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Dodds: Disparity between how online firms and others are taxed must be addressed

Shaun Connolly, PA Political Correspondent
·2-min read

Labour has demanded an urgent review into how online firms are taxed and treated differently from traditional businesses.

Shadow chancellor Anneliese Dodds also said that Britain needs a “rebalancing” in the workplace as she called for greater scrutiny over the way governments spend money.

Ms Dodds insisted Labour would allow independent financial watchdogs to make an annual assessment on its spending record in power.

The shadow chancellor said that without major fiscal and workplace reforms, the aftermath of the Covid pandemic would “lead to permanent yet avoidable economic scarring”.

Ms Dodds expressed concern over how newer tech firms get a better deal than “bricks and mortar” companies.

She said: “We need a rebalancing of power in the workplace, such that employees have a more concrete set of rights and a greater sense of control.

“And it also means a rebalancing of power between companies.

“It cannot be right that traditional bricks and mortar businesses are treated so differently from their online rivals, including the way in which they are taxed.

“That disparity must be urgently addressed.”

The comments on tech companies came as Prime Minister Boris Johnson called for a “real debate” about the role and status of social media outlets and whether they should be treated as platforms or as publishers.

Ms Dodds, who is the first woman to deliver the prestigious annual Mais lecture to the Business School at City University, London, used the occasion to insist taxpayers could trust a Labour government with their money.

The shadow chancellor said that under a stringent new regime the National Audit Office (NAO) would annually assess how well the Government is spending money.

Recommendations made by the independent body would then have to implemented by the Treasury.

Ms Dodds said: “As chancellor, I would invite the Comptroller and Auditor General to submit an annual report to Parliament, bringing together the NAO’s findings throughout the year into a single assessment of the effectiveness of public spending in those areas the NAO has examined.

“I would commit to Government responding to that report – and indeed all NAO recommendations – with clear, tangible commitments to improve the quality of public spend.”

She added: “This approach – hard-wiring value for money and financial control into the budgetary process – would focus on real outcomes, not eye-catching announcements designed to raise expectations today, only for them to be dashed tomorrow.”

The Tories insisted that Labour’s track record in government showed it could not be trusted with public money.

Conservative Party co-chairman Amanda Milling said: “We’ll take no lessons from Labour on the nation’s finances.

“Labour opposed every tough decision successive Conservative governments took to get our finances back in shape – decisions which meant we were able to respond to the pandemic with an unprecedented £280 billion package of support to protect jobs, livelihoods and public services.”