World Economic Forum in Davos
David Cameron sets out the main priorities for the UK's
Presidency of the G8: trade, tax and transparency.
Itís the UKís privilege to host the G8 this year and I want to set
out today our main priorities. Now right up there on our agenda is
of course tackling the threat of extremism and terrorist violence
that weíve seen erupt in Mali and in that despicable attack in
Iíll put my cards on the table, I believe we are in the midst of a
long struggle against murderous terrorists and a poisonous ideology
that supports them. Just as weíve successfully put pressure on
al-Qaeda in Afghanistan and Pakistan, so al-Qaeda franchises have
been growing for years in Yemen, in Somalia and across parts of
North Africa, places that have suffered hideously through hostage
taking, terrorism and crime.
Now to defeat this menace weíve got to be tough, weíve got to be
intelligent and weíve got to be patient, and this is the argument
Iíll be making at the G8. Let me be again absolutely clear, there is
a place for a tough security approach including at times military
action where necessary. The French are right to act in Mali and I
backed that action, not just with words, but with logistical support
too. But we need to combine a tough security response with an
intelligent political response. We need to address that poisonous
narrative that the terrorists feed on. We need to close down the
ungoverned space in which they thrive and, yes, we need to deal with
the grievances that they use to garner support.
Now this means using everything at our disposal: our diplomatic
networks, our aid budgets, our political relations, our military and
security cooperation and yes, supporting - in those countries and
elsewhere - the building blocks of democracy, like the rule of law
and a free media. The Arab Spring remains part of the solution, not
part of the problem.
Now I want to open up a new debate too in how we share the burden of
meeting this threat. The G8 can help discuss how we can best divide
up some of this work between us and how we can each individually
partner-up with the countries worst affected to overcome this threat
and, like I say, this is going to be right up there on our agenda
for the G8.
But today I want to focus on our economic priorities, because for
all the countries in the G8 and all the countries across the
European Union there is a big, looming insistent question, and that
is how do we compete and succeed in the global economic race that we
are engaged in today.
How do we succeed when other nations are growing, changing,
innovating so fast? Now a lot of the answers are clear. Youíve got
to deal with your debts, youíve got to cut business taxes, youíve
got to tackle the bloat in welfare, and crucially youíve got to make
sure your schools and your universities are truly world class.
Now back in the UK weíve been doing all of these things. Less than
three years in and this government has cut the deficit by a quarter;
our corporation tax rate is the lowest in the G7. In welfare reform
weíve been radical, in education almost revolutionary - busting open
the state monopoly of education and allowing new Free Schools to
start up, and crucially to compete in this global race. We are
making sure that the United Kingdom is more outward looking than
Now yesterday I gave a speech setting out the UKís place in Europe.
This is not about turning our backs on Europe - quite the opposite.
This is about how we make the case for a more competitive, a more
open, a more flexible Europe and how we secure the UKís place within
it. This is how I see it. Just over half of the EU countries are in
the single currency, in the Euro. When you have a single currency
you move inexorably towards a banking union, towards forms of fiscal
union and that has huge implications for countries like the UK who
are not in the Euro and frankly [never will be] are never likely to
join. The club we belong to is changing. We canít ignore this:
change is underway and the debate about what this means, it is live,
it is happening right now.
And as I said yesterday consent in the United Kingdom for the steps
that have already been taken is wafer thin.
Now some just say well let these events unfold naturally. I say no.
We should try and shape them in the UKís national interest. Let us
negotiate a new settlement for Europe that works for the UK and
letís get fresh consent for it. And itís not just right for the
United Kingdom, it is necessary for Europe. Europe is being out
competed, out invested, out innovated and it is time we made the
European Union an engine for growth, not a source of cost for
business and complaint from our citizens.
So I want the UK to look out, not in, and that is why for the first
time in a decade UK foreign policy is on the advance. By 2015 we
will have opened up twenty new diplomatic posts around the world,
employed three hundred extra staff in the fastest growing regions of
the world. We are having to make cuts in the UK, but this is
something we are not cutting, weíre expanding. Weíre now one of only
three European countries to be represented in every single country
in ASEAN and we have the largest diplomatic network in India of any
developed nation. We are a global nation with global interests and a
global reach, and if you think all of this is somehow an unashamed
advert for the UK and UK business youíre absolutely right.
Everything I do is about making sure weíre not just competing in
that global race, but weíre succeeding in it.
But my argument today, the argument I want to make in front of you
and the idea that the G8 will be driving forward this year, is that
competing in the global race is not just about what we do at home,
it is about the wider economy weíll operate in, the rules that shape
it, the fairness and the openness that characterise it. We need more
free trade. We need fairer tax systems. We need more transparency on
how governments and, yes, companies operate.
Let me tell you why. Itís the oldest observation of the modern age
that we are all interconnected. Communication is faster than ever,
finance is more mobile than ever and yet the paradox of this open
world is that in many ways itís still so closed and so secretive.
Itís a world where trade is still choked off by barriers and
bureaucracy. Itís a world where some companies navigate their way
around legitimate tax systems and even low tax rates with an army of
clever accountants. Itís a world where, regrettably, corrupt
government officials in some countries and some corporations run
rings around the letter and the spirit of the law to rip off hard
working people and to plunder their natural resources.
There is a long and tragic history of some African countries being
stripped of their minerals behind a veil of secrecy. We can see the
results: the government cronies get rich, some beyond their wildest
dreams of avarice, while the people in those countries stay poor.
So it is clear how devastating this can be for some developing
countries. But frankly all this matters, and should matter, to
developed countries too. When trade isnít free, we all suffer. When
some businesses arenít seen to pay their taxes, that is corrosive to
the public trust. When shadowy companies donít play by the rules,
that drives more box ticking, more regulation, more interference and
that makes life harder for other businesses to turn a profit. That
is why I want this yearís G8 to bring a new focus on these issues:
trade, tax, transparency. Those are the issues we are going to be
driving for this year.
So first weíre going to push for more openness on trade. In late
2008 we saw the steepest fall in global trade ever and the deepest
since the Great Depression, and more than four years on trade has
still not fully recovered. Now this should be at the forefront of
the mind of every leader, every diplomat during those long
negotiations on trade; and thereís an enormous amount on the table
today. Youíve got the US leading efforts on the Trans Pacific
Partnership. In the European Union weíre about to embark on our
biggest-ever programme of free trade agreement negotiations. Weíve
got parameters for a deal with Singapore, negotiations with Canada
nearly complete, and weíre about to launch negotiations with Japan,
and of course thereís the beginning of negotiations on an EU-US
trade deal. Now the EU and the US together, we actually make up
about a third of all global trade. A deal between us could add over
fifty billion pounds to the EU economy alone. Agreeing all the EU
deals on the table could increase our GDP by two per cent and create
over two million jobs across the European Union.
Trade between developing countries and within Africa is growing and
we should work to encourage that further - and we must also continue
to support the multilateral system. This means working through the
WTO to agree a deal to sweep away trade bureaucracy at the
ministerial conference in Bali this December. That alone could be
worth around seventy billion dollars to the global economy and help
trade to flow freely across the world. It is ambitious, but we must
seize these opportunities to give a massive boost to free trade
across the world.
Now the next T is tax. We want to use the G8 to drive a more serious
debate on tax evasion and tax avoidance. This is an issue whose time
has come. After years of abuse people across the planet are rightly
calling for more action, and most importantly there is gathering
political will to actually do something about it.
Again let me put my cards squarely on the table. Of course there is
a difference between tax evasion and tax avoidance. Evasion is
illegal. It can and should be subject to the full force of the
criminal law. But what about tax avoidance? Now of course thereís
nothing wrong with sensible tax planning and there are some things
that governments want people to do that reduce tax bills, such as
investing in a pension, a start up business or giving money to a
charity. But there are some forms of avoidance that have become so
aggressive that I think it is right to say these raise ethical
issues, and it is time to call for more responsibility and for
governments to act accordingly.
In the UK weíve already committed hundreds of millions into this
effort, but acting alone has its limits. Clamp down in one country
and the travelling caravan of lawyers, accountants and financial
gurus will just move on elsewhere. So we need to act together,
including at the G8. If there are difficult questions about whether
existing standards are tough enough to tackle avoidance we need to
ask them. If there are options for more multilateral deals on
automatic information exchange to catch tax evaders we need to
And we want to work with developing countries on this too. The fact
is, the poorer the nation, the more they need the tax revenues - but
often the weaker the capacity they have to collect them. But we must
not let them off the hook; it can be done. The UK has worked with
the Ethiopian authorities to help with tax collection, and in the
last decade the amount of tax collected has increased by seven
times. All of this in developed and developing countries alike comes
down to a simple issue of fairness.
I believe in low taxes, that is why my government is cutting the top
rate of income tax, weíve cut corporation tax
Individuals and businesses must pay their fair share. And businesses
who think 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 bills right down, well they
need to wake up and smell the coffee, because the public who buy
from them have had enough.
And letís be clear: speaking out on these things is not anti
capitalism, it is not anti business. If you want to keep tax rates
low youíve got to keep taxes coming in - put simply: no tax base, no
low tax case. You need to have that base in order to deliver the low
taxes that businesses and competitive economies need. This is the
argument thatís been made brilliantly by the economist Paul Collier
and Iím delighted that heís been advising my government ahead of
this G8. 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 so as
Now the third big push on our agenda is transparency: shining a
light on company ownership, land ownership and where money flows
from and to.
This is critical to developing countries. Of course aid has played,
and will continue to play, an important role in development, and Iím
proud that the UK is keeping its aid promises. Iím also proud that
we are leading the fight on global hunger, funding nutrition
programmes for twenty million children and pregnant women over the
next few years.
There should be, there will be, and I will back a major push on
tackling global hunger, under-nutrition and stunting this year. And
I applaud the NGOs, the charities, the organisations that are
motivating public opinion, business opinion, world opinion on this
absolutely vital issue.
But at the same time as talking about aid we also need to move the
debate on so weíre not just dealing with the symptoms of poverty but
weíre tackling the causes. Now Iíve argued for years that there is a
golden thread of conditions that enable open economies and open
societies to thrive. The rule of law, the absence of conflict and
corruption, the presence of property rights and strong
institutions: these things are vital for countries to move from
poverty to wealth.
And now as the co-chair of the UN High Level Panel, and with the
presidency of the G8, there is a chance to put turbo boosters under
this agenda, and Iím determined to seize that chance.
I want this G8 to lead a big push for transparency across the
developing world, and to illustrate why let me give you one example.
A few years back a transparency initiative exposed a huge hole in
Nigeriaís finances, an eight hundred million dollar discrepancy
between what companies were paying and what the government was
receiving for oil - a massive, massive gap. The discovery of this is
leading to new regulation of Nigeriaís oil sector so the richness of
the earth can actually help to enrich the people of that country.
And the potential is staggering. Last year Nigeria oil exports were
worth almost a hundred billion dollars. That is more than the total
net aid to the whole of sub Saharan Africa. So put simply:
unleashing the natural resources in these countries dwarfs anything
aid can achieve, and transparency is absolutely critical to that
end. So weíre going to push for more transparency on who owns
companies; on whoís buying up land and for what purpose; on how
governments spend their money; on how gas, oil and mining companies
operate; and on who is hiding stolen assets and how we recover and
return them. Like everything else in this G8, the ambitions are big
and I make no apology for that.
Thirty years ago more than half of our planet lived on the
equivalent of one dollar twenty five a day or less; today itís not
one half, it is one fifth. This is an amazing story of human
progress and it shows what is possible. We can be the generation
that eradicates absolute poverty in our world, but weíll only
achieve that if we break the vicious cycle and treat the causes of
poverty and not just its symptoms.
So let me end today by saying this: I know that some people might be
thinking heís talking about cracking down on tax avoidance, talking
about making companies be more transparent - doesnít this sound like
an anti-business, bash the rich, tax success agenda? Absolutely not.
This is a resolutely pro-business agenda. Iím about the most
pro-business leader you can find. I yield to no-one in my enthusiasm
It is an economic system that generated more wealth, unleashed more
human potential and reduced more grinding poverty than any other in
history. I donít believe that one personís wealth fairly gained
through free exchange in an open market is somehow the cause of
another personís poverty. I will have no truck with those who want
to demonise the successful, to level down rather than to build up,
or to those who seek continually to turn the word profit in to a
But I also passionately believe that if you want open economies, low
taxes and free enterprise then you need to lay down the rules of the
game and you need to be prepared to enforce them. Poor business
practice doesnít operate in a vacuum: it hurts the good. When one
company doesnít pay the taxes they owe then other companies end up
paying more. When some cowboys play the system all businesses suffer
from the fallout to their reputation - that is why itís not just
those in the NGOs whoíve been lobbying my government on these
issues, itís those in the high rises in the City of London: bankers,
lawyers, senior figures in finance. Theyíve told us to pursue this
agenda hard and that is exactly what weíre going to do.
This is a vision of proper companies, proper taxes, proper rules. A
vision of open societies, open economies and open government and we
are going to work with our partners in the G8 to achieve it for the
good of the people right across the world. Thank you very much
indeed for listening.
And Sell here!
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