Labour and Google: A curious connection

Labour politicians received lavish gifts from Google just before backtracking on a plan to increase taxes on digital companies. The timing raises questions about whether these gifts influenced policy decisions, with critics calling for more transparency.

D id Google’s generous gifts to senior Labour Party figures impact the party’s decision to scrap a proposed tax hike on digital giants? That’s the question many are asking, especially after Labour officials and their staff accepted nearly £10,000 worth of gifts from Google in the run-up to their policy U-turn. Let’s unpack this intricate web of politics, big business, and luxury freebies.

Labour’s shadow business secretary Jonathan Reynolds, MP for Stalybridge and Hyde, along with his wife and Keir Starmer’s political director, were treated to an all-expenses-paid trip to the Glastonbury festival in June, courtesy of YouTube — a Google-owned company, according to openDemocracy. The package, including accommodation and other perks, was worth £3,377, which stands in sharp contrast to the £335 cost of a regular ticket.

Policy U-Turn

Coincidentally, the day after the Glastonbury festival ended, Labour announced that it had shelved plans to increase the Digital Services Tax. This tax, a 2% levy on the UK income of online companies like Google, was supposed to go up to 10% under Labour’s proposal, which was still under discussion as recently as June 5.

Last year, Jonathan Reynolds and his colleague Rachel Reeves, Labour’s Shadow Chancellor of the Exchequer, argued that the revenue from increasing the Digital Services Tax to 10% would be channelled to cut taxes for small businesses. This policy change, now abandoned, would have been worth an estimated £3 billion to the British public.