Cameron Says U.K. Efforts Put Tax Debate on Global Agenda

U.K. Prime Minister David Cameron said his government’s agenda for next week’s Group of Eight summit has prodded companies to review what he called “aggressive tax-avoidance strategies.”

Cameron, who will host the meeting in Northern Ireland June 17 and 18, said in an interview in his London office late yesterday that he decided to put tax up for discussion to get governments to talk about how to ensure companies pay their fair share.

“There is something of a moment taking place when this issue that for years was at the margins of debate is much closer to the center of debate,” Cameron said. “The British government has helped to put it there. It’s good that this is something now being discussed, I suspect, in every boardroom in the world.”

A panel of U.K. lawmakers attacked Google Inc. (GOOG)’s “highly contrived” tax arrangements in a report published in London yesterday. Apple Inc. (AAPL), Amazon.com Inc. (AMZN), and Starbucks Corp. (SBUX) have all also come under scrutiny in recent months. Asked about those companies, the prime minister said “aggressive tax avoidance” raises “moral issues.”

As he prepares to host his fellow leaders, the prime minister will today announce a competition to solve a major challenge facing the world. In an echo of the 1714 Longitude Prize, which was offered to anyone who could find a way of accurately measuring ships’ locations, the government has put up 1 million pounds ($1.6 million) for anyone who can find a solution to a conundrum of similar magnitude, to be decided on by a committee.

Zero-Carbon Flights

“It could be finding a cure for Alzheimer’s or diabetes,” Cameron said. “It could be designing zero-carbon flights to New York. This is part of the science innovation creativity agenda that we want to put at the heart of the G-8.”

The prime minister said he sees the Internet as “a massive driver of economic and social change” that along with “fantastic goods” has brought “some bads.” These, he said, include Internet pornography and tax avoidance.

“Business has gone more and more global, and more and more online, and yet tax systems are still very national and rather offline,” Cameron said.

Parliament’s Public Accounts Committee criticized Google for paying $16 million in U.K. corporation tax between 2006 and 2011 on $18 billion of revenue. The company replied that it abides by tax rules, which it said are made by politicians.

‘Negotiating Heft’

Cameron also said being a member of the European Union gives the U.K. negotiating power as the bloc tries to reach a transatlantic trade deal with the U.S.

Even so, speaking in front of a portrait of his 1980s Tory predecessor as prime minister, Margaret Thatcher, he acknowledged that there would be aspects of making a trade deal that would be easier if, as some of his Tory lawmakers want, he took Britain out of the EU.

“It would be easier in one sense, in that we don’t share some of the concerns of some of the countries in Europe,” the prime minister said. “But it would be more difficult in another sense, in that being part of a single market, the largest in the world, we have considerable negotiating heft. You can argue that whichever way you want to.”

He expressed confidence that talks would get under way after the summit. “There’s enough goodwill on both sides to realize this is the moment to push ahead,” he said.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net; Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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