Cameron's tax scrutiny will hurt recovery, big firms say
Executives say the PM's pledge to get 'cowboy firms' to pay more tax will hurt economic recovery
DAVID CAMERON'S outspoken attack on "cowboy firms" who avoid paying tax has angered business leaders who warn that any attempt to make them disclose more details of their tax affairs may undermine the economic recovery.
Speaking at the World Economic Forum in Davos yesterday, the PM said companies had a "moral duty" to pay tax and those who deliberately avoided paying their fair share needed to "wake up and smell the coffee".
The comment was interpreted as a deliberate "swipe" at Starbucks, says The Guardian. The coffee chain, which has 700 outlets in the UK, said recently it would pay about £20 million in tax in the 2013/2014 financial year after facing strong criticism over its tax arrangements.
Cameron also told the Davos meeting that Britain would use its presidency of the G8 group of leading nations to push for an "international crackdown" on aggressive tax avoidance.
The PM's stance was applauded by tax campaigners, though they want "more details" on how he intends to get companies to pay up, says the Daily Mirror. The general secretary of the TUC, Frances O'Grady told the paper that "getting to grips [with tax avoiders] at a global level will not work unless the government takes tougher action closer to home".
The Daily Telegraph reports that the heads of more than 30 FTSE-100 companies have said they are strongly opposed to being forced to disclose more details of their tax arrangements.
Their views, which were canvassed in a letter written to chief executives by the Conservative MP Stephen McPartland, suggest that any move to introduce "more red tape" in relation to tax will make British companies less competitive and undermine the economic recovery.
Ian Livingston, chief executive of BT, responded that "any money spent on reporting is money that could be spent on investment and it's investment that's the top priority at present."
Justin King, chief executive of Sainsbury's, said government measures are unnecessary – it just needs people to "boycott" companies that don't pay their fair share of tax, the Telegraph reports. He said the impact of consumers spending their money elsewhere would be the "quickest and most powerful way" to force companies to pay a proper amount of tax.
Cameron insists he won't be dissuaded from taking action, telling business leaders at Davos: "I'm a low-tax Conservative, but I'm not a companies-should-pay-no-tax Conservative. Individuals and businesses must pay their fair share."