UK to tax cheats: 'Wake up and smell the coffee'

January 24, 2013: 7:20 AM ET
david cameron davos wef
Davos, Switzerland (CNNMoney)

British Prime Minister David Cameron called Thursday for a global effort to clamp down on tax avoidance by businesses and more urgent efforts to stimulate global trade.

Setting out his agenda for the U.K.'s chairmanship of the G8 group of leading industrial nations this year, Cameron said he was looking for progress on tax and trade and greater disclosure by companies and governments to help boost growth.

"We want to use the G8 to drive a more serious debate about tax evasion and tax avoidance," he said.

Related: We must focus on trade, taxes, transparency

Cameron said there were many legitimate ways for individuals and companies to minimize their tax burden, but some businesses had gone way too far to avoid paying their fare share at a cost to the wider economy and other companies.

"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 ever-more 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," he said in a swipe at Starbucks, which last month caved in to pressure to pay more U.K. tax.

Starbucks (SBUX) was responding to a public outcry from voters and local businesses over its tax practices. Google (GOOG) and Amazon were also heavily criticized, prompting the British government to step up efforts to close loopholes for big companies.

Related: 11 EU states to introduce tax on stock trades

But the British prime minister made clear that a tougher line on tax needed international coordination.

"Clamp down in one country and the traveling caravan of lawyers, accountants and financial gurus just moves on elsewhere," he said.

"This is about me and all the other G8 leaders being able to look our people in the eye and say that when they work hard and pay their fair share of taxes, we will make sure that others do as well."

Industry leaders and experts surveyed by the World Economic Forum rated wealth gaps as one of the top risks for the global economy.

'Dr. Doom's' risks for the global economy

Cameron will also push for the world's biggest economies to promote international trade, which has still not recovered to pre-financial crisis levels.

A trade deal between the EU and the U.S. could add over $80 billion to the EU economy alone, and completing all the trade deals currently under discussion could increase EU GDP by 2%, creating over two million jobs.

The speech came a day after Cameron promised the British people a vote on EU membership if he wins the next general election in 2015.

He said the referendum was about making a case for a more competitive, open and flexible Europe and securing the U.K.'s place within it.

"When you have a single currency you move inexorably towards a banking union and fiscal union and that has huge implications for countries like the UK who are not in the Euro and are never likely to join."

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