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Panama leak: What has David Cameron done wrong?

David Cameron

You may (or may not) be surprised to hear that I don’t think David Cameron did anything wrong by benefiting from the Panama-based offshore trust that his father set up.  In my opinion, if a person can legitimately reduce their tax liability then they should be able to do so.  I said the same back in 2012 when Mr Cameron described comedian Jimmy Carr as “morallywrong” to put his money into the K2 tax avoidance scheme

That said, a number of people are now saying that the fund with which Cameron was involved actually increased the tax liabilities of the Cameron’s rather than reducing them.  The rationale behind this claim is that being based in Panama may lead to high returns to off-set the higher tax.  This seem reasonable, but if that is the case I am confused why the Prime Minister hasn’t simply said so from the beginning and I’m even more confused why he felt the need to off-load this investment before becoming Prime Minister and saying he would crack down on tax avoidance.

So then what did Cameron do wrong?  Two things I think.  First, he misled the British public (and for once we should take a stand against politicians doing that); and secondly, he has been shown to be a hypocrite of the highest order.  You may say “well they’re all hypocrites” but that’s no reason to put up with it.  If all police officers were corrupt you wouldn’t argue there’s no point doing anything; well, I hope you wouldn’t anyway.

Mr Cameron has in the past few days told us that his tax affairs are “private”.  The same thing he said about Conservative MP and current London Mayoral candidate Zac Goldsmithwhen he was reported to have lodged much of his £200M fortune in the Cayman Islands.  After saying it’s all my own business and none of yours, Downing Street spokesmen, presumably on the instructions of Mr Cameron issued some more statements.  The second statement said Mr Cameron had “no shares, no offshore trusts, no offshore funds”.  Later clarifying that, “the prime minister, his wife and their children do not benefit from any offshore funds”.  A further statement told us that the Cameron family would not benefit from any offshore funds in the future.  To the casual observer this might look like a denial of any benefit from offshore funds.

The Prime Minister has subsequently confessed that he did in fact benefit from money kept in Blairmore Investment Trust, the Panama-based fund created by Ian Cameron, the PM’s dad.  He said that he sold “everything – shares, all the rest of it – so I can be transparent.”  If transparency is his thing, then you might wonder what all the stonewalling was about in the first four statements to the press!  You might also be curious to know what “all the rest of it” includes.

At this point, I’m going to ask again why, if Mr Cameron is not making any tax savings from these investments has he not said so?  He just kept issuing misleading statements about “offshore funds”. When interviewed by Robert Peston the Prime Minister did say that he had paid all his taxes, which is nice.  But, then why did he go three days talking about offshore investments rather than just telling us from the beginning, "yes I had some money abroad, I paid all my tax on it, thank you very much."

If the arrangement worked as Mr Cameron describes and he paid all his taxes then the sale of the assets that took place just before he became PM will show up in his Parliamentary declarations, won't they?  Well, what needs to be declared?  According to,

"MPs and Members of the Lords must declare certain financial interests.

The purpose is to provide information on any financial or non-financial benefit received by a MP or Member of the Lords which might reasonably be thought by others to influence their actions, speeches or votes in Parliament or influence their actions taken in their capacity as a Member."

Is the fact you've recently been invested in an offshore fund and are now proposing a crackdown on similar funds that help tax avoidance something that "might reasonable be thought by others to influence [and MP's] actions, speeches or votes in Parliament"?  I'd say it is, so it's surprising Mr Cameron neglected to declare this income.

Something about the PM’s claims strikes me as unbelievable at first glance – he says that he paid UK tax on the money he had put in Panama.  As somebody else said on Twitter, putting your cash in an offshore investment fund and then paying tax on it is a bit like smoking cannabis but not inhaling!  Jo Maugham QC is an expert tax barrister who has this to say about Panama:

“For the purposes of UK tax law, most tax havens are the same. There is no magic effective in UK tax terms that can only be performed in Panama. Moreover, Panama is not next door. It is not a British tax haven with the comforting familiarity such brings. It does not enjoy an especial reputation for trust and solidity.

People think of these things when they are choosing where to put their money. They are big disadvantages for Panama.

So there has to be a reason why you go there.

What Panama has offered – its USPs in the competitive world of tax havenry – is an especially strict form of secrecy, a type of opacity of ownership, and (if the reports of backdating are correct) a class of wealth management professionals some of whom have especially compromised ethics.

You go to Panama, in short, because, despite its profound disadvantages, you value these things.

And the question you should be asking is, what is it about this Mr X or that Mrs Y and his or her financial affairs that causes them to prioritise secrecy or opacity or (if the reports are correct) ethically compromised professionals above all else?”

Let’s imagine for a moment that these are not press releases issued by a spokesman but answers given by the PM in a court of law – how would they be treated?  If I were cross-examining him he would face some pretty strong questions on why he couldn’t have simply answered the questions on day one, day two or day three.  I’d also be attacking him for his past statements on tax-avoidance, particularly where Jimmy Carr, Zac Goldsmith and others are concerned to highlight his hypocrisy.  How would the judge act in summing up the case to the jury?  I’d expect him to have some guidance for the jury about how much faith can be placed upon the answers of a man who has repeatedly tried to dodge the question and has repeatedly given what the jury may consider to be misleading answers before them.

So, over to you ladies and gentlemen of the British public – are you content with a Prime Minister who calls others “morally wrong” but neglects to mention his own, very similar, investments?  Are you content with a Prime Minister who when caught out tries to wriggle out of it and mislead you?  Can you trust such a man to lead you and to take decisions in your best interest rather than in his own?

It’s your decision.


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