Although the Group of Eight has often been used for gestures, it affords a rare opportunity for common action by the governments of major countries. Manifestly, there have been serious deficiencies in global economic governance. By addressing them the G-8 can help not only ourselves, but the people struggling in the world's poorest countries. This has been Britain's agenda as host of this year's G-8.
At the top of the agenda has been taxation. Tax cooperation has not kept pace with the internationalization of business and the innovations of corporate lawyers and accountants. Treaties designed to avoid double taxation now deliver double non-taxation. The resulting tax avoidance reduces fiscal revenues and provides an unlevel playing field for business. At a time of national austerity, it is essential for us to address this problem.
But the problem has been shared even more acutely by poor countries where there is a gulf between the capacities of companies and of tax authorities. If all the companies operating in Africa paid reasonable taxes, most countries would no longer need our aid. Closing all the loopholes cannot be done overnight. But this G-8 aspires to deliver clear political commitment from heads of government, linked to sustained technical cooperation.