David Cameron and tax havens: a dodgy day at the office

[malaise]

http://www.theguardian.com/commentisfree/2016/apr/11/the-guardian-view-on-david-cameron-and-tax-havens-a-dodgy-day-at-the-office
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For the second parliamentary week in a row, David Cameron came to the Commons in a genuinely tight political spot over his government’s record on social justice. Just before the Easter recess, Mr Cameron had to calm Tory nerves after the resignation of Iain Duncan Smith had called into question the Conservatives’ commitment to the poor. On Monday, the first day back after the recess, Mr Cameron had to do it all over again, this time over the offshore tax privileges of the super-rich. In terms of immediate political management, the prime minister carried the day among MPs. He is an effective Commons performer and his backbenchers remained behind him. Labour failed in the end to knock him off his stride. But this was a pyrrhic victory. The long-term residue of these events will be both toxic and defining for the prime minister, his party and his government.

Just as he had done in the Duncan Smith fallout, Mr Cameron chose to get on the front foot from the start. He depicted himself as the enemy of tax evasion, a friend of transparency, and as a groundbreaking domestic and international reformer of the offshore havens whose methods have been laid bare in the Panama Papers leak. He cast himself as the truthful son of an honourable tax planning father, though admitting he had been slow to respond to last week’s revelations. He took a few pot shots at his critics and he attempted to draw a line against wholesale tax transparency for MPs on a day when Jeremy Corbyn, George Osborne and Nicola Sturgeon became the latest politicians to publish varying amounts of detail on their tax affairs.

The question of whether MPs should all have to publish their tax returns is a reasonable one. But it is surely a question for another day. The two burning issues exposed by the Panama Papers are the enormity of the world’s lightly taxed or untaxed offshore financial holdings and the stark inequality between a system in which the richest pay so little tax when compared with the strictly enforced rules that govern the honest ordinary majority. To allow the surge of righteous anger about the offshore world and culture to be hijacked by another campaign directed against the political class would be a distraction at a point when the much bigger issues about unfairness are on fire.

The substantive concession to that indignation on Monday was Mr Cameron’s confirmation that most UK crown dependency offshore tax havens – Anguilla and Guernsey have yet to come into line – would now provide beneficial ownership details to tax law enforcement authorities of the funds that are held in these same jurisdictions. This is, as Mr Cameron said, an improvement on the previous situation, in which this was rarely ever done. But it took the SNP’s Angus Robertson to ask the key follow-up question in the Commons after Jeremy Corbyn had failed to do so.