Ben Chu: Why isn't a global tax on multinational profits on the agenda for G8?

Outlook Big Brother watched you. And Google? Google just loves you. The internet search leviathan's boss Eric Schmidt told us so this week. "Google will continue to invest in the UK no matter what you guys do," he told the audience at the company's annual Big Tent shindig this week. "We love you guys too much".

Of course, what Mr Schmidt and Google love isn't us Britons as individuals, but our money. The UK is the second-biggest advertising market for Google in the world, recording $4.9bn (£3.2bn) in transactions here in 2012.

But there's a truth, nonetheless, in Mr Schmidt's words. The massive UK market is more important to Google – and indeed many other multinationals – than those companies are to us. This puts David Cameron and George Osborne in a potentially powerful position as they seek to force Google and the rest of the galère of tax-avoiding multinationals to pay fair contributions to the public coffers.

The problem is that, for all their righteous rhetoric, the Conservative pair are actually targeting a continuation of the status quo. Messrs Cameron and Osborne have backed an overhaul of the OECD's "arm's-length" transfer pricing rules. But these are hopeless when it comes to valuing intellectual property rights, which is where most of the abusive multinational avoidance is taking place. Trying to address tax avoidance through the OECD framework will be like catching the wind in a butterfly net.

It is hard not to smell cynicism here. The thrust of the Coalition's domestic policies on multinational taxation has been very different from the crusading impression Messrs Cameron and Osborne have sought to project since public irritation on this subject exploded.

They have slashed corporation tax to lure multinationals to headquarter themselves in the UK. They've also set up a "patent box" tax break for big firms that register the rights to their intellectual property here. The first is beggar-thy-neighbour tax competition. The second will not boost domestic investment and will merely facilitate intellectual property shifting by multinationals. Similarly, the Coalition's new rules on Controlled Foreign Companies will make it cheaper for firms to shift profits to the UK from elsewhere.

The Coalition has extracted information-sharing agreements from tax havens such as Bermuda and the Cayman Islands. It is also pushing for country-by-country reporting by multinationals. Both would help expose the scale of global profit shifting. But without a new global taxation regime for multinationals, all this fresh information won't do much good.

We know what an effective new global company tax regime should look like. We have a model in the "unitary" tax system of the US, which extracts a tax levy from companies that operate in multiple states based on how much business they do in each jurisdiction. A similar system applied worldwide on multinationals should be on the table for serious consideration at the G8 meeting, chaired by Britain, in Lough Erne in June. The door is open to such radicalism. American political frustration at the tax dodging of multinationals is growing. Recession-hit European states need the revenues. Yet Mr Cameron will not be pushing for unitary taxation at the G8. Unless he does so, we will have to conclude that the Prime Minister is not really that serious about forcing global companies to pay their fair share.