it's just about


transparency. You're not saying put up the corporate tax rate. Wait for


it. Once you have openness, you can determine the economic activities,


the profits they're making. Then we can set the tax rates on the basis


what have we think is fair. What's unfair is companies out there across


the UK filling in their tax forms, as are individuals, what they're


paying is rates of tax, corporation tax 20%, higher on income tax, then


Google paying 3%. That's unacceptable, unfair. We need to


make sure the corporations cannot use tax avoidance measures to avoid


their responsibilities to pay in for the public services, for example the


education and training of their workforce. There are people who felt


at one time they should boycott Starbucks if they didn't agree with


the tax. Would you boycott Google? I've been involved in a range of


boycotting campaigns. Do you boycott Google? The problem, is that a


number of the IT companies have virtual monopolies, so most of us


use it. We have to make sure where they are in such a dominant place -


You carry on using Google broadly, there's nothing that you can do that


would scare off people? Because they're so dominant within the


market that's the reality of what we're dealing with. That's why you


design a tax regime so you ensure those monopolies pay their full


taxes and contribute towards the society they operate in. You don't


think there's anything to scare Google off? Yes, it is. It's going


to be John McDonnell and the Labour Party? It's society as a whole. We


saw the Government isolated today on a cross-party basis people saying


we've had enough of this, we want a fair taxation system and we're going


to achieve it. Corporate tax at 18%, that's where it's headed is that the


right amount to you? No, it isn't. That's too low. We would bring it


back to 20%. We believe 18% is too low. In addition, they're reducing


taxation, yet a large number of corporations and companies are


sitting on earned income and not investing it. We want to ensure they


invest in our society. Thank you. Thanks for coming in.


The US presidential race has - for the past few months -


been dominated by the politically-implausible,


larger-than-life character of Donald Trump,


which means much of what's happening in the Democratic race


But if that race once looked like the coronation


of Hillary Clinton, now it's looking more like a proper fight.


Her challenger, Bernie Sanders, a self-declared socialist


from Vermont, currently leads the polls in the first two electoral


Now the former Mayor of New York, Michael Bloomberg -


a man whose coffers make Donald Trump look like a pauper -


suggested he might enter the race for the White House if the contest


came down to a fight between Sanders and Trump.


In a moment, we'll hear from Anne-Marie Slaughter,


one of Clinton's closest political allies.


First, a reminder of the race to date.


Sometimes, an attack is the biggest compliment a politician can


So Bernie Sanders has clearly gone up in Hillary Clinton's estimation


if this jab at his healthcare plan is anything to go by.


In theory, there is a lot to like


about some of his ideas. But "in theory" isn't enough.


A president has to deliver in reality.


The Sanders surge has also prompted another politician


Former New York City Mayor Michael Bloomberg is hinting that he'll get


into the race if Donald Trump or Ted Cruz


wins the Republican nomination, and Bernie Sanders becomes


For his part, Mr Sanders appears to welcome a Bloomberg bid.


If Donald Trump wins and Mr Bloomberg gets in,


you'll have two multi billionaires running


for President of the United States against me.


And I think the American people do not want to see our nation


where billionaires control the political process.


Meanwhile, the Republican race frontrunner Donald Trump has


been laying out how bullet-proof his popularity really is.


They say I have the most loyal people,


I could stand in the middle of Fifth Avenue and shoot


somebody and I wouldn't lose any voters.


To reflect on this, I spoke to Anne-Marie Slaughter,


former senior adviser to Mrs Clinton.


You've worked very closely with Hillary Clinton,


who for years, to the world, seemed like she had the Democratic


nomination pretty much in the bag this time.


Now, suddenly, there is the spectre of what happens in Iowa


and New Hampshire if Bernie Sanders pips her to the post.


Well, I am still pretty confident that she will have


the Democratic nomination and I do think it is not a bad thing


for her to be challenged, because the American voters do not


like a coronation, whether it is a man or woman,


particularly, probably, if it is a woman.


So she will fight for it and as she fights, that is part


She is tough and experienced, and I think she will


If she didn't, I for one would look at this and think,


I'm not sure we're going to have a woman


You can't get more qualified than she is.


Of course, there have been lots of issues in her life.


You can't be in the public eye for that long


and not have lots of issues, but there are plenty of male


politicians who have plenty of outright scandals that happened


to them, and they have overcome them.


So I do see some of this through a gender lens,


I can't help it, because I am looking at her and thinking,


what more could you want in a president?


The interesting dichotomy is that she should be


the ground-breaking candidate, the first woman, and she doesn't


seem like the ground-breaking candidate, because


America feels that they know her almost too well.


She feels like the establishment to many people.


We saw that with Obama, too, this disgust with the system,


rightly in many ways, because the system is broken.


Yes, they have cast her as the establishment,


but I also think it is because younger women


don't realise how revolutionary it is to have a woman being taken


seriously as a presidential candidate.


Did you see Obama's recent comments that he


thinks Hillary Clinton has got unfair scrutiny,


and that he even regrets the tone of the battle they had in 2008?


I did not see that, but I was furious with him


back when he said, "You're likeable enough, Hillary".


I did think he patronised her in the 2008 election,


and it was one of the things, I wanted him too, but in the end


I supported her, because I think she was treated in a very


and good for him for saying that now.


When you look at the race, and the suggestion that Bloomberg


might come into it, could you see that?


Is that a good move as an independent?


Well, I look at this and think, wait a minute,


between two white male billionaires, really?


Is that what American politics has come down to?


I don't know whether he will do it. I don't think he should.


This is not a professional view, but I don't think


it would be good for American politics to have a kind of


very wealthy, white knight ride to the rescue,


because a woman, what? That she can't win?


Let's have this election, and let's give her a chance,


and I also think if there is another attack,


if there are any other national-security events,


and there will be, voters are going to think,


who do you want in charge when that happens?


Can you see a scenario in which Donald Trump wins


the nomination and wins the presidency?


I can see a scenario in which he wins the nomination.


But not the presidency, you cannot imagine President Trump?


But I have a lot of confidence in Hillary Clinton.


We could be looking at the first female presidency by November.


Do you think that would feel different?


Should it feel different if a woman is the president?


I think it will feel enormously different.


We can say women have got there, but in fact, in the corridors


of power, and let's face it, the Oval Office is the ultimate seat


of power, certainly in the United States and in many


ways in the world, having a woman in that


position does say to every woman and every girl,


His lifelong hero was Earnest Shackleton,


across the Antarctic that Henry Worlsley was trying


to recreate - with the huge, added challenge that Worsley


Like Shackleton, his bravery and his willingness to endure


endless, uncharted terrain led him into a desperate race for survival


The British explorer died of organ failure,


tragically, when the end of the mission was almost in sight -


just 30 miles remained of his 1,000-mile journey.


Prince William has led the tributes to the former SAS officer,


who died raising money for wounded soldiers.


All alone in Antarctica, Henry Worsley kept an audio diary of his


extraordinary trek. He hoped to achieve what his great hero, Sir


Ernest Shackleton, had failed to do a century earlier, and cross this


great white wilderness. On earlier accompanied adventures, Worsley


settled down for the long evenings with Shackleton's writing. We would


read the heart of Antarctica every night, and pick out bits of his


diary that are absolutely spot on to where we have got two on the


journey. Very meaningful, brings it all to life, particularly the


description of the views he can say and the trouble he is having with


his ponies, and even the weather. He had worse weather than we are


having. Shackleton is one of the great romantic figures of British


exploration. His epic mission failed after his ship was crushed by ice,


but he kept his men alive. They all came home again. He is remembered in


an exhibition at the royal geographical Society in London. I


think it has a lot to do with the psyche of the British public in


terms of the storytelling that goes with all of these expeditions,


because they are handed down to us through generations. There is always


a willingness for somebody to give up something for others. Those were


the equivalence of Nasa sending men into space. They have a sense of


where they were going. They had all the equipment and the skills they


could have individually, but ultimately, it was the men in the


wilderness environment. On his earlier journey in the South


Pole, Henry Worsley reached the spot where Shackleton decided he couldn't


go on. The decision to turn back must be one of the greatest


decisions taken in the whole annals of exploration, particularly polar


exploration. He came so close. He pioneered this route, 850 miles.


Every day, he was seeing new sites. 97 miles to go, and turns round when


such a glorious prize is staring him in the face.


I'm joined by record-breaking Polar explorer, Caroline Hamilton,


and from our Birmingham studio, professional explorer Mark Wood,


who was a friend of Henry Worsley and has completed over 30 major


expeditions around the world, including a solo expedition


Mark, I know you were good friends with Henry and we really got a sense


in that film of the man at the heart of this tragedy. How did you see


him? Well, I met Henry when I arrived at the South Pole in 2012,


after my solo attempt there. I found it extraordinarily difficult to


reach the Pole itself, and when I first met Henry, he was full of


smiles and fun and laughter, and then I found out five minutes later


that he had just completed an 80 day plus expedition himself. So an


extraordinary, strong willed, powerful man, with a deep sense of


humour. Do you understand that need for solo exploration? It seems to be


quintessential to this expedition, that drive to do it alone. Yeah.


Exploring is either about what you walk through and what you see more


or what you feel internally. To do a solo expedition is a different step


altogether. You can't train for it, you just have to be thrown into the


deep end. I can understand why Henry wanted to take up this expedition


historically, but also for personal reasons. That is why we export to


begin with. It all becomes personal. Caroline, how do you explain to


somebody who is not an explorer just why you would take your life in your


hands like this to achieve something like that? I think it is about


challenging yourself. It is there, it is a wonderful thing to do. As


Mark has been saying, when you are out there, you have an inner journey


going on at the same time as the outer journey. And Antarctica and


the Arctic are incredibly beautiful. It is such a privilege to be there.


The whole thing as an assault on every sense. Not just what it looks


like, it is what it sounds like and smells like, and to be able to bend


70 or 80 days, however long you are out there it a huge privilege to be


in a wonderful part of the planet. You are talking about conditions of


-40 or lower. What does the cold do to you mentally and to your actions?


It affects everything. I remember many evenings in the 10th, where you


are melting snow to a quarter to drink and to make your food with --


in the tent. And as you melt the water, you get steam coming out from


the water. You have condensation from your own breath. I remember


days digging in the tent when the whole place would be in a kind of


fog and nobody could give anything to say to each other except how cold


we were. We couldn't see each other. We couldn't think of anything to


say. Mark, when you heard, in the film, Henry describing that moment


for Shackleton, the agony of turning back, does that perhaps tell you


something about why he himself left it so late? It is difficult to say,


but I think if you are travelling as a team, then when you get medical


conditions and you have other people to add their judgment to it, I think


if it was a team approach, the expedition would have stopped


earlier. But because Henry has got this tremendous drive and


determination in him, any injuries that come up, you think you can get


through it. I can't really speak for the situation, but I presume it was


sheer determination, that he thought he could get past it and reach the


final goal. And do you think that ultimately, that was where it went


wrong, that you lose your sense of judgment of how bad things have got?


Yeah, again, it is difficult to say, but I would say that you haven't got


anything to measure it against apart from yourself. So I think he pushed


it as far as he could and then literally, his body said Noel, I


can't do this any more. -- his body said no. The problem with great


explorers like Henry is that he has this real dog-eared British


determination to just go that bit further --. Determination. And it


might have been the ultimate decision, really. Caroline, when you


think how connected we all are all the time, in a way, that is what


makes a journey like this so extraordinary, the idea that you


don't see humankind, you don't have any contact. Is that what makes it


more attractive? That is part of the joy of it. You


are self-sufficient. If you're in a team, you have people to share


problems with and would can help with decision making. But even if


you're a small group, you're entirely self-sufficient in this


amazing wilderness, that is part of the appeal, yes. Thank you both very


much. The writer Ben Judah grew up


in London, but he says it's changed so much in recent years,


he no longer knows whether he loves In a new book, he attempts to get


beneath the surface of this new London, sleeping in subways


and squatting in a dosshouse, getting to know some


of the characters behind He made this film for us,


with some of the many people he met People see this place to be, like,


heaven. They think as soon as you arrive, you start plucking money off


trees and picking them from the floor, whatever. But it's entirely


different. I never dream of London. I can only see the buildings and


about the Royal Family in the movie. If you can call it British dream,


London dream, you name, it I think you can make it. This is the new


London. An immigrant megacity, where nearly 40% were born abroad. I was


born in London but I no longer recognise the city. I'm in search


the stories that make up its new soul. I'm currently working in the


cleaning industry. I'm a cleaner. How long is the commute? Takes me


about an hour. Who are the people on the train in the morning? Well, you


see a lot of people going to work, mostly immigrants. Going to work at


this time of the day. London is changing. Around half the street


sleepers are eastern European tramps. Is London difficult?


Difficult, yeah. I don't know English. I coming here, it's very


difficult. The people who coming here must speak the English language


first. After they find a job, England have the jobs. Nicolai is


off to find work. When it comes, it won't pay well. On the Romanian


black market, the lowest wage I saw was one chicken and chips for a


day's work. I don't have another solution, so I am on the streets. I


can't bank because I don't have address. When I go to the agency,


they want account bank to pay me. Where I go? I go in the street. He


touts for work on the kerb every day. This is the London I've


conculled, the city of beggars, black markets and doss houses. Why


do they come? Because for men of a trade, for the few, the London dream


can be real. I have literally ?250 in my pocket. I stayed in a room


with a friend of mine, which he was already here. And I went out


literally the next day to look for the job. I would stand on the corner


where you have all other chaps waiting for the work. I speak up


like the other people, that's how it worked those days. Every town in


Poland has its London son, the boy who made it. He inspires 100 more.


When all the Poles were coming, they were cautious about us. Now they're


much more open. They prefer us on the building sites. They prefer us


to do the building for them. Comparing to the native people. Fay


came from your home -- if I came from your home town and I asked -


should I come to London? What would you say? Yes, come over. I own three


companies at the moment. I've got some renting properties. I own a


house. I'm very happy. Do you think your children will be English first


or Polish first? Looks like they're going to be English first, because


we speak Polish at home, but they do speak English to each other. They


speak perfectly Polish, perfect English. But they still, I would


say, they are going to be more English than Polish. But mostly,


migrants clean, wait and guard the golden city, never to enter. Jesy is


from the Philippines. She works as a maid for the absentee owners of a


superflat. I have missed my family very much. I left my daughter when


she was one year and 11 months old. Because back home, I couldn't earn


money to support my family, so I have to make an arrangement with my


husband that one of us has to go and one has to stay to take care of my


daughter. She found work bringing up another child, a little boy. She was


a nanny. When the time came to go, she learned servants are never part


of the family. When it comes to the point that we need to say goodbye,


it's very hard for us this separation. I experienced it. Until


now, this boy still here if my heart. Are you still in touch with


the boy? The parents doesn't want them, doesn't want him to think


about me any more. So they told him that I left London. Yes. Because he


was crying and crying when I left. At night, London myrrh murmurs --


murmurs. To be poor this London is to be tired. For years, Wester


worked two jobs, cleaning day and night.


I had a dream of becoming a system engineer, Microsoft engineer. But


for now, I think I've gone astray. I'm still not giving up on my


dreams. I'm still working on it. I can't complain. I'm doing well in


the cleaning business. So, I can't complain. I'm not hungry. When you


told your friends in Ghana you were going to London, what did they say?


Everybody was happy. Like I said, some people back home think Europe,


once you step in there you become a rich man overnight. And even to


date, you still have some people calling and asking you for money.


Even if you tell them you are broke, no, you are not. When we see you


here, we know you're languishing, you know in riches and all that.


You're just being stingy because you don't want to send us no money. This


is what I want them to know that life is Notts all that milk -- not


all that milk and roses here in London. Did you find work today? I


don't. I don't find. Maybe tomorrow. Maybe tomorrow is another day. Every


day, it's another day, with a chance. The London gives one million


chance every day. Is it scary at night? It's all the crazy people.


Must be careful, in the night. The night is dangerous. London glows in


the villages of Africa, Eastern Europe and Asia, stirring up dreams.


Tempting, like the city of Oz. Senegal's most famous son,


Baba Maal has released his first album in seven years,


and he's in Britain performing it. Hes with us here,


tonight, with this song,


In-depth investigation and analysis of the stories behind the day's headlines with Emily Maitlis. Featuring the shadow chancellor on Google's tax arrangements, Anne-Marie Slaughter on Hillary Clinton, the death of Antarctic explorer Henry Worlsley, the migrant poor of London and Baba Maal.

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