The government’s desire to appease Donald Trump ahead of the negotiation of a new Free Trade Agreement with the US will take money out of the pockets of key workers, Shadow Chancellor, Anneliese Dodds, has warned.
On Sunday 23 August, The Daily Mail reported that Chancellor Rishi Sunak would ditch The Digital Services Tax – worth £465 million-a-year to the UK public purse – to keep the American President sweet.
The levy, charged at a rate of 2% of sales, is applied to international tech giants with revenues of £25 million or more that operate “search engines, social media services and online marketplaces”.
The companies that fit this profile are overwhelmingly US-based, including Facebook, Google and Amazon.
A source told the Mail on Sunday the Chancellor considered the tax “more trouble than it is worth, given the anger of Trump and the Washington establishment,” who believe the US is unfairly targeted by the policy.
But Anneliese Dodds has warned Rishi Sunak that by giving Trump a tax break, he is taking money out of public services, where it could go towards paying for new key workers.
The £465 million that would be lost if the tax was withdrawn could cover the cost of employing 13,000 nurses, 8,700 teachers, or 8,600 police officers, she pointed out.
“This government promised to make tech giants pay a fair share of tax to support our public services,” she said.
“Scrapping the digital services tax will do the opposite … it’s another example of incompetence from a government that is holding back Britain’s recovery.”