Cameron ignites new war of words with France

[June 20, 2012]  PARIS (AP) -- As if it's not enough that England and France are battling for Europe's soccer championship this week -- now their leaders are sniping over taxes, too.

While their teams face decisive matches in Ukraine, British Prime Minister David Cameron ignited a stir while in Mexico at the G-20 summit with a swipe at new French President Francois Hollande's plan to raise taxes on the wealthy and large corporations to help France tackle its deficit and pay for new public spending intended to lift growth.

Cameron slammed Hollande's tax-and-spend approach to resolving the eurozone crisis in remarks before business leaders widely reported in the press but so-far unconfirmed by Downing Street officials.

"I think it's wrong to have a completely uncompetitive top rate of tax," Cameron said ahead of a Group of 20 meeting of leaders of the world's largest economies in Los Cabos, Mexico.

Cameron promised to "roll out the red carpet" for France's wealthy and businesses if Hollande's government goes ahead with a campaign pledge to increase the tax rate on earnings above (EURO)1 million ($1.26 million) to 75 percent.

Cameron said he'll "welcome more French businesses to Britain and they can pay tax in Britain and pay for our health service and schools and everything else."

France and Britain, rivals for centuries, have been strong -- if at times uncomfortable -- allies since the 20th century. As western Europe's top military powers, they cooperate closely on defense and were joint pillars of the NATO-led air campaign that helped end Moammar Gadhafi's reign in Libya.

The allies still engage in regular bouts of verbal sniping, such as last December when Cameron took a swipe at religious freedoms in France while the French finance minister criticized the U.K. economy.

French authorities were quick to answer Cameron's latest barbs.

"I hope those were after-dinner comments and that (Cameron) wasn't fully conscious when he said them because those kinds of comments just aren't done," Socialist lawmaker Claude Bartolone, a contender for speaker of parliament, told the French radio station Europe-1.

The head of France's communist party also hit back, saying it was "sad to see Britain's ambition to be Europe's tax haven."

Cameron "should have another ambition for his country than that," Pierre Laurent told French TV i-Tele. "In Europe the future is solidarity, not a war of all against all where selfishness rules."

Besides the 75 percent top tax rate, Hollande has pledged to crack down on tax breaks and raise taxes on banks and oil companies while reducing taxes on small and medium sized businesses.

[Associated Press; GREG KELLER]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.