Davos 2016: George Osborne says Google tax deal is a 'major success' - as it happended

Graeme Wearden in Davos

from on 2016-01-23 14:05 (#11K8Y)

Rolling coverage of the final day of the World Economic Forum in Davos

2.05pm GMT

Let's end on a heartwarming tale from Davos.

One of the most impressive delegates this year was Mark Pollock, the first blind man to race to the South Pole who was later paralysed.

My @Davos moment? A guy walking 3 miles thru the snow to open his workshop on a Saturday and fix a wheelchair.

2.02pm GMT

Delegates are streaming away from the WEF conference all, with a lot to think about.

Philip Jennings, head of the UNI Global Union, says this Davos was about "Beauty and the Beast".

We started the with Oxfam saying that 62 people are as wealthy as the poorest half of the world, prompting warning about inequality and distribution.

We ended it with JP Morgan's Jamie Dimon putting two fingers up to the world, and taking a 30% pay rise.

1.57pm GMT

It's been a funny old Davos this year. The wild swings in the stock markets reminded us that the global economy remains fragile, dominated by emerging market woes and fears of a new global slowdown.

But that was trumped by the awful news that at least 45 people drowned yesterday fleeing the Middle East for Europe. The worst January on record for refugee deaths could herald a grim 2016.

1.43pm GMT

Davos is nearly over - and delegates are tucking into lunch. It's quite a menu - including deer, veal ragout, soup, a *huge* swiss cheese , and pancakes (or Cripe Suzette for posher readers).

There's also a rather large chocolate fountain...

1.28pm GMT

We know that George Osborne is a big China fan. And he concluded the session on the Global Economic Outlook by urging global leaders to support Beijing.

"The world has not been very good over previous centuries at accommodating rising powers," the chancellor warned.

"It is massively in our interests that we bring China into the multilateral institutions of the world.....and make it feel part of the global system."<end>

12.36pm GMT

Bank of Japan governor Kuroda's suggestion today that China should impose capital controls highlights the pressure on Beijing.

Chris Giles of the FT explains:

The subject of capital controls is very sensitive for the IMF because late last year it recommended the renminbi be admitted into the fund's elite basket of currencies, including the US dollar, euro, yen and sterling, on the grounds that it was now "widely used" and "freely usable". Capital controls would undermine both conditions.

Kuroda calls for China to impose tighter capital controls: https://t.co/6mqL8O3and #FT

12.25pm GMT

George Osborne's comments won't spare Google from a grilling in parliament over the tax deal.

There is plenty of concern that 130m in back taxes is a rather meagre sum, for a company of Google's size and importance.

"HMRC now needs to assure taxpayers that it will keep up the pressure to tackle whatever the next emerging issue is in real time, rather than years later.

"It is effectively admitting it pulled in too little tax from Google for nine out of ten years.

11.00am GMT

George Osborne has told the Guardian that the 130m tax deal announced with Google overnight is a "huge step forward"

Speaking to my colleagues Larry and Jill just after his panel debate in Davos, the chancellor said he regarded it as a major success for the government.

This is a major success of our tax policy.

We've got Google to pay taxes and I think that is a huge step forward and addresses that perfectly legitimate public anger that large corporations have not been paying tax. I think it's a really positive step.

People will be "sceptical" about what he said looked like a "sweetheart deal", he told BBC Radio 4's Today programme on Saturday, adding that HMRC seemed to have settled for a "relatively trivial amount of money."

McDonnell will be asking HMRC to publish full details of what it believed Google owed. He said he would raise the issue in Parliament next week as the issue needed "wider scrutiny".

10.48am GMT

The session ended with Christine Lagarde calling for a new way of measuring economic success:

.@Lagarde take away #WEF16 : need to go back to how we measure things like GDP, value, productivity and the many things we don't measure.

10.44am GMT

Tidjane Thiam, head of Credit Suisse, reckons we are not on the brink of another banking crisis despite the recent market turmoil.

Credit Suisse Thiam: "There is no worry, no contagion risk about banks" #Davos "The system can withstand it".

10.38am GMT

Q: Does Christine Lagarde think China needs capital controls?

Lagarde replies that it wouldn't be a particularly good idea for Beijing to burn through all its reserves propping up the yuan.

10.32am GMT

Onto China, which has been eating into its foreign exchange reserves in an attempt to support the yuan.

Kuroda says that Beijing faces a tough battle, and may need consider new restrictions to prevent money leaving the country.

My personal view, which may not be shared by the Chinese authorities is that in this somewhat contradictory situation, capital controls could be useful to manage the exchange rate as well as domestic monetary policy in a consistent and appropriate way.

10.22am GMT

Japanese central bank governor Kuroda says that inflation, currently around zero, could strengthen significantly if the oil price recovers.

And if not, he's prepared to do more. Echoing the famous pledge from ECB chief Mario Draghi, Kuroda says:

The Bank of Japan is fully committed to achieving the price stability target of 2% and will do whatever it takes to achieve that target, at the earliest stage.

BoJ's Kuroda: Underlying inflation in #Japan has been positive. There is no limitation on BoJ policy tools. #wef16 pic.twitter.com/dsnBFviyHe

10.20am GMT

Japan's central bank chief, Haruhiko Kuroda, says he doesn't believe China's economy will crash.

Markets have been volatile this year, against heightened uncertainty over China's economy and oil prices, he says. But he does not share the pessimistic view about the implications.

Japan's Kuroda: "I do not share the pessimistic view of the global economy" #davos

10.15am GMT

India's cooperative federalism has transformed into competitive federalism and that's good news for India: Arun Jaitley #wef

10.13am GMT

Q: Will Britain be in the EU in a year?

Osborne says he is optimistic of getting a good deal for Britain and the European Union.

I don't want my continent priced out of the world economy.

10.11am GMT

Osborne says that Europe likes to cut a deal at the 11th hour, because the Greek banks need to open or a bond needs paying.

But we aren't behaving like the greek government. We have taken a much more measured approach, approaching Europe as friends, colleagues and allies.

Osborne tells #Davos UK is approaching EU as "friends, colleagues and allies"....

"This is not special pleading for Britain" Osborne tells #Davos over EU talks. "i'm optimistic we're going to get a good deal..."

10.07am GMT

Q: Is there any chance of a deal in the next few weeks that will satisfy the huge eurosceptical forces in the UK?

There will be people who want to leave Europe, come what may, and some who want to stay, George Osborne replies.

10.04am GMT

Britain has three priorities through our EU renegotiation, says Osborne:

We want to create a more competitive European union, to create more jobs and growth

Mainstream governments should not ignore these pressure, but should address the legitimate concerns that can fuel them.

10.00am GMT

Now George Osborne speaks, saying his 'clear economic plan' has given the UK a pretty secure footing going forwards.

But we don't duck big decisions - the Scottish referendum, for example, has "checked a move towards the break-up" of the UK.

9.57am GMT

On Europe, Lagarde says the economy is in better shape than a year ago,.

But the IMF has two big concerns:

We hope very much [there is a deal], as it would really be conducive to more stability and a more cohesive economic zone.

#WEF16 Lagarde says possibility of Brexit is one of IMF's "two big concerns", other being refugee crisis pic.twitter.com/BrOklcb5F1

9.50am GMT

Lagarde says there are four key risks:

9.46am GMT

Christine Lagarde says the IMF believes the world economy will grow at a faster rate, even though it cut its growth forecasts this week.

From 3.1% in 2015, the IMF expects growth of 3.4% in 2016 and 3.6% in 2017.

9.44am GMT

Credit Suisse CEO Tidjane Thiam says the financial markets have had their worst start to a year ever.

Fears over China's economy are a prime factor, prompting market turmoil and concerns that we could be heading into a global recession.

9.40am GMT

The FT's Martin Wolf is chairing the debate, and spending several minutes running through the state of play today.

And it's not great - world stock markets are in turmoil, everyone's worrying about China, emerging economies face a tough year, the US economy may be slowing too, the migration crisis is threatening European Union, populism is on the rise, and Britain may be heading towards Brexit.

9.36am GMT

Reminder, the panel are UK chancellor George Osborne, Japanese central bank governor Haruhiko Kuroda, IMF managing director Christine Lagarde, Indian finance minister Arun Jaitley, and Credit Suisse CEO Tidjane Thiam.

9.34am GMT

Cowbells are ringing across the Davos conference centre (yes, really), signalling that the debate on the Global Economy is starting now.

9.30am GMT

This year, the Guardian's Davos bureau is a prime table at the heart of WEF, just outside the office of founder Klaus Schwab.

And from there, we've seen a string of senior politicians and top central bankers emerge from a meeting. That includes the IMF's Christine Lagarde, Bank of England governor Mark Carney, Finland's finance minister Alex Stubb, and Axel Weber of UBS.

Excellent breakfast nearly 30 finance ministers & central bank governors. Dynamic statement #4IR by @alexstubb @wef pic.twitter.com/BM4c2KOwHu

Excellent working breakfast with colleagues. Focus om 4th Industrial Revolution. Now session on finance. #Davos2016 #IGWEL

9.20am GMT

Gideon Rachman, the Financial Times's top foreign affairs writer, reckons that this year's World Economic Forum has been dogged by the "shadow of populism":

Davos delegates shouldn't be surprised that the public are looking at the state of the world economy, and the political landscape, and decide that a change is needed.

The shadow of Donald Trump has loomed over Davos this year. So has the prospect that refugee flows into Europe will undermine centrist leaders such as Angela Merkel, the German chancellor. More broadly, those at Davos are aware that they increasingly represent the "unpopular" - the business and political elites that are the targets of public anger and disillusionment.

Sooner or later, most corridor conversations in Davos have turned to the US presidential election. It is gradually dawning on people in the Swiss resort that either Mr Trump or Ted Cruz, the Texas senator, will probably win the Republican nomination, and that the "unthinkable" - a Trump or Cruz victory in November's presidential election - could happen.

My latest, from Davos: Shadow of populism hangs over Davos - https://t.co/iC334WLtiQ https://t.co/0sOvOV9jZY via @FT

9.07am GMT

Our economics editor Larry Elliott has been coming to Davos for two decades. And he writes that this year's meeting has been particulary dominated downbeat.

For Justin Welby, mulling over the state of the world in Davos has been easier than the previous week spent trying to hammer out an Anglican church compromise over gay marriage. The Archbishop of Canterbury even cracked one of the better jokes at the World Economic Forum.

Asked whether god is in cyberspace, Welby replied: "I think he must be because every time I am on the underground or a bus I see people looking at their computer or mobile phone saying 'oh god, why won't this work'."

9.01am GMT

So, what have we learned from Davos this year?

In a nutshell, the so-called 'global elite' are worried about a range of problems, and struggling to make much progress in solving them.

8.45am GMT

Some delegates might be heading for the ski slopes but there still signs of work being done. It's all go in the main Congress centre this morning.

We've spotted Bank of England governor Mark Carney, Canada's Prime Minister Justin Trudeau, Tidjane Thiam, chief executive of Credit Suisse and WPP's Sir Martin Sorrell coming from one direction.

8.43am GMT

A drugs scandal has hit Davos this year, in a serious embarrassment for the Swiss authorities.

It's not the delegates who have been puffing and snorting, though, but a dozen of the soldiers who patrol the ski resorts roads. They've been sent home, and may face criminal charges.

Twelve on-duty soldiers had tested positive on Tuesday for cannabis and five of them had also used cocaine, army spokesman Stefan Hofer told the ATS news agency.

The twelve, among some 4,500 soldiers brought in to ensure security at the World Economic Forum this week, had been tested after others in their unit raised the alarm.

8.30am GMT

Guten Morgen.

Just like the wicked, there's no rest for the world's global elite. So world leaders, CEOs, union chiefs, economists and journalists are gathering for the final act of the 2016 World Economic Forum.

Good Morning from Davos. On day4 of #WEF16 future of growth & global econ outlook will debated. Japan center stage. pic.twitter.com/kVaOs6YIM5

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