Head of Goldman Sachs warns David Cameron on tax

 

The head of Goldman Sachs has cautioned politicians against subjecting companies to public opprobrium for responding to incentives in the tax system.

Prime Minister David Cameron spoke out yesterday against some forms of "aggressive" tax avoidance and said he would use Britain's presidency of the G8 to ensure that individuals and businesses "pay their fair share" and to push for greater global transparency about the ownership of companies and the movement of assets.

In an apparent swipe at cafe chain Starbucks, whose failure to pay corporation tax in the UK over three years sparked widespread outrage, Mr Cameron said that it was time for businesses to "wake up and smell the coffee" about public anger at tax-avoidance practices, which in some cases raised ethical issues.

But chief executives at more than 30 of Britain's biggest companies have warned against publishing more details of their tax affairs, according to the Daily Telegraph.

And Goldman Sachs chief executive Lloyd Blankfein said that holding people up for criticism for their tax arrangements risked "criminalising every right-thinking person who organises his or her affairs in a sensible way".

Goldman Sachs came under fire earlier this month for considering deferring bonus payments to allow staff to benefit from the forthcoming cut in the top rate of income tax from 50p to 45p. The bank decided later not to go ahead with the scheme.

Mr Blankfein told BBC Radio 4's Today programme: "If all of a sudden, in addition to the rules that generate certainty for people, the signposts become so amorphous and so loose and so subject to second-guessing, you're making everything uncertain and it's very hard to organise your affairs in a sensible way.

"I'm not saying that you are exculpated from any pressure merely because you meet the rule of law - we've never said that, we don't live that life.

"But I would say 'Are you going to hold people up to public opprobrium because a house they could have sold in January instead they sell in May because there was a profit to be made on that house because the selling price was higher than the purchase price?'.

"If you do that, you are going to criminalise every right-thinking person who organises his or her affairs in a sensible way."

Explaining Goldman's decision not to go ahead with the bonus deferral plan, Mr Blankfein said: "We are a public entity, we live on the goodwill of the public, and so we adapted to what we perceived as criticism. We stand by our original idea and we stand by the revision of our plans."

Announcing his plans for the G8 to "drive a more serious debate on tax evasion and avoidance", Mr Cameron told the World Economic Forum in Davos, Switzerland, yesterday: "This is an issue whose time has come. After years of abuse, people across the planet are calling for more action and, most importantly, there is gathering political will to actually do something about it.

"There's nothing wrong with sensible tax planning, and there are some things governments want people to do that reduce tax bills, such as investing in pensions, start-up businesses or charities.

"But some forms of avoidance have become so aggressive that I think it is right to say these raise ethical issues and it's time to call for more responsibility and for governments to act accordingly."

But the Daily Telegraph reported that more than half - 32 out of 52 - of FTSE 100 bosses who responded to a survey by Conservative MP Stephen McPartland raised concerns about the issue.

Andrew Bonfield, finance director of National Grid and chairman of the tax committee of the Hundred Group, which represents finance directors in the FTSE 100, told the paper: "Transparency standards need to be developed, applied and enforced on a global basis to avoid the risk of regulatory arbitrage which will almost certainly disadvantage UK and EU companies."

And Deirdre Mahlan, chief financial officer of drinks company Diageo, warned that an international standard would "not only be hugely burdensome, but also potentially misleading" while Douglas Hurt, finance director of engineering firm IMI, feared innocent firms would be punished because of "the alleged abuses by a few", according to the Daily Telegraph.

PA

Start your day with The Independent, sign up for daily news emails
News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Recruitment Genius: General Factory Operatives

£18000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links