G20 to set debt target for leading countries

 By Harry Wilson, and James Titcomb

The UK is expected to sign up to cutting total public debt from a forecast level of 85.6pc of GDP in 2016 to 84.8pc a year later. 

The rest of the G7, including France, Italy and the US, will agree to similar targets at a September meeting of the G20 group of major advanced and developing countries in St Petersburg, the official told Reuters. 

The plans were presented at a gathering of G20 finance ministers and central bank governors and builds on a pledge made at a previous meeting in 2010. 

Christine Lagarde, the head of the International Monetary Fund, said countries would have to come up with their own plans on how to cut public debt. 

“Our view is that it should be country-specific, it should be progressive over time, but certainly for all of them, it should be anchored with medium-term measures, goals that will bring that degree of confidence to countries serious about bringing their debt down in the long run,” she said. 

The agenda at Moscow has been dominated by tax evasion and avoidance, with members agreeing a deal whereby they will automatically share data on where companies declare profits and pay tax. 

“Addressing avoidance is an important step towards a global tax system that is fair and fit for purpose for the modern economy,” said George Osborne, the Chancellor. 

“Following the agreement between advanced economies under David Cameron’s leadership at the G8 last month, that agreement has now been extended to the emerging and developing economies in the G20. 

“Our message is clear. We want a competitive tax system that supports investment, jobs and growth, but tax that is owed must be paid, so that everyone pays their fair share.” 

The G20 also backed a 15-point plan from the Organisation for Economic Co-operation and Development (OECD), which included forcing companies to pay tax where their sales are made and encouraging more transparency about their tax arrangements. 

The group said that Australia, which assumes the G20 presidency next year, would make clamping down on tax avoidance a priority, as David Cameron has done with Britain’s term in the G8 this year. 

Australia and Mexico have said they will join a pilot scheme established by Britain, France, Germany, Italy, Spain and the US to exchange tax information. 

It added that it has asked the OECD to draw up a timeline for implementing concrete changes during 2014. 

Tax has soared up the political agenda following reports about the schemes used by some of the world’s best known companies, including Apple, Google and Starbucks, to minimise tax payments.