The Panama Papers leak revealed that Ian Cameron, the Prime Minister’s father, owned an offshore based business in which David Cameron owned shares. The PM’s involvement is not illegal, but it’s hypocritical.
On the third of April, German newspaper Süddeutsche Zeitung published 2.6 terabytes of encrypted internal documents from Panamanian law firm Mossack Fonseca. This revealed how the rich avoid paying tax. Listed in the documents was Ian Cameron, the father of our current Prime Minister and owner of Blairmore Holdings Inc – an offshore investment fund.
When asked if he owned shares in Blairmore Holdings, a spokesperson for David Cameron claimed it ‘is a private matter‘ which, well, it isn’t.
So he was asked again and replied ‘I have no shares, no offshore trusts, no offshore funds, nothing like that. And so that, I think, is a very clear description‘ which, well, turned out to be an rather unclear description.
Thus prompting another statement from number 10. ‘To be clear, the prime minister, his wife and their children do not benefit from any offshore funds. The prime minister owns no shares. As has been previously reported, Mrs Cameron owns a small number of shares connected to her father’s land, which she declares on her tax return‘ This seemed an improvement, until the PM realised his statement needed to be even more watertight.
And so this statement followed. ‘There are no offshore funds/trusts which the prime minister, Mrs Cameron or their children will benefit from in the future.‘ A statement which instantly threw up questions about the past.
Then the Prime Minister finally revealed that he did indeed own ‘5,000 units in Blairmore Investment Trust, which we sold in January 2010‘ for £31,500.
The Prime Minister also received £300,000 inheritance on his father’s death, curiously, under the £325,000 tax threshold. His mother also moved two payments of £100,000 into his account in 2011. Probably to avoid paying around £80,000 in inheritance tax.
Even if Cameron has not avoided any tax himself, and paid the relevant taxes on his dividends from his father’s company. He has still benefited from a tax haven by having a part in the company, receiving cash generated by the company through inheritance, and through everything his father provided him with – his Eton education for example.
Now, the actions of David Cameron and of his father are not illegal, and the practice of locating offshore is relatively commonplace. But two main questions remain, is it morally correct? and why was the PM not transparent about this from the start?
Personally, I, along with many others believe it is rather hypocritical of Cameron to tweet statements like this:
I have a simple view that if you have done the right thing – worked, saved and paid your taxes – you should be rewarded, not punished.
— David Cameron (@David_Cameron) May 2, 2015
and call Jimmy Carr’s actions ‘morally wrong’ in 2012, while he is implicated in a similar situation in 2016. Especially as the head of a government who impose massive cuts on public services because the state doesn’t have enough funds to run them. When these public services are the same services tax pays for. He then claims ‘we are all in this together’ – a statement a number of public sector workers would disagree with.
This may be why this scandal generated this level of attention and outrage, because at a time where services are cut and millions are using food banks; the head of the group of people meant to represent us, is implicated in a move to avoid paying tax, even though the level of wealth he enjoys is far above what any ‘ordinary’ person could achieve.
The second issue with this scandal is that the man the public put into office as the Prime Minister, who relies on the electorate for his mandate, who is paid by the public, attempted to hide his tax affairs. The right to privacy of a tax return may be a reasonable request from any ‘ordinary’ person, but when you put yourself into the position of Prime Minister you need to have an immaculate record on all matters. If I demanded that everyone ceased to share blog posts on Facebook I would not be in a very good situation to enforce it.
This attempt at deception was seen by many as a cause for protest, with two thousand people descending on downing street to call for his resignation on Saturday, the hash tag #ResignDavidCameron trending second worldwide on the same day, and a petition to hold a general election gaining over 140,000 signatures.
The press also took the opportunity to wound Cameron, with even the right-wing newspaper headlines against him. Of course the reason for this was the upcoming EU referendum in which the Prime Minister is campaigning against a brexit, where as many tory newspapers are campaigning to leave. Therefore any evidence to weaken Cameron’s public perception will be beneficial to those with a eurosceptic agenda to push.
The events of this week have been far from ‘good’ for David Cameron and they are likely to live with us all until June 23rd, when a decision is made upon membership of the EU. And that decision will last a generation.