David Cameron At World Economic Forum, Davos, Slams Corporate Tax Evasion For Harming Low Taxation

David Cameron has declared himself a "low tax conservative, not a no tax conservative" at a speech which skewered tax avoidance from corporations in front of leading businessmen, economists and lobbyists.

The prime minister, speaking at Davos, Switzerland, said he was "as pro-business a leader as you can find... I yield to no one in my enthusiasm for capitalism" but argued that tax avoidance was driving away customers and infuriating governments.

Cameron addressed a panel session of the 43rd Annual Meeting of the World Economic Forum

"Speaking out is not anti-capitalism, or anti-business. If you want to keep tax rates low you have to keep taxes coming in."

Taking what appeared to be a pop at Starbucks, which came under fire for its tax affairssta last year, he said: "Any businesses who think that 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 bill right down - well, they need to wake up and smell the coffee because the public who buy from them have had enough."

Britain, which will chair the G8 this year, will put the focus on "trade, tax and transparency".

"This is a problem for all countries, not just for Britain," he said.

"We want open economies, low tax and free enterprise. You need to lay down the rules of the game and be prepared to enforce them.

"When one company doesn't pay the taxes they owe, then one company ends up paying more.

When some cowboys play the system, all businesses suffer the fall-out to their reputation.

"That's why it's not just those in the NGOs who have been lobbying my Government on these issues, it's those in the high-rises of the City of London - bankers, lawyers, senior figures in finance.

"They've told us to pursue this agenda hard, and that's what we're going to do."

He added: "We have a vision of proper companies, proper taxes, proper rules. We are going to work with our partners to achieve it for the good of the people right across the world."

Much of the immediate reaction on social networks blamed the prime minister for having taken no action to close legal tax avoidance loopholes.

Matthew Sinclair, Chief Executive of the TaxPayers' Alliance, said: "David Cameron has been quick to highlight the problem of tax avoidance but slow to actually do anything about it.

"Families are left feeling short changed and let down by their politicians because international corporations can take advantage of loopholes and reliefs not open to them.

“But it is our broken tax code that allows big companies with clever accountants to exploit the system and minimise their bills.

"So the onus should in fact be on the Prime Minister and his government to take action, as they are the ones who can simplify Britain's hideously complex tax code. Empty moralising won't fix a system that is fundamentally broken and has lost its legitimacy. We need serious tax reform to ensure everyone pays no more or less than their fair share."

Cameron's speech came just hours after the IMF's chief economist suggested that Britain should tone down its austerity plans to help the struggling economy.

On Radio 4's Today programme, Olivier Blanchard said the Budget in March would be a good time for Chancellor George Osborne to "take stock" of his plan A.

"We've never been passionate about austerity. From the beginning we have always emphasised that fiscal consolidation should be slow and steady," he said.

On Wednesday night, a coalition of charities launched a campaign called "Enough Food For Everyone If.." which aims to confront global tax avoidance and rigged markets as a wat to combat poverty and hunger.