David Cameron and the Panama Papers
The publication of the Panama Papers, a massive cache of documents detailing the tax-avoidance activities of thousands of people across the world, became a personal crisis for the Prime Minister, David Cameron, when his late father’s name cropped up.
The leak was from the world’s fourth biggest offshore law firm, Mossack Fonseca, and documented the activities of more than 200,000 companies holding property and bank accounts in offshore tax havens like the British Virgin Islands. No-one suggested that the Prime Minister’s father had done anything illegal; Ian Cameron had run an offshore fund through Mossack Fonseca that avoided British taxes for thirty years.
Faced with rising anger about the extent to which rich people could avoid taxes, David Cameron released a summary of his tax returns for the previous six years, plus details about money inherited and given to him by his family, his salary, the support received as Leader of the Conservative Party, the income from the renting out of his home and the interest on his savings. The Chancellor, George Osborne, followed suit and the Labour Leader, Jeremy Corbyn, published his tax return. The Prime Minister made a statement to the Commons, as soon as the House returned from its Easter break.
He was not suggesting all MPs would have to publish the same information, arguing that since the Prime Minister, the Chancellor and their Labour opposite numbers were, or wanted to be, responsible for the nation’s finances, they were a special case.
He accepted criticism of the way he’d handled questions about his finances but told MPs he’d been angry about the way his father’s memory was being traduced ‘I want to put the record straight. This investment fund was set up overseas in the first place because it was going to be trading predominantly in dollar securities so, like very many other commercial investment funds, it made sense to be set up inside one of the main centres of dollar trading.’
He added that pension funds, along with other institutions, invested in offshore funds and that, from now on, most British overseas territories which are tax havens will share information with the UK authorities.
Jeremy Corbyn said the Panama Papers had ‘driven home what many people have increasingly felt: that there is now one rule for the super-rich and another for the rest. I am honestly not sure that the Prime Minister fully appreciates the anger that is out there over this injustice... with families lining up at food banks to feed their children, disabled people losing their benefits, elderly care cut and slashed and living standards going down. Much of that could have been avoided if our country had not been ripped off by the super-rich refusing to pay their taxes’.
The leader of the SNP at Westminster, Angus Robertson, also complained that the rules for normal taxpayers were different from those ‘for a small ultra-rich elite’ but he focused on the UK’s ‘particular responsibility’ for dealing with tax avoidance in its overseas territories and dependencies.
Andrew Tyrie, the influential Conservative Chair of the Treasury Select Committee said there was ‘no point in moralising’ about legal tax avoidance – what was needed was action to close loopholes in the law and tax simplification to ensure there were are fewer of them.
Meg Hillier, the Labour ex-minister who chairs the powerful Public Accounts Committee (PAC), said the publication of the Panama Papers ‘shone sunlight on areas where some people did not want it to go and she called for more corporate tax transparency. That theme was picked up by her predecessor at the PAC, Margaret Hodge, who had led a high profile inquiry into tax avoidance by multi-nationals. She wanted assurance that HMRC would have access to the register of companies operating in British Crown dependencies.
A Conservative former minister, Sir Alan Duncan, accused the Prime Minister’s critics of hating ‘anyone who has even a hint of wealth in their life… we risk seeing a House of Commons that is stuffed full of low achievers who hate enterprise and hate people who look after their own family and who know absolutely nothing about the outside world’. The Prime Minister may not have found that entirely helpful, saying ‘I do not want us to discourage people who have had a successful career in business or anything else from coming into this House and making a contribution’.
Labour veteran, Dennis Skinner, said the Prime Minister had failed to answer questions about a taxpayer-subsidised mortgage and to Conservative fury he added ‘Maybe Dodgy Dave will answer it now’. The Speaker immediately stepped in to ask him to withdraw the word ‘Dodgy’ but Mr Skinner was unrepentant ‘This man has done more to divide this nation than anybody else and he has looked after his own pocket. I still refer to him as Dodgy Dave’. Moments later he was ordered from the Chamber.