Kemi Badenoch
Main Page: Kemi Badenoch (Conservative - North West Essex)Department Debates - View all Kemi Badenoch's debates with the HM Treasury
(6 years, 8 months ago)
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Mrs Kemi Badenoch (Saffron Walden) (Con)
What a pleasure it is to serve under your chairmanship, Dame Cheryl.
When I heard that there was to be a debate on digital taxation I was really excited, because digital and tax are two of my favourite subjects. I am sure that hon. Members know that I classify myself as a low-tax Tory, but not many people will know that my career to date has been in digital. I congratulate my hon. Friend the Member for Harborough (Neil O'Brien) on securing the debate and wholeheartedly support his comments and suggestions. I shall focus on user-generated content, an important matter that he spoke about.
Many hon. Members have spoken today about property taxes, business rates and the losses that smaller companies have had to endure in competing with large digital companies. Inevitably, the wider discussion when we talk about large tech companies is about tax avoidance and tax evasion. Tax has various purposes, and one is to deal with the negative side-effects of those activities. The Financial Secretary will be familiar with Pigouvian taxes, which are designed specifically to tackle those negative externalities. That is what I propose today.
The main externality for my constituency is to do with crime and policing. Cyber-crime has grown exponentially, and user-generated content is a significant part of that. There are crimes we never saw previously—the creation, sharing and distribution of indecent images, especially of children; harassment on social media; cyber-bullying and other activities designed to cause distress and anxiety; and, of course, online activities related to terrorism, hate crime and all sorts of incitement. All those activities take place on large digital platforms, but it is claimed that the content is not theirs but belongs to the user. How are we going to deal with that? This issue has taken up a significant proportion of the time and priorities of Essex police. The police and crime commissioner and the chief constable have reiterated that dealing with cyber-crime is their No. 1 priority, and a lot of police time is redirected to that area. Who has suffered? The people with whom many of these large digital businesses are competing.
Local businesses in my high street have suffered an unprecedented spate of burglaries. I will not get into arguments about cuts in police numbers or whatever, because I do not think it is about that. This is about the police having to do so much more than they ever did before. Many of the crimes that I have listed did not exist 20 or 30 years ago. This is not just a matter for the Home Office; it is one for the Treasury.
The principle of a Pigouvian tax is a financial matter and has been established in many other areas. For example, the British Transport police are funded by subscriptions paid for by train companies, and local businesses in certain towns invest in business improvement districts that fund police officers. Pubs and clubs have to pay licence fees that contribute to the policing of the negative externalities that come from their activities. Recently, I have seen beauty parlours have to get a licence because they have been used as a cover for money laundering and other illegal working. We should consider taxing this new area. I do not like to propose new taxes, but the cost of these activities is being borne by citizens and businesses across the country, and it is those who make the most money from them who should be paying.
A double dividend comes from these sorts of taxes—we can see the cost of the crimes and direct money to the areas most affected. It is not good enough for companies to say that the issue has nothing to do with them, or not to appreciate the social cost of their activities. My remarks have been brief, but my question to the Minister is this: given the many externalities from online businesses, and particularly from user-generated content, should the large digital companies that create and run those platforms pay a significant amount of the cost?