Osborne G7 Talks Sees Chancellor Criticised After Dodging Details On Tax Avoidance

Osborne Dodges Details On Tax Avoidance After G7 Talks

George Osborne has been criticised for failing to set out any concrete steps to promote economic growth or tackle tax avoidance during G7 talks, despite his insistance that the meeting with finance ministers and central bank chiefs was "successful and constructive."

The Chancellor declined to give any details of the talks, which were held on an informal basis in a country hotel in Buckinghamshire, but suggested there was more agreement between the rich nations making up the group on how to nurture the recovery.

He said he recognised that the larger G20 group - which includes emerging economic powers such as China, India and Brazil - was now the "primary economic forum for setting the global rules of the game".

But he insisted the G7 nations - the United States, Germany, Japan, the UK, Italy, France and Canada - still wielded "major economic firepower" as they represented around half the global economy between them.

Speaking alongside Bank of England Governor Sir Mervyn King at the close of the two-day gathering, Mr Osborne said: "We have had a successful and constructive meeting.

"We are of course meeting at a time when financial market sentiment has improved and there are signs that this is feeding through to an improved outlook in some of our economies.

"However we all agreed that growth prospects remain uneven and we can't take the recovery for granted.

"So we focused our discussions on the necessary actions we as advanced economies, indeed economies which account for half of the entire world economy, can take to nurture the global recovery and ensure it is sustainable and lasting."

Osborne says there was a high level of agreement between G7 nations

While there were "still many challenges", he said, "this meeting confirmed that there are more areas of agreement between us on fiscal policy than is commonly assumed."

Also at the talks was IMF managing director Christine Lagarde as the body undertakes its annual health check of the UK.

The IMF, which will deliver its verdict later this month, has already suggested Mr Osborne must be more flexible with his deficit-reduction plans.

Mr Osborne said British overseas territories "need to do more" to end tax evasion.

Asked about the future of tax havens such as Jersey or the Cayman Islands, he said he had already been "very tough" in his message to them but wanted to see more action.

"Of course we would like these jurisdictions to do more," he said.

"We want them to commit to some of the existing agreements that are in place on tax information and transparency and we have these initiatives which we are pursuing in the G8, for example around beneficial ownership, which we would also expect all jurisdictions to be able to sign up to.

"Of course you have to respect that many of these territories have important industries and we don't want to unnecessarily damage them.

"But it is necessary to collect tax that is owed and it is necessary to reduce tax avoidance and the crown dependencies and the overseas territories need to play their part in that drive and they need to do more."

IMF managing director Christine Lagarde joined Osborne and the other finance ministers

Going into the meeting, the US indicated it was watching Japan for any signs of exchange rate manipulation, new trade agreements and measures to boost employment.

Mr Osborne said there was also firm accord on tackling tax cheats.

"We all agreed on the importance of collective action to tackle tax avoidance and evasion," he said.

"This is a key priority for David Cameron and myself and we are absolutely determined to make progress this year with the British presidencies of both the G7 and the G8.

"It is incredibly important that companies and individuals pay the tax that is due and this is important not just for Britain and for British taxpayers but also for many developing nations as well."

Among those attending the talks was Canada's central banker Mark Carney who takes over from Mervyn King as Bank of England Governor in July.

Sir Mervyn said the meeting had been "the most productive" of the 25 he had attended during his term at the helm.

Joking about his impending departure, he said: "In a week in which retirement came to Sir Alex Ferguson, it is pretty clear it has to come to everyone.

"I am looking forward to a new life."

The Chancellor declined to be drawn on fresh official figures which experts suggest could see the UK's apparent double-dip recession removed from the history books - insisting he would await final figures due out last month.

But he added: "It is a tough economic situation. But we are making progress and the economy is healing.

"We see evidence of that around us in the United Kingdom."

Shadow treasury minister Catherine McKinnell said: "It's disappointing that this G7 meeting has failed to set out any concrete steps to promote economic growth or tackle tax avoidance.

"George Osborne should reflect on why Britain is experiencing the slowest economic recovery of any G7 country other than Italy.

"With Britain's economy flatlining and living standards falling, it's no wonder even the IMF is saying the Chancellor's failing policies need to change."

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