G8 LEADERS will today turn their attention to trying to get international agreement to crack down on tax evasion, which costs the economies of the West billions of pounds every year in lost income.

David Cameron said countries were in their rights to set low tax rates but that companies had a moral obligation to pay their fair share. Pointing out how the controversy over fair tax had become a "kitchen table issue", the Prime Minister said: "It's perfectly acceptable for countries to set low tax rates to attract business and to be competitive; what's not acceptable is to turn a blind eye to bad corporate practice.

"What we need to make sure is that where people set their tax rates, we need to make sure the tax is actually paid."

Mr Cameron said he did not criticise the Republic of Ireland for having a low corporate tax rate, pointing out how the UK also had a low corporate tax rate. "But I do think it's important that having set the tax rate, that we expect companies to pay it."

Mr Cameron added that cutting corporation taxes in Northern Ireland – to allow it to compete with the south – was "absolutely something that could happen". However, it is thought concerns over what such a move might have on the debate for Scottish independence has meant the UK Government, for the time being, has parked the idea.

Elsewhere, Mr Cameron welcomed the launch of the US/EU talks on a free trade deal which he said could add £100 billion to Europe's economy. "The whole point of this meeting in Lough Erne is to fire up our economies and drive growth and prosperity around the world, to do things that make a real difference to people's lives," said the PM, after completing talks with Mr Obama and EU leaders.

There is no more powerful way to do that than by boosting trade, he added.

Barack Obama promised to make the trade talks a priority of his remaining term in office.

Earlier, in Belfast, he said that 15 years after the Good Friday Agreement, Northern Ireland was setting an example for people all over the world.