Prime Minister is allowing companies to avoid £14 billion of taxes

12.38.38pm GMT Fri 6th Feb 2009

Prime Minister Gordon Brown

Speaking at yesterday's Prime Minister's Questions, Lib Dem Leader Nick Clegg MP accused Prime Minister Gordon Brown of creating a system that is losing this country billions of pounds, which could be used to give big permanent tax cuts to ordinary families. He urged the Prime Minister to clamp down on tax avoidance by Britain's biggest firms. Big companies, he said, were taking advantage of tax loopholes to avoid paying £14 billion in corporation tax alone.

Mr Clegg said: "Week after week, I have been asking the Prime Minister why he is not getting tough on tax avoidance. Every time, he tells me that he is doing all that he can. This week, newspapers have confirmed that big companies are using loopholes to get out of paying £14 billion in corporation tax alone. Instead of going on about British jobs for British workers, is it not time that he went on about British taxes for British companies?"

In reply, Prime Minister Gordon Brown MP said: "There is a case in America at the moment in relation to Swiss tax avoidance. Once it is resolved, I believe that it will be possible to get an international agreement for the exchange of information about tax cases. That would be the way to move forward our proposals for the exchange of information on tax and clamping down on tax evaders."

Mr. Clegg said: "The Prime Minister is living in denial. He created a system that lets big companies run rings round the Treasury, lets peers in the other place not pay their full taxes in this country and allows City bosses to pay less in tax on their capital gains than their cleaners pay on their wages. He is losing this country billions of pounds, which could be used to give big permanent tax cuts to ordinary families. Why should anyone trust him when he makes one rule for the fat cats and another for everyone else?"