David Cameron pledged to use Britain’s G8 presidency to clamp down on “cowboy” multinational firms that avoid paying UK corporation tax.
Speaking at the World Economic Forum in Davos, the Prime Minister addressed criticism that companies such as Starbucks and Google should pay more tax in the UK, telling the hundreds of top global chief executives and business leaders in the audience that they needed to “wake up and smell the coffee”.
Mr Cameron said: “Any businesses who think that they can carry on dodging that fair share or that they can keep on selling to the UK and setting up evermore complex tax arrangements abroad to squeeze their tax bill right down. Well, they need to wake up and smell the coffee because the public who buy from them have had enough.”
The Prime Minister told his audience at the Swiss ski resort that only co-operation between states would solve the problem of companies avoiding their “fair share” of tax. “Acting alone has its limits. Clamp down in one country and the travelling caravan of lawyers, accountants and financial gurus just moves on elsewhere. So we need to act together at the G8,” he said.
Mr Cameron said that multinational mining and energy firms, in collusion with corrupt governments, were helping to impoverish developing world nations by avoiding profits taxes. “Corrupt government officials in some countries and some corporations run rings around the letter and spirit of the law to rip off hard-working people and plunder their natural resources,” Mr Cameron said. “We can see the results: the government cronies get rich – some beyond their wildest dreams of avarice – while the people stay poor.”
Mr Cameron and the Chancellor George Osborne also met the Russian Prime Minister Dimitry Medvedev on the sidelines of the forum yesterday. They discussed the Syrian civil war, British energy interests in Russia and next year’s Winter Olympics in Sochi. Relations between the UK and Russia have been strained over the case of Andrei Lugovoi, who is accused of poisoning Alexander Litvinenko in London in 2006.