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Google tax blasted by Ed Miliband as Schmidt slips

Ed Miliband blasted Google over tax avoidance at the Big Tent event today, while Google boss Eric Schmidt made an embarrassing slip.

Google's tax situation is "wrong", says Ed Miliband. In perhaps the most high-profile attack on Google yet, the Leader of Her Majesty's Most Loyal Opposition blasted the Big G at its own event -- while Google boss Eric Schmidt dropped a clanging Freudian slip when he described Google as "a capitalist country".

Speaking at Google's Big Tent event today, Googlechief Schmidt quickly corrected himself to "capitalist company", as he defended the search giant's controversial tax avoidance practices, the Guardian reports. Schmidt maintains Google is beholden to the letter of the law when it comes to tax -- but Miliband had already dismissed that argument.

"When Eric Schmidt says Google's current approach to tax is just capitalism, I disagree," he said. "And when Google goes to great lengths to avoid paying tax, I say it's wrong."

Google has come under fire recently for claiming to be based in Ireland while doing business in Britain, allowing the company to earn money in the UK without paying higher UK taxes.

"I can't defend an irrational structure" 

Schmidt was conspicuously absent from the event during Miliband's scathing speech, in which the Labour leader compared irresponsible companies to The Simpsons' money-grabbing capitalist rotter Montgomery Burns. But Schmidt fought back later in the day, insisting that Google operates within the letter of the law.

Schmidt did concede things could change, admitting, "I can't defend the international tax regime. Both your government and mine say it needs to be changed.

"I can't defend an irrational structure -- a computer engineer would not have designed this."

Schmidt assured the crowd that Google would not abandon Britain if taxation laws were to become less favourable. "Google will continue to invest in the UK no matter what you guys do. We love you guys too much. We will continue investing in the UK no matter what."

Who's right? Is Google right to use its resources to outmanoeuvre the tax system, or does every company have a responsibility to the country in which it plies its trade? Tell me your thoughts in the comments or on our fully compliant Facebook wall.