George Osborne's measures to crack down on tax avoidance are "pernicious" and will hit normal Britons rather than big multinational corporations, a senior Tory MP has warned.
In a highly withering attack on the Chancellor's plans, who delivered his Autumn Statement on Wednesday, Tory MP David Davis said that the "spectacularly incompetent" HM Revenue and Customs' retrospective clampdowns jeopardised London's status as a global business hub.
"London is seen as one of the fairest places to get adjudication on anything, our legal system is good, we have standards and taditions which are good. But when we start to say that that the tax system is no longer true, we put at risk the whole basis of our commercial success in the biggest and best capital in the world."
The senior Tory MP, who once stood against David Cameron for the party leadership, passed cutting judgement on Osborne's "economic activity tax" on multinational corporations, which has been dubbed a "Google Tax", remarking: "If it works, I'd be interested and impressed."
Davis was speaking on Thursday morning at an event hosted by the Institute for Economic Affairs and the Taxpayers' Alliance, at which former Lib Dem minister Jeremy Browne urged his party not to be a "party of protest-in-government".
Davis, who once served as Cameron's shadow home secretary in opposition, told the audience: "There is a serious risk to the rule of law coming from the government - the idea that we should have such a thing as general anti-avoidance legislation means that the HMRC can come back two or three years later and say 'No you got it wrong, can we have the money back'.
"This my view is pernicious and I promise you now the victims - that's the right word - the receipients won't be Vodafone, it won't be Google, it'll be some little corner shop person or someone who has taken out in good faith an investment in children's television and it's always three or four years later when you've forgotten the political benefits of propping something or other later that you start taking money back off people, which frankly if it was commercial would be called mis-selling."
Davis also criticised the government's tobacco levy, warning: "We'll end up losing money on that."
He also praised Tory MP Robert Halfon for his "great deal of lobbying" on keeping fuel duty frozen, remarking that the campaign has been effective "because people see the cost".
He added: "Governments assiduously avoid visible taxes, they always prefer invisible taxes and no government is better than any other."