David Cameron is facing mounting pressure to be fully transparent about his previous finances after finally admitting he benefited from a Panama-based offshore company set up by his late father.
After three days of stalling and four partial statements issued by Downing Street, on Thursday night the prime minister confessed that he owned shares in a tax haven fund, which he sold for £31,500 just before he became prime minister in 2010.
Owen Smith, the shadow work and pensions secretary, said Cameron still had questions to answer. Speaking on BBC Radio 4’s Today programme, Smith said: “Why didn’t he register his interest in this offshore back in 2005 when he first became an MP?
“He [Cameron] says he’s going to publish his tax return. I think he will need to go further and be clear about what his investments have been in the past.”
In one of the biggest leaks in modern history, a team of International Consortium of Investigative Journalists (ICIJ) and certain media outlets have published a huge stash of secret documents of a Panama law firm Mossack Fonseca, revealing the names of clients with undisclosed offshore holdings. The Panama Papers, as the documents are being called, contain over 11 million documents that implicate several powerful people from around the world, some of whom are…
The pressure on Cameron piled up after he told ITV News about a direct link to his father’s tax-avoiding fund in a specially arranged interview on Thursday evening.
Admitting it had been “a difficult few days”, the prime minister said he held the shares together with his wife, Samantha, from 1997 and during his time as leader of the opposition. They were sold in January 2010 for a profit of £19,000.
He paid income tax on the dividends but there was no capital gains tax payable and he said he sold up before entering Downing Street “because I didn’t want anyone to say you have other agendas or vested interests”.
Cameron also admitted he did not know whether the £300,000 he inherited from his father had benefited from tax haven status due to part of his estate being based in a unit trust in Jersey.
“I obviously can’t point to the source of every bit of money and dad’s not around for me to ask the questions now,” Cameron said.
It was the fifth explanation in four days from Cameron and his aides about the benefits he and his family had enjoyed from the offshore fund.
Smith said the issue raised doubts about the prime minister’s trustworthiness. “On the one hand he’s been exulting everyone to not avoid tax … and on the other hand he has benefit from a investment vehicle that is essentially a tax avoidance vehicle,” he said.
“People will now have doubts about the trustworthiness of our prime minister given that he has been so revealed as having double standards.”
He added: “Is it effectively one rule for the rich, and the rich who run the Tory party, and another rule for the rest of us? These are people who came to power arguing ‘we are all in it together’. And clearly that is not true and this episode reveals that in stark detail.”
‘Pay back the money’
Labour’s deputy leader, Tom Watson, called on Cameron to pay back money that “morally belong[s] to the exchequer”. He also urged Cameron to be “very clear about what other vehicles and investments he has had as a MP”.
Speaking on BBC Newsnight on Thursday, Watson asked: “Did he dispose of any other shareholdings in advance of 2010, has he used any other vehicles as a way of generating income and any offshore accounts that we don’t know about yet?”
He added: “He’s made judgments on people as a prime minister for doing exactly what he used to do, and I don’t think it’s a good look for a prime minister to use the line ‘do as a I say not as I do’. The avoidance of journalistic questions in the last three days just means there are going to be more questions about what his financial arrangements were both as leader of the opposition and as an MP.”
After the prime minister’s admission of a direct link to his late father’s UK-tax-avoiding fund, bookmakers PaddyPower shortened the odds on him resigning from 20/1 to 11/2.
Watson said: “It may be a resignation issue, but we don’t have the facts.”
He added: “We certainly need to know what other investments David Cameron had when he was leader of the opposition lecturing the country on tax reform.
“Had he given a straight answer three days ago I think he would be in a much better position. As it happens, he has now aroused all our curiosity and it makes you think if he has had to admit this tonight what other shareholdings may he have had and I think he needs to clean that up tomorrow.”
In a statement, Watson added: “The time has come for David Cameron to put the record straight rather than having details dragged from him in instalments – that is the absolute minimum … In the meantime, I’m sure the prime minister will be considering voluntarily paying the money that, in his own words, should morally belong to the exchequer.”
Other Labour MPs asked whether other ministers, including the chancellor, George Osborne, had benefited from off-shore companies.
Skills minister Nick Boles defended Cameron’s initial evasive answers about disclosures in the Panama Papers. “I think it was a natural human reaction to not want to intrude further on his father’s memory,” he told Today.
But he added: “I’m sure with the benefit of hindsight he would rather that all of what has come out over the last four days had come out on the first day.
“Taxation is a private matter in this country … So I think he thought ‘I know I’ve compiled fully with all of the tax laws and I don’t like feeding this mill of preying on his father’s memory’. And his father is not here to defend himself.” Boles insisted the disclosures had not damaged the prime minister’s reputation.
“People are fair-minded. They will want to see did he pay all the tax that he should have paid. And he did. Did he break any laws? He didn’t … We all have natural human instincts to rally around our family … I think people will be forgiving.”