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8 April 2016updated 09 Sep 2021 1:14pm

How significant are David Cameron’s offshore shares?

Six thoughts on the Prime Minister's admission he held shares in his father's fund.

By Henry Zeffman Henry Zeffman

This is undoubtedly deeply embarrassing for Cameron…

The Prime Minister’s admission yesterday evening that he had held shares in his father’s Panama-registered fund, Blairmore, is without question a big deal. And, because of Number 10’s poor media management since the so-called ‘Panama Papers’ emerged on Sunday night, it is an even bigger deal than it otherwise might have been.

Rather than having his spokesperson initially insist his financial arrangements are a ‘private matter’, the Prime Minister should have said early on Monday what he said last night: that he held shares in his father’s offshore fund until 2010, paying full income tax on the dividends, and then sold them. Instead, the quintet of statements, each one just a little less opaque than the last, made the Prime Minister look not only like he had something to hide, but that he felt entitled to hide it too.

What is particularly peculiar about this behaviour is that shareholders in the Blairmore fund did not actually personally avoid tax. On the evidence available so far, this is probably not quite an example of the “aggressive tax avoidance” that George Osborne described in his 2012 Budget speech as “morally repugnant” – though to many the use of an offshore fund is enough to make it wrong.

But throughout the week the Prime Minister has fomented the perception that he benefitted from tax avoidance. It’s that perception which will linger. 

…but it may only entrench existing attitudes

The really interesting polling data in the coming days will not be about how the country perceives tax avoidance – we know that it disapproves – but whether people are surprised that David Cameron was involved with a fund that minimised its tax liabilities. As Labour has found at almost every election it has contested since its humiliation in Crewe and Nantwich in 2008, it is not enough to point at an Eton-educated Tory and shout ‘Toff’ at the top of your voice.

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Voters have been aware of David Cameron’s privileged background since he became Leader of the Opposition over a decade ago: those who voted for him either don’t care or they do care but they care about other factors more. It will be interesting to have a sense of whether tax avoidance is already ‘priced in’ to that calculus – that is, whether it entrenches opposition amongst those already opposed to Cameron, while failing to surprise or irk those who support him and the Conservatives. It’s possible that some Conservative supporters are surprised and disappointed and withdraw their support; it’s also possible that many are disappointed but not surprised and care more about the deficit anyway.

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Cameron was already finished regardless

A remarkable number of people who follow the twists and turns of politics seem to forget one of the very few facts of which we can be absolutely sure: David Cameron is not standing for another term as Prime Minister. Even if Cameron proves to be profoundly weakened by this row, the next general election will be a verdict on a different Conservative Prime Minister, with different skeletons. And the Labour leader who she or he goes up against will probably still be a man who has shared platforms with the IRA and a series of anti-semites. Even if the stench of tax avoidance contaminates Cameron’s successor, it will be far from the most controversial issue in the 2020 election.

This row may smooth the path to Brexit

However hard Alan Johnson and other Labour politicians may try, David Cameron is and always will be the figurehead of the Remain campaign. This means that two simple statements are true: the more popular David Cameron becomes, the more likely a Remain victory becomes; the more unpopular David Cameron becomes, the more likely a Leave victory becomes.

With Jeremy Corbyn showing little enthusiasm so far for rallying left-wing voters to the pro-EU cause, it matters even more if Labour supporters and sympathisers wavering over how to vote in the referendum find the tax affairs of the main proponent of a Remain vote morally contemptible.

If Labour can’t prosper in these circumstances then the party is in serious trouble

In a month there are elections in London, Scotland and Wales, plus 125 councils and 40 police and crime commissioners.  Each of the different contests, especially those to the devolved assemblies, have their own unique complexities, but they also all play out against a national backdrop.

The Cabinet, the Conservative parliamentary party and the party grassroots are all split over Europe. The Prime Minister’s moral integrity is being questioned. The Chancellor’s budget was a disaster. The Work and Pensions secretary resigned after accusing the government of putting politics before the national interest. This is probably as messy as it could have got just a year after Cameron won his unexpected majority. Labour ought to be capable of capitalising.

British politics is remarkably clean

For all its significance, this row is about the legal use of an offshore fund. In other countries, the Panama Papers suggest far worse: the systematic enrichment of individuals close to corrupt rulers. David Cameron deserves all the scrutiny he gets, but we have it pretty good.