Free trade, transparency and a crackdown on tax cheats will be at the heart of Britain’s G8 presidency, Prime Minister David Cameron told the World Economic Forum in Davos on Thursday as he set out his vision for a more competitive Europe.
The speech comes a day after Cameron made headlines by promising the British people a vote on European Union membership if he wins the next general election in 2015.
“We need more free trade. We need fairer tax systems. We need more transparency on how governments — and yes, companies — operate,” Cameron told political and business leaders at Davos.
These three issues will be the focus of the G8 meeting to be hosted by Britain later this year, he said.
Cameron said the European Union and the G8 — made up of Canada, France, Germany, Italy, Japan, Russia, Britain and the United States — all face the “looming, insistent question” of how to compete and succeed in the global economic race.
He sees free trade as key to that success – saying that when it isn’t free, everyone suffers.
He wants Britain to be outward-looking, Cameron said, as he insisted that his referendum promise was “not about turning our backs on Europe” but about making the 27-member bloc work for everyone.
“Let’s negotiate a new settlement for Europe that works for the UK and then let’s get fresh consent for it. It’s not just right for the UK. It’s necessary for Europe,” he said.
“Europe is being out-competed and out-invested — and it’s time we make it an engine for growth, not a source of cost for business and complaint for our citizens.”
Cameron said the question of fairer taxes, more open trade and greater transparency apply just as much to the developed countries of the G8 as to poorer nations.
And he dismissed the idea that speaking out on the issue of taxes and transparency made him anti-capitalism or anti-business.
“Ethical issues”
Poor practice by some firms has an impact on those that play by the rules, he said.
There is a difference between tax evasion and tax avoidance, he added, “but there are some forms of avoidance have become so aggressive that I think it is right to say — these raise ethical issues — and it’s time to call for more responsibility and for governments to act accordingly.”
“I’m a ‘low tax’ Conservative but I’m not a ‘companies should pay no tax’ Conservative,” added Cameron, who heads Britain’s Conservative Party.
Meanwhile, transparency about the flow of money is key to poorer countries moving from poverty to growth, Cameron said.
“Like everything else in this G8, the ambitions are big, and I make no apology for that,” he said.
“We can be the generation that eradicates absolute poverty in our world,” he said, but only if leaders focus on the cause, not the symptoms.
CNN’s Richard Quest said Cameron’s attempt to go after tax cheats could be seen as good populist politics and an easy shot as he tries to distract from other matters.
On Wednesday, Cameron promised that if his party wins the 2015 general election, the country will get to vote on whether Britain stays in the European Union on the basis of a renegotiated deal, or leaves.
The referendum should not be held until it’s clear how changes made after the crisis in the eurozone work out, he said, but will be held in the first half of the next parliament.
The long-awaited speech was met with approval by those in his party who want to see Britain get some powers back from the EU, as well as a reduction in legislation they say holds back businesses.
But critics — including his party’s coalition partner, the Liberal Democrats — say now is not the time to create uncertainty among businesses and industry over Britain’s future in the European Union.
It is also unclear whether the other 26 members of the European Union will be willing to renegotiate the terms of Britain’s membership.
Fair compromise?
Cameron insisted he is not an isolationist and that he wants Britain to remain at the heart of the single market.
But, he said, it was time to face the difficult questions over the future of the European Union, including how to make it more competitive and more adaptable.
France and others have made it clear that Cameron cannot “cherry-pick” which elements of the European Union he signs up to, or risk unraveling the union to suit British interests.
U.S. President Barack Obama has also said “the United States values a strong UK in a strong European Union.”
But German Chancellor Angela Merkel gave Cameron some room for maneuver, indicating she was open to discussions on a “fair compromise.”
She is also due to give a speech Thursday at Davos, the annual forum that this year is attended by nearly 40 world leaders and more than 2,000 executives.
Italian Prime Minister Mario Monti, speaking at Davos Wednesday, predicted Britain would remain in the EU.
“I am confident that if there is to be a referendum one day, the UK citizens will decide to stay in the EU and contribute to shape its future,” he said. “I think the EU does not need unwilling Europeans.”
Britain is a net contributor to the European Union and an important player in the single market, which may give Cameron some additional sway — but critics warn he is taking a big gamble.
Former Belgian Prime Minister Guy Verhofstadt, who leads the Alliance of Liberals and Democrats for Europe in the European Parliament, warned against trying “hold the EU to ransom.”
–CNN’s Irene Chapple reported from Davos, and Laura Smith-Spark from London
