Tories in Birmingham
He predicts a Brexit deal boost to the economy and sets sights on online firms
INTERNET giants will be hit with a new tax so they are forced to pay their fair share into Britain’s coffers, Philip Hammond pledged yesterday.
The Chancellor said the UK is ready to introduce its own levy on technology firms as talks on taking action at an international level have stalled.
Treasury officials are looking at a tax based on the revenues of online firms such as Google, Facebook and Amazon, instead of their profits.
A new levy would be a victory for the Daily Mail, which has campaigned for a special tax to help level the playing field between internetbased retailers and traditional ‘bricks and mortar’ stores.
Faced with online competition, Britain’s high streets have faced a bloodbath – with some of the country’s best known brands forced to shut shops with the loss of tens of thousands of jobs.
In his keynote speech to the Tory conference in Birmingham yesterday, Mr Hammond predicted a ‘deal dividend’ for the UK economy once an EU withdrawal agreement has been reached with Brussels.
The Chancellor said he expected a boost as companies unlock investment that has been put on hold since the referendum and households regain the confidence to spend.
Mr Hammond detailed his plans for a ‘digital services tax’ as he set out how the Tories need to ‘regenerate capitalism’ to tackle the challenges of the modern world and renew the appeal of the free market to a new generation. ‘The best way to tax international companies is through international agreement,’ he said.
‘But the time for talking is coming to an end and the stalling has to stop. If we cannot reach agreement, the UK will go it alone with a digital services tax of its own.’
Mr Hammond acknowledged that many voters feel ‘left behind’ by economic change and fear they will fall further behind as new technologies like artificial intelligence and driverless cars make their jobs obsolete.
He warned that the Tories must persuade these people that the market system can work for them, or see them fall for the ‘seductive simplici- ties’ offered by Jeremy Corbyn’s Labour. The Chancellor said the Tories must look beyond Brexit to convince millennials and those in later generations that ‘21st century capitalism’ can provide answers to the problems they face.
The party needs to ‘dare to change’ and ‘renew the mandate for the market economy in the 21st century and with it the mandate of the modern
‘The stalling has to stop’
Conservative Party to govern’, he said. The Government must show voters that gains from technological advance will not go only to ‘the few’ but will be harnessed to ‘address their concerns, not make them worse’, he said.
And he warned Tory activists: ‘If we look for a moment like the party of “no change”, then we should not be surprised that some will be tempted by the dangerous populism of our opponents.’ Denouncing the Labour of Mr Corbyn and John McDonnell as a ‘backward-looking party’ which is ‘totally unfit to govern’, he said: ‘This country now faces a choice.
A choice between the seductive simplicity of the Brave New World of Corbyn and McDonnell’s populism, where the narrative is all about easy answers, and our pragmatism, which is sceptical of ideologues, which starts with the real world we live in, and seeks to make it better, and recognises that there are no short-cuts and no free lunches on the road to a better Britain.’
Campaigners have long complained about how shops are being crippled with rising bills, while online firms such as Amazon pay lower rates on its out-of-town warehouses. Earlier this year, it emerged that Amazon’s main UK subsidiary paid just £1.7million of tax on profits of more than £72million last year.