Cameron "red carpet" jibe at G20 summit irks French

LOS CABOS, Mexico Tue Jun 19, 2012 6:40pm BST

Britain's Prime Minister David Cameron addresses the audience in Los Cabos June 18, 2012. Cameron is in Los Cabos, Mexico for the G20 Summit. REUTERS/Oswaldo Rivas

Britain's Prime Minister David Cameron addresses the audience in Los Cabos June 18, 2012. Cameron is in Los Cabos, Mexico for the G20 Summit.

Credit: Reuters/Oswaldo Rivas

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LOS CABOS, Mexico (Reuters) - British Prime Minister David Cameron triggered a war of words with France at the G20 summit in Mexico by vowing to "roll out the red carpet" for French firms if new President Francois Hollande follows through on his plan to raise taxes for the wealthy.

Cameron, who had a frosty relationship with Hollande's predecessor, Nicolas Sarkozy, made the jibe at a meeting with business leaders on Monday, drawing a cool response from the Socialist president's entourage.

Lawmaker Claude Bartolone said those French that did move to London to benefit from lower tax rates always ended up returning to France for medical care and to school their children because public services "no longer exist" in Britain.

France's European Affairs minister, Bernard Cazeneuve, dismissed the comments as misplaced "British humour."

Hollande refused to be drawn into the row, telling reporters in Los Cabos that Europe must show unity at a time of crisis, before adding: "We're always happy to put our fiscal policies up for comparison."

Cameron's government cut Britain's top tax rate to 45 percent from 50 percent in this year's budget, saying it was raising little in the way of revenue and acting as a barrier to enterprise.

He criticised Hollande's tax-and-spend approach at the meeting on Monday, in particular the wealth tax, a symbolic measure that would affect only about 3,000 French and make a modest contribution to reducing France's deficit.

In comments confirmed by Downing Street, Cameron said he would "roll out the red carpet" and "welcome more French businesses to Britain" if the new levy on millionaires went through. He said that by paying British taxes, French firms could help "pay for our health service and schools and everything else."

The British and French have clashed repeatedly on financial policy issues in recent years, including a high-profile row over new European budget rules at a summit last year, when Sarkozy famously told Cameron he had "missed a great opportunity to shut his mouth."

Not all the French officials in Los Cabos took Cameron's remarks seriously, with Labour Minister Michel Sapin joking: "Frankly, I don't understand how you can unfurl a red carpet across the Channel. It could get quite wet."

(Reporting by Noah Barkin, Elizaebeth Pineau and Matt Falloon; Editing by Padraic Cassidy)

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