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11th Jul 2020

Cameron admits to making profit from Panama trust

  • Cameron said he paid all taxes due and sold off his shares to avoid speculation of wrongdoing (Photo: European Parliament)

British prime minister David Cameron has admitted that he made a profit from an offshore entity exposed by Panama Papers, prompting some opposition MPs to call for his resignation.

He disclosed the information in an interview with the ITV broadcaster on Thursday (7 April), saying that he and his wife, Samantha, had held 5,000 shares in Blairmore, a Panama-based entity created by his late father.

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  • Ukip leader Farage, who also had an offshore trust, kept quiet on Thursday (Photo: European Parliament)

He said they sold the stake for £31,500 in 2010, shortly before he took up office, at a profit of £19,500.

But he said that the income “was subject to full UK taxation.”

He said that Blairmore, which was not subject to tax in the UK, wasn’t created in order to cheat the British treasury. “It was set up after exchange controls went so that people who wanted to invest in dollar-denominated companies could do so,” he said.

“Rules have changed, culture has changed,” he said.

He also told ITV that his father left him £300,000. “I obviously can’t point to the source of every bit of [that] money and dad’s not around for me to ask the questions now,” he said.

“I’ve never hidden the fact that I’m a very lucky person who had wealthy parents ... but I was keen in 2010 to sell everything - shares, all the rest of it - so I can be very transparent,” he said.

U-turn

The ITV interview marked a U-turn in Cameron’s PR strategy.

The PM and his office had earlier declined to answer questions on what they called a “private matter,” which first came out in the Panama Papers leak last Sunday.

He told ITV the past few days had been “difficult.”

They were made harder by a related revelation that Cameron, in 2013, personally wrote to the then head of the EU Council, Herman Van Rompuy, to try to quash EU proposals for greater transparency on offshore trusts.

Opposition MPs from the centre-left Labour Party went on the attack following the ITV broadcast.

Two of them - John Mann and Tom Watson - called on Cameron to resign. Richard Burgon, Labour’s shadow treasury minister, said Cameron should “put the record straight” in 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,” he said.

Pro-Brexit campaigners have also tried to score points.

The VoteLeave campaign group said on Wednesday that Cameron timed the publication of a pro-EU leaflet in order to distract from the Blairmore story, in what a government spokesperson dismissed as “absolute nonsense.”

Farage

But Nigel Farage, the outspoken leader of the pro-Brexit UK Independence Party, kept quiet on Thursday.

The British tabloid, the Daily Mirror, in 2013 reported that he had also had a Blairmore-type entity in the Isle of Man, a British tax haven.

Farage at the time said the entity, called Farage Family Educational Trust 1654, had nothing to do with tax dodging and that it had been created at a time of lower sensitivity on the issue.

“It's a vehicle that you chuck things in through your life that you don't need and you build up a trust fund for your children or grandchildren … It was called an educational trust and could have been used for grandchildren's schools fees, things like that,” he said.

“The world has changed. Things that we thought were absolutely fair practice 10 years, 20 years ago, 30 years ago aren't any more,” he said.

Panama repercussions

Commenting on the Panama leaks in Brussels on Thursday, Pierre Moscovici, the French EU commissioner for tax, said: “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 [European] commission will not hesitate to act.”

The Panama leaks have already cost the Iceland PM his job.

The Maltese opposition on Thursday also tabled a motion of no confidence in the government after it emerged that the energy minister and the prime minister’s chief of staff tried to open offshore bank accounts.

The debate is expected next week. A popular show of anger is also due in street protests in Valletta on Sunday.

The Panama Papers information is based on 11.5 million leaked files from the Panama-based law firm Mossack Fonseca.

The files were given to German daily Sueddeutsche Zeitung last year and shared with the International Consortium of Investigative Journalists in Washington.

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