Carney warns of growing inequality and calls for IT firms to be 'responsible' over tax

Mark Carney, the governor of the Bank of England (BoE), called for the world’s big technologies firms to pay more taxes.

Speaking at the World Economic Forum in Davos, Carney warned the threat of inequality was growing and stressed some technology companies had benefited from international tax rules.

“Some of the firms that take advantage of international tax rules are the tech companies”, he said.

“The amount of tax they pay is small in relation to the system. A sense of responsibility is needed.”

In December chancellor George Osborne announced plans to impose a 25% levy on profits generated in Britain but directed abroad, as the government weighed in on a raging debate.

The BoE governor’s comments are likely to increase the scrutiny on companies such as Google, which has been criticised for reducing its UK tax bill via a series of offshore arrangements.

The firm’s UK division reported sales of £642m in 2013 while corporation tax was £21.6m. However, Google has admitted the scale of its business in Britain was much larger, with sales amounting to £3.6bn, the majority of which was diverted through Ireland.

By having the lion’s share of their sales shifted offshore, Google reached an effective tax rate of 15.7% in 2013, a figure below the headline tax rate in the UK and all its major markets.

“Many people are over-skilled for the jobs they are doing, which keeps wages low,” said Carney, adding that while he remained positive over the benefits deriving from technological progress, a balance had to be found to prevent inequality.

His comments were echoed by Christine Lagarde, the managing director of the International Monetary Fund, who said her organisation had stepped up the fight against growing inequality.

“Inequality is not conducive to sustainable growth,” she said.

“If you increase the income share of the poorest you get multiplier effect that you don’t get if you increase the income share of the richest.

“Redistribution policies are not counter-productive for growth.”