David Cameron offered a passionate defence of his family’s tax affairs and his government’s anti-corruption record as he battled to draw a line under the offshore controversy that has dominated his premiership over the past week.
The prime minister went head to head in the Commons on Monday with Jeremy Corbyn, the Labour leader, who said Cameron still had questions to answer following the leak of the Panama Papers. He asked the prime minster for more details about the £72,000 in shares Cameron sold in 2010 and why he lobbied the EU to keep offshore trusts out of transparency plans.
Cameron accused critics of his financial affairs of traducing the memory of his “hardworking and wonderful dad,” Ian Cameron, who he insisted had done nothing wrong when he set up offshore fund Blairmore Holdings in the early 1980s.
“There have been some deeply hurtful and profoundly untrue allegations made against my father and I want to put the record straight,” said Cameron, in a statement to parliament following the Easter break. “This investment fund was set up overseas 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.”
Responding, Corbyn accused the prime minister of not doing enough to control UK overseas territories, which are often at the centre of offshore share ownership. “It is a scandal that UK overseas territories registered over half the shell companies set up by Mossack Fonseca,” said Corbyn, praising the reporting of the Panama Papers. “The truth is that the UK is at the heart of the global tax avoidance industry and that national scandal must end.”
Cameron said plans for a central register of company beneficiaries in offshore territories had now been agreed, including in the British Virgin Islands and Cayman Islands, but he conceded that the information would only be available to tax authorities and not the public.
It followed a week in which Cameron came under intense pressure after he and Downing street advisers provided a series of differing responses to journalists over his links to Blairmore, before finally admitting that he had benefited from shares in the fund, which he sold for £31,000 in 2010.
The prime minister added that there were thousands of similar funds in which millions of people, big businesses, trade unions and media organisations, including the Guardian, legitimately invested.
“This is an entirely standard practice and it is not to avoid tax,” he said, arguing that while it was right to outlaw “tax evasion and discourage aggressive tax avoidance,” it was important to differentiate between schemes that artificially reduced tax and those that encouraged investment.
“This is a government and this should be a country that believes in aspiration and wealth creation, so we should defend the right of every British citizen to make money lawfully,” he added, in front of a Conservative party that appeared the most united since the start of the EU referendum campaign.
The prime minister also insisted that it was right for parents to be able to provide valuable gifts to their children while they remain alive so as not to pay inheritance tax, after his own tax return showed two £100,000 payments from his mother, Mary.
In the Commons, Cameron faced questions over the £72,000 raised from the sale of shares and why he offloaded the Blairmore shares at a different time to the rest. Corbyn asked: “Can he clarify to the house and the public whether, when he sold his stake in Blairmore Holdings in 2010, he also disposed of other offshore investments at that time? In particular, whether any of the £72,000 of shares he sold that year were held in offshore tax havens.”
Cameron said he had handed over information about the remaining shares to the Commons standards commissioner, Kathryn Hudson, but aides said they would not be providing a list of companies to journalists.
The scandal surrounding the Panama Papers and Cameron’s personal financial affairs has led him and other leading politicians to publish tax returns and summaries. George Osborne published a tax summary showing that he made almost £200,000 from his salary, rental income and dividends from his family’s wallpaper business last year, putting him in the top rate of tax with a bill of £72,210.
Cameron said his decision to release his tax returns was unprecedented but insisted that it was not right for other MPs to follow suit, leading to cheers among Conservative politicians.
The Labour MP Dennis Skinner heated up the debate when he was thrown out of the Commons for refusing to withdraw his description of the prime minister as “dodgy Dave”.
The Scottish National party said Cameron’s response was insufficient. Angus Robertson, the SNP’s Westminster leader, told the prime minister that people were indignant. “People are rightly angered by the different rules for normal taxpayers and a small, ultra-rich elite,” he said.
“But we must ask ourselves whether the scale of the problem has been taken seriously, because quite patently it has not been thus far domestically and internationally. The UK bears a particular responsibility, given that the UK and its overseas territories collectively sit at the top of the financial secrecy index of the Tax Justice Network.”
One senior Conservative suggested that Cameron might have himself to blame for the controversy, for trying to make ethical judgments regarding tax by repeatedly talking about “aggressive tax avoidance,” which is hard to define.
Andrew Tyrie, the chair of the Treasury select committee, said he felt that the prime minister had done nothing wrong except to describe the comedian Jimmy Carr’s decision to place money in a tax avoidance scheme as “morally wrong”.
Cameron replied: “To be fair to Jimmy Carr, as soon as it was pointed out that he was in a scheme to artificially reduce his income, he immediately changed his arrangements. He made that very clear and I pay tribute to him for doing that.”
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