Guardian News and Media/London


Ed Miliband has vowed to rip up the rule book as prime minister and go it alone if there is no international consensus to tackle multinationals engaging in massive tax avoidance.
In an interview with the Observer, the Labour leader urged David Cameron to find agreement at the G8 summit of leaders next month around an ambitious agenda - forcing corporate giants to pay their fair share.
He said that, if Cameron fails, he himself as prime minister would unilaterally act to make multinationals operating in the UK more transparent about the money they make here, the movement of cash around their corporate structures, and the justifications for the tax they pay.
He also pledged to increase the resources of HM Revenue and Customs to strike at tax cheats.
Miliband, who will speak at a Google event in Hertfordshire on Wednesday, said he believed some multinationals, including the Internet giant, were not living up to their responsibilities to society.
Google was accused by MPs last week of being devious, calculating and unethical after it emerged that it paid just £3.4mn in tax on £3.2bn of sales taken from UK customers last year as the sales were technically “closed” in low-tax Ireland.
Miliband said: “Now, what is the politicians’ responsibility: change the law. But it is also to talk about the kind of society we want to create and what the responsibilities of a company like Google are. I don’t think they are living up to their responsibilities at the moment, and I will be very clear about that on Wednesday.
“It is part of a culture of irresponsibility. If everyone approaches their tax affairs as some of these companies have approached their tax affairs we wouldn’t have a health service, we wouldn’t have an education system. And actually the point I will make at Google is that will undermine Google.”
Meanwhile Eric Schmidt, executive chairman of Google, writing in the Observer, has given his first reaction to last week’s criticism of his company by MPs on the public accounts committee. He says tax avoidance is rightly a “hot topic” in difficult economic times and urges genuine reform, but adds: “Politicians not companies set the rules.”
But, in a major policy announcement, Miliband says a Labour government would engender a more responsible capitalism in the UK by changing those rules with or without international agreement.