Downright Corrupt

Adam Ramsay writes:

Senior Labour figures accepted valuable gifts from Google in the days before abandoning a plan to tax digital giants more, openDemocracy can reveal.

Labour’s shadow business secretary Jonathan Reynolds, his senior parliamentary assistant (who is his wife), and Keir Starmer’s political director all attended Glastonbury festival in June as guests of YouTube, which is owned by Google. Including accommodation and ‘hospitality’, Reynolds estimates his Glastonbury package for two was worth £3,377 – significantly more than the cost of two regular tickets, which were £335 each.

The next day, reports emerged that Labour had ditched its proposal to hike tax on digital businesses like Google.

The Digital Services Tax, introduced in 2020, is a 2% levy on the UK income of online companies like search engines and social media platforms. In August last year, Reynolds and his shadow chancellor colleague Rachel Reeves had called for an increase in the tax to 10%, saying the income would be used to fund a slash in tax for small businesses.

As recently as 5 June, Reynolds was still talking about the policy. Yet on 26 June this year, the day after Glastonbury ended, The Times reported that the policy had been ditched, with Labour saying it had “no plans” to raise the digital service tax when in government. Reynolds declined to comment.

It was not the only time senior figures in Starmer’s team accepted luxury gifts from Google in the months before the party’s U-turn. Shadow culture secretary Lucy Powell’s political adviser, Labour’s executive director of policy, and the party’s head of domestic policy all accepted tickets and transport to, and ‘hospitality’ at, the Brit Awards in February from the digital giant. Powell’s register of interests estimates that the adviser’s ticket was worth £1,170.

Starmer’s political director also accepted transport to and ‘hospitality’ ahead of the event from Google, though his ticket, along with that of Starmer’s private secretary, was covered by Universal Music.

YouTube will sponsor an event at Labour’s annual conference next month with the chair of the business and trade select committee, Darren Jones. The talk, hosted by the New Statesman Media Group, will be on “harnessing tech for growth”.

Last week, openDemocracy revealed that Starmer had accepted a £380 dinner from Google for him and one staff member during the World Economic Forum in January.

In total, openDemocracy estimates that Labour shadow cabinet members and their staff accepted luxury gifts from Google worth nearly £10,000 over the months before they announced their policy U-turn. By contrast, the value to the British public of the policy Labour appears to have ditched is estimated at around £3bn.

Nick Dearden, director of Global Justice Now, said: “This is a really very worrying set of events which suggests that big business has far too much access to senior opposition politicians.

“But this isn’t simply about foolish behaviour on the part of the individuals concerned. In office, Labour needs to radically restructure our economy if it’s to have any hope of creating a more sustainable and equal society, and undoing the damage of recent governments. To do that, they must take on vested interests, like the Big Tech monopolies, which have far too much wealth and power.”

Staff for other Labour shadow cabinet members have also accepted valuable gifts from controversial companies. A political adviser to the shadow chancellor Rachel Reeves, accepted two ‘box’ tickets to a Harry Styles concert worth £700 each from BT. In the 2019 Labour manifesto, the party committed to nationalising BT, a measure the company opposed. It’s not clear whether the party maintains this policy, but Reeves has distanced herself from other nationalisation plans.

In April this year, BT announced a 14.4% average increase in its prices, and £1.7bn in profit. An Openreach spokesperson said: “As you’d expect from any major employer investing billions into the UK, we engage regularly with a range of stakeholders to support the interests of our people, our customers and our business. Any hospitality is consistent with the rules, fully declared and transparent.”

Labour did not respond to requests for comment.