Prime Minister David Cameron says he would 'lay dawn the rules and enforce them.'

British PM David Cameron. Photo: Getty Images

BRITAIN'S Prime Minister David Cameron launched a broadside at multinational tax avoiders, warning them to ''wake up and smell the coffee'' as he pledged to lead the global fight against ''aggressive avoidance''.

In an apparent swipe at Starbucks and other multinationals, Mr Cameron said the public had ''had enough of businesses who think that they can carry on dodging their fair share or that they can keep on selling to the UK and setting up evermore complex tax arrangements abroad to squeeze their tax bill right down''.

In a passionate speech in Davos, Mr Cameron said Britain would use its leadership of the G8 to clamp down on tax avoidance as part of a drive to boost trade and efficiency, particularly in Europe.

Declaring that ''aggressive tax avoidance'' was a problem for ''all countries, not just for Britain'', he said he would ''lay down the rules and enforce them''. He argued the G8 needed to work together to stop the ''travelling bandwagon'' of lawyers and consultants from moving on once tax loopholes were closed.

Michael Izza, chairman of the Institute of Chartered Accountants in England and Wales, the trade body for chartered accountants, said he was ''disappointed to hear the Prime Minister again dismiss accountants, this time as an 'army' of avoiders. We don't recognise that description.''

Despite criticism of the UK referendum, Mr Cameron used his speech to launch a blistering attack on the European Union. He called for Europe to ''be frank'' about its performance and said the bloc was being ''out-competed, out-invested and out-innovated''.

German Chancellor Angela Merkel surprised delegates by backing Mr Cameron rather than launch a counter-attack. She used her speech to back Mr Cameron's calls to clamp down on tax avoidance and to boost competitiveness. ''EU member states can only grow when they produce goods that can be sold on the international market place,'' she said.

But Mr Cameron immediately faced criticism for damaging Britain's attractiveness to international firms with his tax threats.

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