Nigel Lawson has dismissed David Cameron's efforts to crack down on companies avoiding tax as "getting nowhere fast" and "prancing around" just hours before the Prime Minister promised a "relentless" pursuit of tax avoiders.
Speaking in the House of Lords on Wednesday night, the former Tory chancellor warned that small firms were facing the "full rigour" of corporation tax, while multinationals "shift their profits and their intangible assets around the world in such a way that they pay little or in some cases no UK corporation tax at all".
He added: "It is a totally inequitable system. So what is the government doing? Just prancing around saying we are talking about with our opposite numbers from other OECD countries and other European countries and goodness knows what.
"They love going to these conferences and they happily make statements that they have reached a great understanding and a great agreement but the problem is just the same, it hasn’t gone away."
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This comes after a tax evasion deal agreed by George Osborne with Switzerland, that was set to recoup £3.12 billion from Britons hiding money in Swiss bank accounts, has only brought in £440 million so far for 2013.
Lawson called on the government to start "taking a lead" over corporate tax avoidance, adding: "I have to say to the government that you are not even getting nowhere fast - you are getting nowhere slowly."
"God forbid that the United Kingdom should take a lead and introduce a sensible tax system of its own which would probably comprise a very low level of corporation tax - tax on corporate profits - and perhaps a low level of corporate sales tax, because sales are where they are and sales in this country are sales here which we can tax here."
Lawson's withering attack on the government last night came just before David Cameron promised a "relentless" corporate tax avoidance crackdown.
The Prime Minister announced today that a UK register of the beneficial ownership of companies would be made public, lifting the "cloak of secrecy" international cash flows.
Speaking at the Open Government Partnership summit in London, he said: "For too long a small minority have hidden their business dealings behind a complicated web of shell companies - and this cloak of secrecy has fuelled all manner of questionable practices and downright illegality."
"Illegality that is bad for the developing world - as corrupt regimes stash their money abroad under different identities. And illegality that is bad for Britain's economy too - as people evade their taxes through untraceable trails of paperwork.
"Not only is this hugely unfair to the millions of hard-working people in Britain who pay their tax, but it's also bad for business. To keep corporate taxes low, you've got to keep corporate taxes coming in. As I've put it, no tax base - no low tax case.
"So that's why we need to shine a spotlight on who owns what and where money is really flowing.
"This summer at the G8 we committed to do just that - to establish a central register of company beneficial ownership. And today I'm delighted to announce that not only is that register going to go ahead, but that it's also going to be open to the public."
But Labour's shadow treasury minister Shabana Mahmood said Cameron "needs to go much further to tackle tax avoidance".
She added: "With the amount of uncollected tax rising in the last year to £35 billion, it's clear this Government is failing. David Cameron needs to explain why he decided not to close down the eurobonds tax loophole and why his Swiss tax deal has raised a fraction of the money promised," she said.