By Daniel Margrain
David Cameron’s speech to the House of Commons yesterday afternoon (April 11) was clearly intended to draw a line under the Panama Papers scandal. The Public will keep this in mind when the Tory government remind us all about “belt tightening”, “austerity” and “we’re all in this together”. The government has 92 special advisers on its books whose combined wages costs us, the British taxpayer’s, a massive £8.4 million a year, one of whom we learned this past week is paid £53,000 to “advise” Cameron’s wife about her choice of wardrobe. Maybe the British public should insist these “special advisers” run the country and cut out the middle man?
Cameron was pulled into the Panama Papers debacle last Monday (April 4) after details of Ian Cameron’s (the PMs deceased father’s) dealings featured in the first batch of documents from law firm Mossack Fonseca. This is a problem for David Cameron because he had previously made statements condemning tax reduction schemes by saying they were “wrong”, which is a word he frequently uses to describe problems he appears to have no intention of ever addressing. In 2012 he said “tax avoidance is morally wrong.” Last Monday (April 4) he again stated that those who attempt to hide their money from the UK tax authorities were “wrong”. However, when the tax affairs of his own family were brought into the media spotlight, he appeared to change his tune by claiming that such affairs were “a private matter”.
The next day (Tuesday, April 5) he said:
“In terms of my own financial affairs, I own no shares..I have a salary as a Prime Minister, and I have some savings which I get some interest from and I have a house which we used to live which we now let out while we are living in Downing Street and that’s all I have.”
The British public were supposed to be impressed with this outward selfless expression of personal “frugality”. He continued, “I have had no shares, no offshore trusts, no offshore funds, nothing like that. So I think that’s a very clear description”. This was obviously part of a carefully prepared and scripted speech by his “special adviser’s” that sounded like a hundred lawyers had poured over it into the early hours to ensure its absolute accuracy to the last syllable. Cameron’s statement, in other words, might of been accurate but it wasn’t necessarily clear.
By Tuesday afternoon, Number 10 had sent out another clarification – a clarification of their previous clarification. This third clarification said, “To be clear, the Prime Minister, his wife and their children do not benefit from any offshore funds. The Prime Minister owns no shares.” It then went on to say, “It’s time for people to either put up or shut up in relation to questioning Cameron’s tax affairs.” (adding the word “peasants” to the end of the sentence would not have sounded out of place).
However, it’s clear the people won’t shut up. Cameron will discover that his attempts to draw a metaphorical line in the sand in relation to this ongoing scandal won’t be heeded in quite the way that he and his advisers would like. They have totally underestimated the public mood and the extent to which the British people recognize that a week of Cameron’s shenanigans represents merely the end of the beginning as opposed to the beginning of the end. The public are only now warming up for the long haul as Cameron tries his best to put his role in the scandal to bed.
Meanwhile, on Wednesday (April 6), there was a fourth clarification which stated that “there are no offshore funds or trusts which the Prime Minister, Mrs Cameron or their children will benefit from in future.” Crucially, Cameron’s lawyers and advisers had thus changed the tense. On Thursday (April 7) afternoon, there was a fifth clarification: Cameron maintained that he had nothing to hide. He revealed for the first time that both he and his wife had sold interests worth more than £30,000 in Blairmore which uses bearer shares to protect the privacy of investors’. As with money, whoever bears bearer shares owns them but they are much more portable in that they can be moved around without any paper trail. Consequently, due to the criminal implications associated with them, they have been banned in the UK. Ironically it was the tax swindler, Cameron, who banned them.
Blairmore used more than £30,000 worth of bearer shares to protect the privacy of the Cameron family’s offshore activities. David Cameron insisted that he didn’t personally benefit from any funds from his fathers tax efficient holdings other than the £30,000 described. This is clearly nonsense. As the political satirist Mark Steel in brilliantly comic fashion highlighted, this presupposes that a young David Cameron would have paid for his elite privately funded education at Eton using money he had earned himself after having saved up while undertaking a paper round.
When interviewed by ITVs inscrutable Robert Peston, who sounds like he eats a vowel and pickle sandwich every day for lunch, Cameron said that his father had left him £300,000 and that he couldn’t reveal the source of every bit of the money because his Dad was no longer around to answer any questions about it. Peston asked Cameron how he could of been certain that some of the £300,000 didn’t come from offshore sources. The answer the PM gave was that he and his advisers couldn’t be certain. This, in other words, is code for the money did indeed come from offshore sources. So unless Cameron spent the £300,000 on sweets and comics, then he is currently benefiting from offshore funds.
Let’s make a fairly safe bet and assume that he spent the £300,000 on a relatively secure investment such as property. A decade ago, a £300,000 deposit would have landed a huge investment – particularly in London – in a comfortable family home. The point being, unless Cameron blew the money, on say, cocaine and hookers or otherwise spent it unwisely (which is extremely unlikely), it’s ludicrous to suggest that he will not be benefiting from offshore funds in either the present or the future. It should be remembered that about 15 years ago Cameron bought a house with a mortgage in Oxfordshire with financial help from his father. We, the public, also helped out Cameron by paying the interest on that mortgage for the remainder of what the house cost.
The Cameron family still owns it and its value has increased to over £1 million. It will continue to increase in the foreseeable future. So too will the £300,000 worth of assets from his father increase in value. This £300,000, remember, is a sum Cameron claims neither he, his wife or children have benefited from. So contrary to the assertions of Cameron and his advisers, the notion that he is not benefiting, and will not benefit from, his fathers business in future is also an obvious nonsense. In addition to all this, he owns a second home in Ladbroke Grove in London worth £3.5 million and rising.
It’s inconceivable that Cameron would of been unaware of his father’s financial dealings in Blairmore given that he was himself involved in the Blairmore fund for 14 years (1996-2010). Secondly, the notion that he was somehow oblivious to the fact that Blairmore boasted that it was able to avoid UK tax or, thirdly, that the MPs Code of Conduct compels MPs to declare a financial interest to fellow MPs prior to participating in House of Commons business, are also too far fetched to garner any credibility.
As far as the political and media establishment are concerned, the revelation that Cameron was implicated in the Panama Papers scandal comes down to a question of PR/media mismanagement, as opposed to recognizing that his actions are immoral and, if the law was applied equally, illegal enough to warrant a prison sentence. Let me be clear about this: The super rich elites like Cameron who avoid or evade their taxes, live in the society that the rest of us who do pay our taxes are also a part of. They do not exist as a separate hermetically sealed entity isolated from the rest of humanity.
So they need to be compelled by law to pay their fair share of taxes in order that we are all able to maximize the revenues that accrue for the greatest possible utility. Failing to participate in UK society while presuming to tell the rest of us how it should be run, is incompatible with democracy. What the super rich clearly regard as their inalienable right not to pay tax, is indicative of the fact that 78 per cent of MPs are millionaires compared to just 0.7 per cent of the British population in general. Unfortunately, therefore, democracy has become a by-word for a self-serving system in which MPs effectively represent themselves and the interests of the wealthy.
This explains why the government places a greater emphasis on tackling benefit fraud which represents a relatively tiny proportion of revenue loss compared to the resources that goes into tackling tax evasion and avoidance of the one per cent of the super rich. It might also explain why HMRC chief Edward Troup was a partner at the law firm that acted for Cameron’s offshore fund. What is certain is that these kinds of cozy relationships and practices are contributing to an astounding rate of inequality in which 62 people currently own the same wealth as 3.6 billion people – 50 per cent of the world’s total population.
In terms of Britain, the end result is that tax evasion and avoidance costs the UK treasury a massive £95 billion a year which is enough to fund the entire NHS in England. The surreal irony, in light of all these shenanigans, is that during last Saturday’s London demonstration, tax payer funded police were seen outside Downing Street lining up to protect the one per cent of super rich tax dodgers from the 99 per cent of tax payers.
Another piece of surreal theatre was illustrated by the fact that the demonstration in London last Saturday was barely reported by the BBC but – in the name of impartiality – the demo outside the Iceland parliament received widespread coverage. Despite the efforts of the chattering corporate media class, their counterparts within both the Tory government and the Blairites of Labour’s PLP, this is a scandal that the public will ensure will not go away any time soon.