Tax cut for Musk, Bezos and other tech billionaires on the table, Starmer confirms

PM says digital services tax and Online Safety Act formed part of talks with White House over deal to avert tariffs

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Britain has put the tech tax and online safety laws on the table in talks with the US about a deal to dodge Donald Trump’s tariffs, Sir Keir Starmer has confirmed.

The Prime Minister promised he would continue to protect children online but suggested he was open to changing the existing rules in order to reach an agreement with Washington.

The White House is opposed to the UK’s digital services tax which is levied on large tech firms such as Mark Zuckerberg’s Meta, Jeff Bezos’s Amazon, and X, owned by Trump ally Elon Musk.

US Vice President JD Vance, has accused Britain of stifling free speech with the Online Safety Act which creates a legal duty for social media firms to enforce their terms of service.

From left, Meta’s Mark Zuckerberg; Lauren Sánchez and her fiancé, Amazon’s Jeff Bezos; Google’s Sundar Pichai; and X owner Elon Musk, at Donald Trump’s inauguration in Washington DC (Photo: Julia Demaree Nikhinson/Getty)

Asked by MPs on the Commons Liaison Committee whether the measures were part of his negotiations with the US, Starmer replied: “In relation to trade talks, obviously there are questions about the appropriate way to tax digital services, etc. There are questions about how technology impacts free speech.

“I’ve been very clear in my view that we need to have arrangements for a digital tax of some sort, and equally we need to be pioneers of free speech which we have been for very many years in this country.

“But at the same time, we rightly protect under the Online Safety Act – further provisions of which are coming into force pretty quickly – and when it comes to paedophiles and protecting children, I take a pretty strong line that we take the necessary measures in order to do so.”

Neither the digital services tax nor the Online Safety Act is expected to be revoked entirely, but the Government has considered changing the way they work so that their impact on tech firms is softened.

Starmer ruled out selling access to the NHS to American firms as part of the deal, telling the committee: “I have been very protective of the approach we take to the NHS in any dealings with any other country because it is our greatest asset, and we are not trading it away. That is the approach that I take here.”

A Labour MP with knowledge of No 10’s thinking on how to offer tech concessions to appease Trump on tariffs said “I think the PLP is going to be shocked” when they realise how the Government plans to water down the enforcement of the Online Safety Act.

The MP said that commitment to protect the existing Act is an “easy red line to meet” as the legislation is effectively a “statement of principles” that outsources the duty of care to Ofcom, and that this can be tinkered with.

Rachel Reeves confirmed that talks with the US involved a range of existing barriers to trade which could be removed or weakened as a quid pro quo for cutting tariffs.

She told the House of Commons: “We are discussing a range of different areas, but the focus is on reducing tariff and non-tariff barriers to trade, with a particular focus on those sectors that are subject to the higher tariffs.”

Cars and steel have been singled out by Trump for higher levies than other parts of the economy, raising fears about their future in the UK.

At a meeting of the Government’s steel council on Tuesday, industry minister Sarah Jones promised to “stand up for UK steelmaking” with financial support. The state is expected to step in to save British Steel’s site in Scunthorpe as soon as this week, with full nationalisation one of the options.

Talks with the US on a closer economic partnership began when Starmer visited Trump at the White House in February, but were not completed in time for the President’s “liberation day” last week, when he slapped tariffs of at least 10 per cent on nearly all America’s trading partners, with some nations and blocs hit with much higher rates.

The Prime Minister told MPs: “Obviously we have to keep our options on the table and do the preparatory work for retaliation if necessary. But I think that trying to negotiate an arrangement which mitigates the tariffs is better.”