David Cameron admits he profited from father's Panama offshore trust
PM sold stake in Blairmore investment fund, which featured in Panama Papers, for £31,500 four months before entering No 10
David Cameron has finally admitted he benefited from a Panama-based offshore trust set up by his late father.
After three days of stalling and four partial statements issued by Downing Street he confessed that he owned shares in the tax haven fund, which he sold for £31,500 just before becoming prime minister in 2010.
In a specially arranged interview with ITV News’ Robert Peston he confirmed a direct link to his father’s UK-tax avoiding fund, details of which were exposed in the Panama Papers revelations in the Guardian this week.
Admitting it had been “a difficult few days”, the prime minister said he held the shares together with his wife, Samantha, from 1997 and during his time as leader of the opposition. They were sold in January 2010 for a profit of £19,000.
He paid income tax on the dividends but there was no capital gains tax payable and he said he sold up before entering Downing Street “because I didn’t want anyone to say you have other agendas or vested interests”.
But the interview appeared unlikely to end scrutiny of Cameron’s tax affairs.
The Labour MP John Mann, a member of the Treasury select committee, said the prime minister should resign, claiming that Cameron had “covered up and misled”.
Cameron also admitted he did not know whether the £300,000 he inherited from his father had benefited from tax haven status due to part of his estate being based in a unit trust in Jersey.
“I obviously can’t point to the source of every bit of money and dad’s not around for me to ask the questions now,” Cameron said.
It was the fifth explanation in four days from Cameron and his aides about the benefits he and his family had enjoyed from the offshore fund.
Downing Street initially insisted it was a private matter, but Cameron then said he had “no shares, no offshore trusts, no offshore funds”. His spokesman later clarified: “The prime minister, his wife and their children do not benefit from any offshore funds.”
Downing Street then said there were no offshore funds or trusts the family would benefit from in future, leaving questions about the past.
In his first interview on the topic after days of stonewalling, Cameron was questioned on whether there was a conflict of interest between his father setting up the Panama-based Blairmore Investment Trust, which did not have to pay UK tax on its profits, and his professed policy to crack down on aggressive tax avoidance.
“Rules have changed, culture has changed,” he said. “And I welcome that. I want to be as clear as I can about the past, about the present, about the future, because frankly, I don’t have anything to hide.”
Earlier Cameron had refused to take questions from the press while campaigning in Exeter for Britain to stay in the EU. A student managed to address him, saying: “I am very interested in what the collective EU states could do to combat tax avoidance – something you have personal experience of.”
Speaking about his personal wealth, Cameron told Peston: “In all of this I’ve never hidden the fact that I’m a very lucky person who had wealthy parents, who gave me a great upbringing, who paid for me to go to an amazing school. I have never tried to pretend to be anything I am not. But I was keen in 2010 to sell everything – shares, all the rest of it – so I can be very transparent. I don’t own any part of any company or any investment trust or anything else like that.”
He also said it was a misconception that Blairmore had been set up to avoid tax. “It wasn’t,” he said. “It was set up after exchange controls went so that people who wanted to invest in dollar denominated shares and companies could do so.”
Richard Burgon, the shadow Treasury minister, said Cameron’s admission showed a “crisis of morals” at the heart of the Conservative government.
He said: “After four days of refusing to answer this question David Cameron has now finally been forced to admit he directly benefited from Blairmore, a company which paid no tax in 30 years. He must now further clarify whether or not he or his family were benefiting directly or indirectly in 2013 when he was lobbying to prevent EU measures to better regulate trusts as a way to clamp down on tax avoidance.
“David Cameron needs to properly put the record straight in full on this matter and issue a statement to parliament on Monday. We can’t let this crisis of morals at the heart of the Conservative government further undermine public trust in the office of prime minister or the principle that those who govern us should pay their tax like the rest of us.”
The Panama Papers were leaked to the German daily Süddeutsche Zeitung, which shared them with the Washington-based International Consortium of Investigative Journalists, the Guardian, BBC and other media organisations. Four days into the torrent of revelations, regulators stepped up their response.
Twenty banks and financial firms in London have been told to disclose their dealings with Mossack Fonseca to the UK’s Financial Conduct Authorityby Friday next week in a first step that could potentially see wrongdoing punished with heavy fines. It cited the need for financial institutions “to mitigate the risk that they might be used to commit financial crime”.
In Geneva, the Swiss chief prosecutor, Olivier Jornot, said he had launched an undisclosed number of investigations and said his office was paying very close attention to new information as it emerged.
In Brussels, the EU tax commissioner, Pierre Moscovici, threatened “to hit [tax havens] with appropriate sanctions if they refuse to change”.
He added: “The amounts of money, the jurisdictions and the names associated with this affair are frankly shocking. If these leaks reveal that any EU laws have been broken the commission will not hesitate to act.”
The Russian president, Vladimir Putin, dismissed revelations about a network of offshore deals worth $2bn involving members of his close circle, as a conspiracy to undermine Russia.
Responding for the first time he claimed the reports were “one more attempt to destabilise the internal situation [and] make us more accommodating”.
He said, St Petersburg: “Your humble servant was not there [named in the files], but they don’t talk about that. So what did they do? They make an information product – they found acquaintances and friends.”
China, meanwhile, stepped up its efforts to stop its population reading revelations that showed that relatives of three of the seven members of the Communist party’s elite ruling council, including relatives of the president, Xi Jinping, had companies that were clients of Mossack Fonseca.
The Guardian’s coverage of the Panama papers was blocked to internet users not on a special secure network. The Communist party reportedly told news organisations to “self-inspect and delete all content related to the ‘Panama Papers’ leak”.
It was announced that the Argentinian president, Mauricio Macri, was facing an investigation into his financial dealings via two offshore firms that appeared in the files. The federal prosecutor, Federico Delgado, opened an investigation to find out if Macri, who denies wrongdoing, failed to declare assets as required by public officials.
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