Cameron faces down critics over offshore dealings

11th April 2016, Comments 0 comments

Prime Minister David Cameron defended his tax affairs and announced a deal to open up Britain's overseas tax havens on Monday as he confronted critics of his offshore dealings for the first time in parliament.

Cameron this weekend became the first British leader to publish his tax returns after admitting he held shares in his late father's Bahamas-based investment fund, which he sold before he took office in 2010.

"I didn't want anyone to be able to suggest that as prime minister I had any other agendas or vested interests," he told the House of Commons in his first appearance since the Panama Papers put his finances in the spotlight.

Cameron used his statement to announce a new crackdown on tax avoidance and a new agreement with the British Virgin Islands and other tax havens to share information with British law enforcement and tax authorities.

"There's no doubt that in some of these jurisdictions and countries there are some very bad things happening... and that's why we want our authorities to go through everything they can," the prime minister said.

While not illegal, Cameron's offshore dealings risk undermining his efforts to lead international action against tax evasion, which will see him host an anti-corruption summit in London in May.

Cameron admitted he had not handled well the revelations about his father's Blairmore fund following the leak of documents by Panamanian law firm Mossack Fonseca.

But he rejected the "deeply hurtful and profoundly untrue" suggestion that his father was trying to avoid tax, saying it was a legitimate business to trade in dollar-denominated securities.

And while it was right to "tighten the law and change the culture" to crack down on evasion and aggressive avoidance", Cameron said the government should "defend the right of every British citizen to make money lawfully".

He added: "Aspiration and wealth creation are not somehow dirty words."

- Publishing tax returns -

As he stood at the dispatch box, finance minister George Osborne, London mayor Boris Johnson and opposition Labour leader Jeremy Corbyn also released details of their taxes.

But Cameron rejected calls for all lawmakers to reveal their financial affairs, saying it would be a "very big step".

Currently MPs must only declare shareholdings above £70,000 (87,000 euros, $100,000) on a parliamentary register of interests and do not have to disclose the quantity of some revenues such as rental income.

The prime minister released a tax summary for the past six years and revealed he had received a £200,000 gift from his mother in 2011.

This came after he received £300,000 in his father's will, raising questions over whether the gift was intended to avoid inheritance tax, for which the threshold is £325,000.

Cameron said it was a "natural human instinct" to want to pass on money to your children.

The prime minister and his wife also owned shares his father's fund, which they sold for £31,500.

Labour leader Corbyn accused Cameron of failing to appreciate the public anger over the "scandal of destructive global tax avoidance" revealed by the leak.

"What they have driven home is what many people have increasingly felt -- there is now one rule for the super-rich and another for the rest," he said.

- Clampdown on tax havens -

Cameron announced that Britain's overseas territories had agreed to provide law and tax agencies with full access to information on who owned and benefited from companies.

The agreement, which includes the Cayman Islands, British Virgin Islands, Bermuda, Isle of Man and Jersey, although not Guernsey and Anguilla, appears to have been struck in the past few days.

But the Oxfam charity said Cameron "needs to do better than this".

Unless the registry is public "it will be impossible for wider society -- especially people in the world's poorest countries -- to hold businesses and governments to account," it added.

Cameron also announced that legislation to make companies criminally responsible if they fail to stop staff facilitating tax evasion would come into force this year.

The plans, first mooted last year, have been criticised by lawyers and accountants who warn they could criminalise firms who unwittingly break the rules, and could put Britain's financial sector at a disadvantage.

In addition, Cameron said a new taskforce would analyse the Panama Papers "and take rapid action".


© 2016 AFP

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