28 June 2012 Last updated at 15:52 ET

Guernsey Chief Minister says UK must police own taxes

Deputy Harwood described Mr Murphy's comments as "rubbish"

Guernsey's Chief Minister Peter Harwood has defended the island's finance industry against an accusation that it damages UK tax revenues.

Richard Murphy, from the Tax Justice Network, said the island was deliberately going out of its way to undermine other countries' tax systems.

Deputy Harwood said: "The remedy lies with the jurisdictions who feel that they are losing tax."

The UK government plans to introduce a General Anti-Avoidance Rule (GAAR).

The UK Chancellor George Osborne described aggressive tax avoidance as "morally repugnant" during his budget speech in March.

Last week Prime Minister David Cameron heavily criticised comedian Jimmy Carr for heavily reducing his tax bill via a Jersey-based tax product.

Mr Murphy said Guernsey was "causing major disruption to the world's financial systems".

Deputy Harwood described Mr Murphy's comments as "a load of rubbish" and said Guernsey was under no obligation to assist the UK in collecting revenues.

"We would have no question if the UK government wishes to introduce a general anti-avoidance regime," he said, "We have that under our own legislation."