Chuka Umunna is showing a level of ignorance about business which is quite extraordinary. I'm not too surprised that the UKUncut gang don't understand the way that business and taxation works but Chuka Umunna is an MP, PPS to the Leader of the Opposition and member of the Treasury Select Committee.
Chuka has got himself some headlines by attacking Barclays Bank for only paying £113 million of Corporation Tax in 2009 against global profits in 2009 of £11.6 billion. I think that the Treasury Select Committee should send Chuka off on a basic, and I mean very basic, course on business finance. Even the most cursory understanding of business shows what a gaping hole there is in his attack.
Corporation Tax is paid a year in arrears, meaning the money paid out in 2009 was for the 2008 business year so comparing last year's tax liability with this year's profits is meaningless. And the £11.6 billion (which is more accurately £6.1 billion) is the global profits for the company, so once again it is stupid to compare UK tax with world-wide profits. Taxes are paid in the jurisdictions where the profits are made and looking at their total worldwide tax it seems that in 2009 Barclays paid tax on profits at a rate of about 23%, quite a bit more than the 1% claimed by Chuka.
Don't get me wrong, the banking sector does need reform but in order to make this happen politicians need to be able to speak with credibility to the banking sector. Chuka's ill informed and childish attacks diminish that credibility and make it harder for real reform to happen.
When Chuka, with all the pomposity of the Grand High Poobah himself, tweeted that he was "In New York today meeting the world's biggest banks. Yes...I shall be talking truth to financial power." did he realise that he was actually talking a load of crap and those big banks were all laughing at him?
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