By Chris Hegarty

IS the Google deal good enough? It’s a question that has generated much heat, but little light, since Chancellor George Osborne announced that the world’s second most valuable company would pay the UK £130 million in back taxes covering the past 10 years.

It was a vindication and a major success according to Mr Osborne; not so, say critical voices ranging from former Business Secretary Vince Cable and the Scottish Greens’ Patrick Harvie through to media mogul Rupert Murdoch. The SNP and Labour have asked the European Commission to investigate the settlement.

Such mixed views are perhaps not surprising, reflecting not only political point-scoring but also a lack of transparency. In the absence of public information about the basis of the deal, is it any wonder that we can’t agree on whether it’s good, bad or indifferent?

If transparency is one factor at the heart of this issue, the other is where the power lies. The UK is the world’s fifth largest economy, with a tax authority employing some 56,000 people yet it still struggles to face up to the sheer might of major multinationals. Google is worth more than £300 billion, is a global brand, has created many well-paid jobs in the UK and is not to be challenged lightly.

Imagine, then, where the balance of power lies in negotiations between major multinationals and some of the world’s poorest countries. Typically, such nations are desperate for investment and jobs, with only a tiny fraction of the UK’s economic clout or capacity to negotiate a fair deal and scrutinise multinationals’ tax practices.

Christian Aid has estimated that developing countries lose more than £100bn each year from tax dodging by multinationals. While exact figures are hard to pin down, the revenues lost to poorer countries appear vast: the OECD agrees with Christian Aid that most estimates "exceed by some distance the level of aid received by developing countries".

While recognising the significant impact that fair tax payments can make to public services in the UK, austerity means different things in different contexts. In Malawi, for example, where spending on healthcare is just £62 per person per year, there is only one doctor for every 50,000 people. Relatively modest increases in tax revenues can bring about enormous improvements to the lives of huge numbers of people. In other words, the impact of widespread corporate tax dodging in the world’s poorest countries is almost unfathomable.

For these reasons Christian Aid has campaigned for tax justice for the past eight years, advocating greater transparency in multinationals’ tax practices. Transparency is the cornerstone of tax justice, providing the information that will allow politicians, non-government organisations, journalists, investors and the general public to hold both companies and governments to account.

Recent years have seen steps in the right direction, both in new international regulation, and in terms of a cultural shift towards tax dodging being considered socially unacceptable. While concerted action at a global level remains crucial, more could be done closer to home too.

Here in Scotland some of Europe’s biggest institutional investors are among the largest shareholders in many global multinationals. They have a role to play in ensuring that the companies in which they invest pay fair taxes that reflect where economic activity actually takes place.

The Scottish Government, although not controlling corporation tax, can play its part. For example, Scotland’s public sector procurement guidance could encourage the awarding of contracts to companies with sound tax practices. The Scottish Business Pledge, a set of voluntary promises launched by the First Minister last year, could be expanded to include a commitment to pay fair taxes.

At Westminster, Christian Aid is calling for the immediate introduction of public country-by-country reporting, in which companies disclose taxes paid, profits made, staff employed and assets owned in each country in which they operate. This would immediately help to identify which companies are paying taxes that reflect where economic activity takes place, and those that are not.

The thirst for information about the Google deal reinforces the growing sense that present levels of secrecy – where deals are done behind closed doors between powerful companies and governments – are no longer acceptable. And any action taken to tackle this issue in the UK must also address the enormous impact of tax dodging further afield.

Chris Hegarty, Senior Adviser, Christian Aid.