David
Cameron's terrible week ends with calls for resignation over Panama
Papers
PM
should have come clean earlier about shares in father’s offshore
investment fund to avoid further damage, MPs say
Rowena Mason
Friday 8 April 2016
18.57 BST
David Cameron was in
Washington rubbing shoulders with world leaders, sun-tanned and
relaxed after a holiday in Lanzarote, when an email revealing what
the Guardian knew about his father’s tax affairs dropped on
Conservative HQ.
From that moment,
the prime minister would have known there was a serious risk of
people finding out about the £30,000 of shares he previously owned
in Ian Cameron’s offshore investment fund.
It would look
terrible to a public already outraged about tax avoidance that a
wealthy young Cameron had chosen to buy shares in Blairmore, the fund
based in Panama and the Bahamas that never paid a penny of tax in
Britain.
This was the point
at which Cameron should have made a clean breast of the facts, Labour
and some of his own Conservative MPs now say.
Leadership challenge
It would have saved
the prime minister the worst week of his professional life, which has
ended with calls for him to resign, a flurry of bets on a leadership
challenge this year and undermined public trust in his premiership.
But faced with a
choice, Downing Street opted for the tactics that have worked so well
for Cameron in previous crises: deflect, dismiss and deny until the
story ebbs away.
The spin doctors
adopted this approach back in 2012, when Guardian journalists first
revealed that Ian Cameron’s wealth had been built offshore. Downing
Street then refused to comment, saying it was a private matter for
the Cameron family. By remaining tight-lipped, the story ended up
disappearing from the headlines within days.
No 10 picked up this
same baton on Monday at the regular briefing for the political press
pack, when the reporters asked his official spokeswoman whether the
prime minister was aware that his father had set up a fund that has
never paid UK tax.
“Most of you seem
to be aware that that story was written in 2012 and we responded at
the time. I don’t have anything to add to that,” she said. The
Guardian pressed further on whether the Cameron family still had any
money invested in the fund: “That is a private matter.” She added
that the government “has taken a range of action to tackle tax
evasion and avoidance and aggressive tax planning”.
But the phrase would
no longer quell the questions. The Guardian broke the story on its
website that evening and led the paper the next day with the
headline: “The hidden deals that helped David Cameron’s father
avoid paying UK tax.”
The other papers
followed the Guardian story, leaving the prime minister facing a dire
set of headlines from across the political spectrum on Tuesday
morning.
Corbyn’s response
The Labour leader,
Jeremy Corbyn, and John McDonnell, the shadow chancellor, had
initially been wary of being seen to attack a fellow politician’s
family background. But by Tuesday morning, it was clear the story was
more about Cameron’s own refusal to answer questions than about his
father. Corbyn told broadcasters that Cameron should explain himself
and suggested Blairmore should be investigated by HMRC along with
other clients of Mossack Fonseca, the law firm at the heart of the
Panama Papers leak.
The timing could not
have been worse for the prime minister, who was due to give a speech
about the EU referendum in Birmingham at PwC – a firm of
accountants once described by MPs as having promoted tax avoidance
“on an industrial scale”.
Under pressure, his
aides had negotiated for Sky News to be the sole media organisation
allowed a question to the prime minister. Meanwhile, all journalists
were required to wear yellow tags to mark them out in the crowd from
PwC employees, who were unlikely to ask anything controversial in
front of their bosses.
The prime minister
had prepped his answer, but the question from Faisal Islam, the Sky
News political editor, was formulated in a tough way: “Can you
clarify for the record that you and your family have not derived any
benefit in the past and will not in the future from the offshore
Blairmore Holdings fund mentioned in the Panama Papers?”
After a little
preamble about HMRC investigating any wrongdoing, Cameron got to the
pre-scripted line about his own finances – answering in the present
tense only.
“In terms of my
own financial affairs, I own no shares. I have a salary as prime
minister and I have some savings, which I get some interest from and
I have a house, which we used to live in, which we now let out while
we are living in Downing Street and that’s all I have. I have no
shares, no offshore trusts, no offshore funds, nothing like that.
And, so that, I think, is a very clear description,” he said.
It was indeed a
clear description of his current financial affairs, but far from so
about the past or future, prompting a fresh round of questions from
media organisations. The Guardian pressed Downing Street again with
questions about whether he had benefited from Blairmore in the past
or could stand to inherit shares in it from his mother, Mary. No 10
sources reacted furiously, attempting once again to draw a line under
the affair with a challenge to Cameron’s critics to “put up or
shut up”.
When the
broadcasters led on the story for the second day in a row, Downing
Street released yet another clarification early on Wednesday: “There
are no offshore trusts or funds from which the prime minister, Mrs
Cameron or their children will benefit in future.”
That only left the
past. Further questions about how Cameron had benefited from
Blairmore went unanswered that evening, as Downing Street went into
lockdown to figure out how best to deal with the persistent crisis.
They had clearly
come up with a new approach by Thursday morning, as the ITV’s
political editor, Robert Peston, was among journalists who headed
down to Exeter in Devon to hear the prime minister speak to students
about the EU referendum. The students gave him a tricky time, with
one of them ribbing him about his “personal experience” of tax
avoidance, and journalists were not allowed free rein to ask him
questions. Cameron had his photograph taken with a pro-EU bus in a
gated area away from most of the press, before sitting down with
Peston for a defiant interview revealing his secret.
There was no apology
from the prime minister as he told ITV that he had owned shares in
Blairmore from 1997 until 2010, just before he became prime minister.
He insisted he was proud of his father’s business, that it had
never been set up to avoid tax, and that it had been a “difficult
few days”.
But the fallout was
immediate, with some Labour MPs suggesting he should resign and the
opposition frontbench demanding he come to parliament to explain
himself. The bookmakers revealed he is odds-on to lose his leadership
before Jeremy Corbyn for the first time. A YouGov survey found just
18% of the public thought he had been open and honest about his tax
affairs, while 56% did not.
Conservative
ministers were sent out on to the airwaves to defend Cameron,
claiming it had been too painful for him to talk about his late
father’s business.
But on the
backbenches, the anger about the handling of the crisis is real,
adding to fury about the unravelling of the budget and the ferocity
of No 10’s determination to win the EU referendum. In public, Tory
MPs have limited themselves to criticising Downing Street advisers
for mishandling the affair, but behind closed doors, they
increasingly express a view that “David is damaged” and are
turning their minds more than ever to political life after Cameron.
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