Martin Flanagan: More to business rates than executive pay

Matt Brittin, president of Google Europe, Middle East and Africa, told the Commons Public Accounts Committee that he couldn't remember how much he earned

WE'VE all been there at some time, haven't we? When it just slips your mind how much you are paid. The pressures of modern life and all that. You cannot be expected to keep all the petty details front and centre amid the ambient noise.

The appearance of top Google directors at the House of Commons public accounts committee last week was good knockabout value due to the amusing disconnect between po-faced executives and histrionically dyspeptic MPs about the tech giant’s controversial UK tax arrangements, retrospective sweetheart deals and all.

The killer exchange, one encapsulating the dialogue of the deaf between British indignation and multinational America on corporation tax, was when committee chairman Meg Hillier repeatedly asked Matt Brittin, the head of Google in Europe, what he earned. He couldn’t remember.

Showing magnanimity in defeat, the hapless American said he would happily provide MPs with the information when he found it out. In short, this was an argument even the most superior search engine could not have found a rejoinder for.

If a top executive of a global titan does know what his or her remuneration is, but feels it might exacerbate the wider dispute about the corporation tax his company pays, they are being disingenuous.

If they are telling the truth and really don’t know what they are paid, it speaks absolute volumes about the corporate culture within their organisation and shows why they just don’t get the furore about the minimal, if strictly legal, amounts of tax they have been paying in the UK.

Meanwhile, someone with far more finely-tuned political antennae than our friends across the water, former Sainsbury’s boss Justin King has, with impressive timing ahead of the Chancellor’s business rates review, suggested that the problem of one-way escalator business rates are a much bigger issue for British retailers than any corporation tax pyrotechnics in Westminster.

King said there is a major competitive imbalance between the business rates that UK retailers with chains of stores have to pay compared with major online players like Amazon and eBay, etc, with just their scattering of big warehouses.

It is one of those situations where the big corporation tax grabs the headlines while the small – business rates – has a greater impact but somehow loses out because of its perceived mundanity.

The business community will hope George Osborne delivers tangible measures – particularly more frequent property revaluations – when the review into business rates is published either in or around the time of next month’s Budget.

Just because a problem has been around for a long time and lacks media stardust does not mean that it is an insignificant issue that should therefore be kicked into the long grass. Reforming business rates may be prosaic, but is as valuable an objective as getting multi-nationals to cough up. «