Panama Papers fallout dangerously expose David Cameron

David Cameron was left dangerously exposed on Tuesday after repeatedly failing to provide a clear and full account about links to an offshore fund set up by his late father, as the storm over the Panama Papers gathered strength in both the UK and elsewhere around the world.

The prime minister and his office have now offered three partial answers about the fund set up by his father Ian, which avoided ever paying tax in Britain. The key unanswered question is whether the prime minister’s family stands to gain in the future from his father’s company, Blairmore, an investment fund run from the Bahamas.

After Downing Street said on Monday that the fund was a “private matter”, a journalist asked Cameron about it during a visit to Birmingham on Tuesday.

Cameron replied: “I own no shares, no offshore trusts, no offshore funds, nothing like that. And, so that, I think, is a very clear description.”

He dodged the key part of the question about whether he or his family stood to benefit.

Having failed to satisfy reporters, Downing Street issued a further statement that Cameron’s wife and children also do not benefit from offshore funds but again left the main question about the future unanswered.

The Labour leader, Jeremy Corbyn, who had called earlier in the day for an independent investigation, told the Guardian: “Three times Downing Street has been asked to provide a full and comprehensive answer. The public has a right to know the truth.

“We need to know the full extent of the links between Britain and the web of tax avoidance and evasion revealed by the Panama Papers at all levels.”

The leak of 11.5m files from the Panama-based Mossack Fonseca continued to create uproar and upheaval around the world. The documents were leaked to the German daily Süddeutsche Zeitung, which shared them with the Washington-based International Consortium of Investigative Journalists, the Guardian, the BBC and other media organisations.

The row embroiling Cameron picked up pace on Tuesday morning when Corbyn responded to Downing Street’s assertion that the matter was private by telling reporters: “Well, it’s a private matter insofar as it’s a privately-held interest. But it’s not a private matter if tax is not being paid. So an investigation must take place, an independent investigation, unprejudiced, to decide whether or not tax has been paid.”
Later in the day, Cameron told reporters: “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.”

Downing Street returned to the issue later. A No 10 spokesperson 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.

“As has been previously reported, Mrs Cameron owns a small number of shares connected to her father’s land, which she declares on her tax return.”

Downing Street also attempted to shift the argument back to Labour. A source called on people “suggesting that Mr Cameron and his family are benefiting from off shore trusts” to come forward with evidence. “The onus is on them to put up or shut up. The prime minister has put out a very clear statement.”

As well as pressing Cameron, Corbyn called for a cleanup of Britain’s overseas territories and dependencies, such as the British Virgin Islands, which accounts for about half the companies named in the Panama Papers, the Cayman Islands and Anguilla.

He said the government should consider imposing direct rule on British overseas territories and crown dependencies, which lie at the heart of the allegations.

The government had already scheduled a meeting of G7 countries in London on 12 May to discuss the overseas territories and crown dependencies Tax campaigners, however, said that government officials had been downplaying expectations for months, telling them that tax would not be high on the agenda and that instead the main item would be corruption, such as the low-level bribery of officials.

The shadow leader of the Commons, Chris Bryant, who was responsible for overseas territories and dependencies when Labour was in power and was involved in a standoff with them over transparency, said: “There is a great deal of power the government has if it chooses to exercise it, even without the nuclear option of direct rule.”

He said he had pressed them to be more transparent and tried to put pressure on them by refusing to authorise loans, but the standoff ended when the Conservatives took power.

The City regulator, the Financial Conduct Authority, also responded to the Panama Papers. It said: “The FCA has written to a number of firms about this issue, including those on our systematic anti-money laundering programme, and we are working closely with a number of other agencies who are also looking at this.

“As part of our responsibility to ensure the integrity of the UK financial markets, we require all authorised firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime. We have also today published our annual business plan which identifies financial crime and anti-money laundering activity as one of our priorities for the year.”

In the US, Obama addressed reporters at the White House, making the highest profile intervention yet in favour of the global reform of tax avoidance.

“There is no doubt that the problem of global tax avoidance generally is a huge problem. The problem is that a lot of this stuff is legal, not illegal,” he said.

The US president said the leak from Panama illustrated the scale of tax avoidance involving Fortune 500 companies, running into trillions of dollars worldwide.

“We shouldn’t make it legal to engage in transactions just to avoid taxes,” he said, praising instead “the basic principle of making sure everyone pays their fair share”.

Only about 200 US citizens have been identified so far in the leaked data, but the US justice department, which aggressively pursues cases both domestically but internationally, issued a statement saying it “takes very seriously all credible allegations of high level, foreign corruption that might have a link to the United States or the US financial system”.

The Guardian .