Technology

technology

Driverless cars, pilotless planes … will there be jobs left for a human being?

May 19, 2013
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Throughout history, economic upheaval has destroyed whole industries – and created new ones. But now, some fear automation may mean the death of mass employment

Suddenly a robotised, automated economic reality is moving off the science fiction pages and into daily life. The growing use of unmanned battlefield drones is encouraging the growth of pilotless commercial aircraft – the first ever flew in British airspace last month. Google’s driverless car is completing ever more trials ever more successfully: the world’s major car companies are all hot in pursuit, working on their own prototypes of their own versions. The automated checkouts at supermarkets are becoming as familiar as bank cash machines. From staff-free ticket offices to students who can learn online, it seems there is no corner of economic life in which people are not being replaced by machines.

This is the “Great Reset” – a cull of broadly middle-class jobs with middle-class incomes that is apparent across the west, but with little current sign of what industries and activities will replace them.

The world has lost millions of jobs before – on the land or in the old horse-powered economy – but they were soon replaced by jobs in the car industry or the new service industries. What worries many economists and computer scientists is that today’s technologies are going to remove people from economic activity completely. Some argue that a dystopian world is emerging in which good jobs and full-time employment will become the preserve of an educated, computer-literate elite. For example Apple, Facebook, Amazon and Google are plainly riding the new wave, but they are not mass employers like Tesco, Ford or General Motors. 

Moshe Vardi, a computer scientist at Rice University, asks if we are ready for a world in which half the adult population does not work. The Great Reset – the economy resetting itself, after a major technological shock, to deliver jobs for all – may never happen.

The omens are all around. The US economy has never generated so few jobs in an upturn since records began. In Britain, the Resolution Foundation charts the ongoing squeeze on low and middle incomes, and observes brutally that already Britain has the second highest proportion of low-paid jobs in the developed world. The formal unemployment numbers, now ominously rising five years since the crisis began, do not capture the full extent to which the economy is not delivering good work.

Plainly some of the explanation is that the economy is still reeling from the effect of the financial crisis and the accompanying vast overhang of private debt. But economies have an embedded resilience. Output will return to the levels of 2008, probably some time next year. There will be an economic “recovery”. But this raises the question: what happens afterwards?

Think through the implications of the driverless car. These will be vehicles whose complex sensors allow them to communicate with one another, so that they know one another’s intended route. One of the reasons Google is investing so much is that whoever owns the communications system for driverless cars will own the 21st century’s equivalent of the telephone network or money clearing system: this will be a licence to print money. The benefits are endless. Roads will both be able to carry more traffic and be safer. Personalised door-to-door transport will become hugely pleasurable: your car will deliver you to your home or place of work and then park itself without you. Road accidents will plummet. Energy efficiency will be transformed. Insurance rates, even the need for insurance, will plunge. Personalised transport, ordered by your mobile phone, will gradually replace mass transport networks.

But the implications for employment are awesome. Thomas Frey, senior futurologist at the DaVinci Institute, lists taxi-, bus- and truck-driving as soon-to-be-extinct occupations – along with traffic police, all forms of home delivery and waste disposal, jobs at petrol stations, car washes and parking lots. The cars themselves will be made by robots in automated car factories. The only new jobs will be in the design and marketing of the cars, and in writing the computer software that will allow them to navigate their journeys, along with the apps for our mobile phones that will help us to use them better.

Professor Larry Summers, former US treasury secretary, thinks that the challenge of the decades ahead is not debt or competition from China but the dramatic transformations that technology is bringing about. Summers believes that the transition to the automated economy that robotisation implies has only just begun. The invention of 3D printing, in which every home or office will be equipped with an in-house printer that can spew out the goods we want – from shoes to pills – anticipates a world of what Summers calls automated “doers”. They will do everything for us, eliminating the need for much work. The only jobs will be in writing the software and building the “doers”, creating a bifurcation of the labour market that is already discernible.

At least Summers sees some underlying economic dynamism. For techno-pessimists such as economist Professor Tyler Cowen the future is even darker. It is not only that automation and robotisation are coming, but that there are no new worthwhile transformational technologies for them to automate. All the obvious human needs – to move, to have power, to communicate – have been solved through cars, planes, mobile phones and computers. According to Cowen, we have come to the end of the great “general purpose technologies” (technologies that transform an entire economy, such as the steam engine, electricity, the car and so on) that changed the world. There are no new transformative technologies to carry us forward, while the old activities are being robotised and automated. This is the “Great Stagnation”.

That is a very lopsided view of the future with little recognition of the opportunities. The growth of transformative technologies is not tailing off: as scientific knowledge explodes and crosses new boundaries, they will accelerate. The 21st century will witness more technological and scientific advance than in the last 500 years. The pace of change is certainly accelerating – business models today already become obsolescent in less than 20 years, and that figure is going to fall further. But human demands are infinite. Notwithstanding robotisation and automation, I identify four broad areas in which there will be vast job opportunities.

The first is in micro-production. There is going to be a huge growth in micro-brewers, micro-bakers, micro-film-makers, micro-energy producers, micro-tailors, micro-software houses and so on who will deploy the internet and micro-production techniques to produce goods at prices as if they were mass-produced, but customised for individual tastes.

The second is in human wellbeing. There will be vast growth in advising, coaching, caring, mentoring, doctoring, nursing, teaching and generally enhancing capabilities. Medical provision will explode, with replacement organs, skin and limbs opening up new specialisms and industries. Taste, sight and hearing will be vastly enhanced. Ageing will be deferred, with old-age advisers offering advice on how to live well in one’s hundreds. Geneticists will open up a live-well economy. Instantaneous language translation will break down language barriers.

The third is in addressing the globe’s “wicked issues” . There will be new forms of nutrition and carbon-efficient energy, along with economising with water, to meet the demands of a world population of 9 billion in 2050. Space exploration will become crucial to find new minerals and energy sources. New forms of mining will allow exploration of the Earth’s crust. The oceans will be farmed.

And fourthly, digital and big data management will foster whole new industries – personalised journalism, social media, cyber-security, information selection, software, computer science and digital clutter removal.

Doubtless the futurologists can come up with more: the truth is, nobody knows. What we do know is that two-thirds of what we consume today was not invented 25 years ago. It will be the same again in a generation’s time. What is different is the pace of change, obsolescence and renewal – and new dangers of extraordinary inequality not just in wages, but in working possibilities. Firms and individuals will be on their mettle to open up, innovate and constantly reinvent themselves. If there is to be a successful Great Reset, Britain will need the open innovation structures, financing mechanisms and social support institutions to capitalise on the opportunities quickly, rather than be overwhelmed by the risks.

This is what threatens our future, our living standards, and this is what we should be arguing about  – not the European Union, despite the efforts of Ukip and the Conservative party. Those whom the gods wish to destroy they first make mad.

Will Hutton

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One tax law for us and another for Amazon | Nick Cohen

May 19, 2013
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Britain’s reluctance to pursue multinationals risks turning us into another Italy

On the edge of Rugeley stands Amazon’s largest distribution centre in Britain. Life for the workers who trudge around the 800,000 sq ft warehouse is not as bad as it was for the men who once worked in the pits of the Staffordshire coalfield, but that is not saying much. They must carry satnavs, which direct their movements round the stacks and flash warnings from managers to stop dawdling or chatting with colleagues. Britain being the way it is, they have no job security.

Trade unionists call the Amazon shed a “slave camp”. But whatever arguments they have with Amazon’s management, one point should be beyond dispute – Rugeley is in Britain. British customers send Amazon their money. British workers package their goods and send them off in vans along roads built and maintained by the British taxpayer. If workers steal – and before they can go home or visit the canteen, they must walk through airport-style security scanners to prove they have not – Amazon will call on the taxpayer-funded police to arrest them and the taxpayer-funded criminal justice system to prosecute them. Admittedly, Amazon’s buyers who supply the stock are based in Slough rather than Rugeley. But the last time I looked Slough was in Britain too.

Amazon.co.uk is a UK company. It has to be. An online retailer cannot relocate offshore. It needs local distribution centres to service local markets, otherwise the costs of moving its stock would be ruinously expensive.

Yet Amazon pays just £3.2m tax on sales of £4.2bn because the Revenue allows it to get away with arguing that it should be taxed in Luxembourg. The same lack of connection between corporate tax status and commercial reality applies to Starbucks, Google, Vodafone, Goldman Sachs and every other company the British state allows to dodge tax.

The traditional defence that companies just take advantage of legal loopholes and you would “do the same in their position” falls apart in a country where the tax regime defies the evidence of our eyes. Leaving all other considerations aside, you will never be “in their position”.

If you want to understand any society, look at its tax system. If one man or a clique can tax at will, you can conclude the society is a dictatorship or oligarchy. If you have reasonably progressive and universal taxes, you can assume it is a modern democracy. Britain has elements of democratic taxation. The same rules on occasion apply to everyone. But other parts of the system resemble the ancien régime of pre-revolutionary France. Only in our case the privileged estates the government exempts from taxation are the corporations rather than the aristocracy and the church.

For a generation, politicians have extended exemptions by selling Britain as a country where big businesses would be lightly taxed. When I put it like this, I make the policy sound too cool and rational. The process was far more emotional than that. Tycoons enchanted politicians. They convinced them that their interest and the national interest were as one. So deep was the ideological capture of the top of the British state that corporations have not on the whole had to corrupt ministers.

No one has accused Gordon Brown of taking bribes, to quote the most egregious example. But in his abject period as chancellor, Brown ensured that his friends in private equity were taxed at a lower rate than their cleaners. One might have thought that the crash of 2008 would have discredited the notion that all will be well if we let capitalism run riot. Not a bit of it. George Osborne invites multinationals to advise him on how to tax multinationals. At their behest, he allows companies to move money to tax havens and then deducts the costs of their shady transactions from their British tax liabilities. The result of two decades of special treatment for vested interests can be summarised in one statistic. Between 1999 and 2011, British companies’ profits increased by 58% but revenues from corporation tax increased by just 5%.

To understand the scale of the avoidance, it is not enough to look at the permissive laws, however. Richard Brooks’s The Great Tax Robbery is close to being this year’s indispensable book because, as a former tax inspector turned Private Eye journalist, he has the material to show how the wealthy are exempt from what few laws apply to them.

“Dear Saddam,” ran a spoof letter doing the rounds of the Revenue in the run-up to the Iraq war, “we are trialling a new weapons inspection regime modelled on the Inland Revenue’s approach to large corporate taxation. All you have to do is tell us you don’t have any and we’ll go away.”

One inspector said in his bitter farewell speech that he once thought that the Revenue’s advertising slogan “tax doesn’t have to be taxing” was a bad pun. “Now I realise that for big business it meant what was said on the tin.”

British politicians and a series of negligent and doltish managers ordered the Revenue to back away from big business. In his justifiably notorious speech to the Confederation of British Industry in 2005, everyone remembers Gordon Brown promising “light-touch” regulation for a financial services industry that was already careering towards bankruptcy. We forget that he went on to say that he would apply a light touch to “the administration of tax” for big business as well.

The Revenue itself promises corporations that, rather than doing its job and collecting monies owed, it will follow a “customer-focused supportive and enabling approach”. Or as Dave Hartnett, the former permanent secretary for tax, who cut sweetheart deals with Vodafone and Goldman Sachs, explained it in 2010, Britain had a “non-confrontational” approach.

I have written before that the willingness of New Labour, the Tories and the Revenue’s senior managers to pursue the working and middle classes while exempting powerful corporations would turn the British into Italians. We would start to believe that tax evasion was respectable. We would view a state that hit the ordinary man and woman while sparing big business as immoral and illegitimate. That moment is drawing closer. The old complaint that there is one law for the rich and another for the rest does not do justice to the debasement of public authority in Britain. When it comes to tax, too often there is no law for the rich whatsoever.

Nick Cohen

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Amazon’s tax arrangements are nothing short of a work of art. Bravo!

May 19, 2013
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Amazon has come in for plenty of stick for paying so little tax in the UK. But its actions display such impish wit that it’s hard not to revel in the majesty of a terrible thing well done

There’s something fishy about Google’s motto, “Don’t be evil.” I’m not saying it’s controversial but it makes you think, “Why bring that up? Why have you suddenly put the subject of being evil on the agenda?” It’s suspicious in the same way as Ukip constantly pointing out how racist they’re not – which my colleague Charlie Brooker said on 10 O’Clock Live was, “rather like someone who’s just moved in next door saying, ‘Hi, I’m Geoff, your non-dogging neighbour.’”

But we mustn’t assume that the maxim was an attempt by executives to draw a line under some diabolical brainstorm, in which the internet giant pulled itself back from the brink of green-lighting a scheme to grind our bones to make its bread. It could just as easily have come out of a discussion of the possibility of doing good. “Always do good”, “Try to do some good” or “Be good” might have been previous drafts of the motto before they concluded that goodness was as impractical as malevolence was distasteful and decided on “Don’t be evil” as more realistic in a modern business environment. “Settling for one notch below altruism” is all the slogan really means.

Still, I suppose we should be grateful for small mercies. And there’s no earthly reason why Google should do any good to anyone but itself – which is presumably why it pays so little tax. Although that’s not how Matt Brittin, Google’s head of sales in northern Europe, explained the situation to the House of Commons public accounts committee on Thursday. “No one in the UK can execute transactions,” he said. He wasn’t bemoaning a lack of competence in British workers but proudly talking MPs through a tax dodge. Even though there are sales staff in Britain, “No money changes hands.” Nudge nudge, wink wink. Since the vast majority of Google’s £3.2bn of UK sales are routed through Ireland, the company paid only £6m of corporation tax. I’m not saying that’s necessarily evil, but it’s certainly not good.

Amazon, in contrast, has never ruled out evil as part of its business plan, aspiring only to “Work hard. Have fun. Make history.” It sounds like an Apprentice contestant’s Twitter profile. Last week it emerged that, despite £4.2bn of UK sales, the company paid only £2.4m in corporation tax in 2012. In the same year it received £2.5m in government grants. Which makes it a net benefits scrounger. And, in terms of sheer rapacious acquisitive nerve, I’d say that has made a little bit of history.

Is there any point in my being angry about this? Everyone else already is. It feels like the interesting thing would be to come out in favour of it. After all, as the company’s spokesman proudly announced: “Amazon pays all applicable taxes in every jurisdiction that it operates within.” So maybe it’s fine. Better than that, maybe it’s crazy and interesting. It’s a challenging artwork, but instead of oil paint or wood or clay or the excrement of the artist, it’s constructed out of pure injustice. A huge, malevolent sculpture of unfairness, ground-breaking and thought-provoking, reminding us of the iniquities of the natural world – a corporate metaphor for the worms that will one day eat all of our corpses.

Like any really important work of art, it’s bound to upset a few people. Just as Banksy causes collateral damage to the neatness of walls, so Amazon’s masterpiece is a defacement of the public purse. But it’s not just some hooligan’s tag, like Google’s artless Irish scam. This shows an impish wit and a dark insight. What elevates Amazon’s activity is the fact that it applied for government grants. The elegance of that corporate choice is like the ambiguity of the Mona Lisa‘s smile, the ruthlessness of Mike Tyson’s punch and the adaptability of the malaria virus combined. There is no point in criticising anyone or anything that can do that. They can only be admired or destroyed.

The more you think about it, the more brilliant it is. At first glance, the deftness of securing government funding, which was intended to sustain and encourage marginal businesses, is rather pleasing. The thought of the thousands of small enterprises that could have been nourished and helped to survive by the cash Amazon has swallowed in one tax-cancelling mouthful is challenging and absorbing. It’s the monster that’s made a myriad food parcels into its canapé.

But it gets even better. If, for a second, you make the mistake of thinking that giving Amazon handouts might nevertheless help the UK – by incentivising the company to create jobs in Britain even if, for tax purposes, it exists only in Luxembourg – then think again. Because Amazon is the great job-killer. For every job it creates, more than one is destroyed on the high street. It’s the great annihilator of work and yet it’s receiving a job-creation government subsidy. It doesn’t just absorb money that would be better spent creating employment elsewhere, it deploys it to decimate the chances of that employment.

I understand that the changes in work and business patterns being caused by the internet are inevitable and irreversible. To try to stop them would be railing against the tide. Still, it’s amazing that Amazon, in an act of dazzling contempt, has persuaded the treasury actually to pump water into the rising sea.

I don’t really think that these problems can be fixed. It’s the role of politicians to say that something must be done – with a sense of purpose if in power, and outrage if in opposition. But their jobs are too tenuous and short-lived, the international tax system too complex and the corporations too tenacious to stop this sort of thing happening. Loopholes will crop up by accident and, where they don’t, the intense and remorseless lobbying of the already astronomically wealthy will ensure that more are created.

We can work ourselves up in impotent fury or – and this is a calmer way to live – just sit back and enjoy the majesty of a terrible thing done well. Amazon’s tax and grant arrangements are the beautiful ivory candlestick revealed by the silhouettes of British taxpayers’ incredulous faces. The politicians and public provide the backdrop of incompetence and rage in front of which huge companies can display their work of corporate perfection. As the mushroom cloud showed us decades ago, evil can be beautiful.

David Mitchell

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Metro: Last Light – review

May 19, 2013
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A post-apocalyptic Moscow metro system is a great setting for some serious gunplay

The original Metro 2033 was a sleeper hit, earning praise for its sharp blend of tense, post-apocalyptic terror and superb action long after its release. No surprise though, as the Metro games are far deeper than even hardened players might expect from a first-person shooter.

Based on the novels of Russian author Dmitry Glukhovsky, Metro: Last Light follows Artyom, a young man trying to survive in the ruins of Moscow’s subway system, a network serving as humanity’s refuge after a nuclear war.

The world Glukhovsky created is presented in fine form here, visually through a claustrophobic web of crumbling tunnels and a ruined surface populated by mutated abominations, and narratively with a story that examines fascism and communism, prejudice and the pursuit of power.

As a result, the gameplay almost becomes a slave to the story but despite this, Last Light is a delight. The survival horror and FPS elements complement each other as well here as they did in the original, with the urge to blast every flickering shadow tempered only by the scarcity of resources.

A superb effort, written and presented with a skill that proves games can be both as complex and rewarding as any other art form.

Matt Kamen

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Persona 4 Arena – review

May 19, 2013
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This Japanese 2D fighting game sequel is very different from its predecessor but just as impressive

Persona 4 Arena’s brand of 2D fighting is, at first glance, a far cry from its brilliant RPG forebear. Once players spend time with this intricately balanced and beautifully animated beat-’em-up though, they will discover it is every bit as deep and involving as its predecessor.

Arena sees lead Yu Narukami drawn into another mystery in the parallel Midnight Channel world. This time, it involves being forced to fight his friends while finding out exactly why. The battle system is remarkably complex, demanding mastery of blocks, attack breaks, counters and more, plus awareness of power and health gauges. While far from entry-level, Arena will appeal greatly to fans of the original Persona 4 and lovers of top-tier Japanese fighting games.

Matt Kamen

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Web-connected libraries for Africa: the dream of digital knowledge for all

May 19, 2013
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New venture Librii is seeking to set up self-sustaining libraries with internet access in poor and isolated communities

A decade ago, Brewster Kahle, philanthropist and founder of the Internet Archive, created the first digital bookmobile: a complete printing press in the back of a car. With a power source, satellite internet connection, printer and binder, the vehicle and its descendants subsequently printed thousands of public-domain books where they were needed most, such as in rural areas without internet connection, including schools and refugee camps across Africa.

In 2003, it was estimated that less than 1% of Africa’s population had access to the internet. Since then, that figure has grown to just 15%. Private companies have been laying high-speed cables along the coasts, but it’s slow to make progress inland: even where access is available, it is often low speed and unconnected to the facilities on the ground needed to make the most of it, particularly for education. (The vast majority of people in Africa who do access the internet do so via mobile phone.)

Now, with an initial funding of $50,000 from Kickstarter, library startup Librii is building its first “eHub” prototype: a shipping container filled with computers, printers and training materials, connected to a simple, low-cost study centre, which will let visitors access information, print books and other materials and, crucially, contribute back to the project and the web at large. Once the prototype is complete and tested, a partnership with the University of Ghana and Librarians Without Borders is intended to start shipping the embryonic libraries to Africa, following the frontiers of fibreoptic cable as they push into the continent. While Librii is an NGO, the libraries will be fully self-supporting after the first year, seeking local sponsorship and generating their own income. Recognising that local knowledge, architecture, infrastructure and education are all vital components in the project is what makes Librii’s approach an exciting one.

James Bridle

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Fast and Furious 6 – review

May 19, 2013
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Reading on mobile? See the trailer here

In the sixth film in this profitable sex, speed and demolition franchise, Dwayne Johnson (formerly known as “the Rock”) as an Interpol officer uses moral blackmail and promises of amnesties to lure a crowd of freewheeling, fast-driving international criminals from their romantic lairs in sunny climes to defeat a renegade SAS man who has accumulated top-secret military equipment to hold the world to ransom. This is an excuse for mayhem on a spectacular scale mostly in Britain and Spain as a band of petrolheads led by the appropriately named Vin Diesel use mechanical torsion to defeat malevolent extortion.

The endless chases, stunts and fights are as spectacular and preposterous as the occasional verbal exchanges are sentimental and childish. An illegal road race through the night streets of London’s West End is particularly brilliantly staged. “The Rock” forces the Metropolitan Police’s security to release restricted documents merely by squeezing a top cop’s hand to pulp, thus applying enhanced interrogation to the special relationship. The end credits promise that Jason Statham will be joining the team in the next episode.

Philip French

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Mario and Donkey Kong: Minis on the Move – review

May 19, 2013
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The fifth instalment of the series brings path-building puzzles galore, if you can stand the fiddly bits

Nintendo has created something of a stealth franchise with the Mario vs Donkey Kong series – this is, almost unbelievably, the fifth entry. Minis on the Move shifts attention away from puzzle-platforming to the path-building brainteaser.

Essentially an inverted tower-defence game, clearing each stage means guiding toy versions of Mario and friends past such perils as spike pits and wandering enemies. Early levels are deceptively simple until a steady trickle of new gameplay mechanics, including rotating squares and sliding panels, increase difficulty considerably.

Persistence will mostly win out, though fiddly and unresponsive tile-swapping sections will test the patience of even the most devoted Mario fans. A charming, largely enjoyable puzzler, well suited to the portable form.

Matt Kamen

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Fury at corporate tax avoidance leads to call for a global response

May 19, 2013
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Anger over the financial affairs of multinationals such as Google, Amazon and Starbucks is gathering momentum in Westminster. Now the UK is poised to lead the debate about international tax reform at next month’s G8 summit

Huge orange and green cranes hover over a vast building site at King’s Cross, London. Over the next three years, 2.4 acres of this site will be transformed into a million square feet of an 11-storey headquarters for the internet giant Google, no doubt chock-a-block with colourful Big Brother-house-style sofas and surreal chill-out zones that mark out its other 70 offices in 40 countries.

The property deal is estimated to have cost around £1bn and was heralded by the site’s development consortium as the “most significant property transaction of recent years”.

“This is a big investment by Google, we’re committing further to the UK where computing and the web were invented. It’s good news for Google, for London and for the UK,” said Matt Brittin, vice-president for northern and central Europe, when the purchase was announced in January.

Like Amazon, Google is seeing increasing success in the UK where one in every $10 of sales is now generated. Yet both firms claim they are merely touching down on UK soil, without a “permanent establishment” and therefore are not paying tax on profits from billions of pounds worth of sales made here.

On Wednesday, Google won the advertiser of the year trophy at the 54th annual Clio Awards – the Oscars for advertising professionals. Accepting the award in New York, Robert Wong, chief creative officer of Google Creative Lab, said: “At the highest order, our job is to remind the world what it is they love about Google.”

That popularity has hit a serious snag. The next day the company was branded “evil” by Margaret Hodge, chair of the public accounts committee, while this weekend Ed Miliband called it “irresponsible”. “If everyone approached their tax affairs as some of these companies have approached theirs we wouldn’t have a health service, we wouldn’t have an education system,” he said.

Along with Amazon and, before that, Starbucks, Topshop, Boots, Vodafone, Goldman Sachs and Greene King, Google is the latest to have become the target of grassroots hostility towards their aggressive tax avoidance policies. The actions of these corporations are not illegal, nor underhand, but especially when we’re all supposed to be in austerity together, jarring horribly with public opinion.

Something “doesn’t smell right”, as the Guardian’s editorial said this weekend, after it ran an account of the extent of Amazon’s dealings in the UK, far wider than what its tax lawyers are implying.

The debate is now raging over whether these companies are the happy beneficiaries of a tax system knitted with loopholes, or the malicious purveyors of smoke-and-mirror accounting. HM Revenue and Customs claims the former – public opinion is rolling towards the latter. Lin Homer, chief executive of HMRC, claimed the public don’t understand. Asked why she was not taking a tougher line with internet giants, she told the public accounts committee: “We see, but understand more fully, some of the information that might seem to the general public to be surprising.”

But campaigners say tax collectors and leading politicians have been caught out; too engrossed in austerity plans, they are scrabbling to keep up with people who point out that there are other ways to balance the books.

“Without a doubt, they are behind the curve,” said Richard Murphy, a chartered accountant, economist and founder of Tax Justice Network. “They have all been caught by surprise because this has come from civil society, a campaign that has been going on for almost a decade but has only been picked up by politicians after the banking crisis when they suddenly realised they were desperately short of cash.”

He said HMRC had been ducking tax avoidance completely. He said it had powers to tackle any suspect tax returns of foreign-based companies. “If the breach is blatant, then they can act. What we haven’t got is politicians who will stand up to this. It’s a critical point. If the state will not stand up for its right to tax big corporations then we are in deep trouble.”

UK Uncut began campaigning on the issue in 2010 and it was its legal challenge that revealed how HMRC waived a £20m bill for Goldman Sachs, as well as a £6bn bill to Vodafone. Journalists, tax experts and campaigners have been investigating and exposing the tax scams being perpetrated by big businesses for far longer – pointing out glaring loopholes in Britain’s tax system.

When Matt Brittin of Google told the public accounts committee in November 2012 that Google did not have a sales presence in the UK, it was the news agency Reuters that quickly uncovered evidence to the contrary, resulting in Brittin being recalled in front of the committee on Thursday, where his company’s behaviour was described as “devious, calculated and, in my view, unethical” by Margaret Hodge.

“You are a company that says you ‘do no evil’. And I think that you do do evil,” said Hodge, referring to Google’s motto, “Don’t be evil”.

Amazon may also be recalled, after numerous whistleblowers from among its employees approached journalists to contest official accounts of its trading practices within Britain.

For the moment the government’s line is that this is a global problem that cannot be solved unilaterally. On Monday, Google’s executive chairman, Eric Schmidt, will meet David Cameron, a meeting No 10 insists is not about tax, but to do with Schmidt’s role on the prime minister’s business advisory group.

Labour leader Ed Miliband, who is due to give a speech to Google employees on Wednesday, has backed a “country by country” international scheme on tax declaration but says that he is concerned that no firm proposals have so far been put forward for the G8. “You have to have much greater transparency. Tax offices have to know country by country how much profit people are making, how much tax they are paying. Unless you know that you won’t get to the bottom of what is happening. You have to deal with tax avoidance schemes. You have to deal with tax havens.

“We are saying there has to be a big, big push on this. It has to be done internationally and if it is not done internationally, Britain should act on its own.”

All eyes will be on what, if anything, can be agreed at next month’s G8 meeting in Scotland, where, as host of the event, David Cameron has pledged to put tax avoidance at the top of the agenda as he insists it is an issue for international co-operation rather than unilateral action.

And it would not be just the wealthy who would be watching the progress of the talks, said Melanie Ward, head of advocacy at ActionAid UK.

“At the G20 summit in 2009, Gordon Brown led the beginnings of a global crackdown on tax havens and, for the first time, put an emphasis on helping poor countries to deal with the losses to tax havens that cost them three times as much as they receive in aid each year. But in the intervening years, tax dodging died away as a big UK issue,” she said.

“It’s shot back up the agenda with rising public anger over the antics of Starbucks, Google, Amazon and reports of sweetheart deals between the government and Goldman Sachs. The UK should close tax loopholes, but the truth is that the UK is responsible for one in five of the world’s tax havens in the form of many of the crown dependencies and overseas territories. These tax havens are a leech, sucking resources from the UK and poor countries alike, so action needs to start with pulling them into line.

“Ultimately, this is a global problem and the solutions are global. That’s why David Cameron must lead the G8 to deliver an unprecedented assault on tax dodging when it meets next month. This means calling time on tax havens and ensuring that poor countries are at the heart of any new deal to share tax information between countries.

“There is a serious risk that a deal will be agreed between rich countries and tax havens that would leave poor countries out in the cold. This would be entirely unacceptable. Tax dodging is hurting ordinary people, wherever in the world they live.”

Richard Murphy said the moral case for international action had already been won. “We now just have to beat off the accountants and businesses who oppose democratic accountability to the state to get it,” he said.

Tracy McVeigh

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