Panama Papers: PM Cameron under pressure over father's offshore fund

Britain's Prime Minister David Cameron speaks during a question and answer session on the forthcoming European Union referendum with staff of PricewaterhouseCoopers in Birmingham, central England. (Christopher Furlong/POOL/AFP)

LONDON: British Prime Minister David Cameron said on Tuesday (Apr 5) he had no personal offshore funds as he faced growing pressure over the so-called Panama Papers, which raised questions about his family's financial affairs.

A massive leak of documents from Panamanian law firm Mossack Fonseca revealed how an investment fund co-founded by the premier's late father, Ian Cameron, avoided paying taxes in Britain for 30 years by basing itself in the Bahamas.

Faced with calls by the opposition Labour Party for an investigation into all those implicated in the leak, including his family, Cameron said his wealth consisted of his salary, some savings and a house. "I own no shares, no offshore trusts, no offshore funds, nothing like that," Cameron said.

Downing Street had previously insisted that any offshore holdings by members of his family were a "private matter". However, it issued a statement on Tuesday stating: "To be clear, the prime minister, his wife and their children do not benefit from any offshore funds."

The revelations about his father are embarrassing for Cameron, who has sought to lead international efforts to improve financial transparency and whose government hosts an anti-corruption summit next month.

He insisted that "no prime minister has done more" to tackle tax evasion and aggressive tax avoidance, and said British authorities would look into the Panama leaks.

However, campaigners called for more action to tackle secretive company ownership in British overseas territories such as the Cayman Islands and the British Virgin Islands. Labour leader Jeremy Corbyn raised the prospect of Britain taking full control of the territories if they did not act.

PURSUING TAX EVADERS

Ian Cameron helped found Blairmore Holdings Inc in the Bahamas in the early 1980s and was reportedly one of five UK-based directors until shortly before his death in 2010.

His offshore activities were already in the public domain but the leaked documents revealed that the investment fund hired local residents - including a part-time bishop - to sign its paperwork to avoid paying tax in Britain.

"In 30 years, Blairmore has never paid a penny of tax in the UK on its profits," said The Guardian newspaper, which has seen the leaked documents, along with the BBC.

There is no suggestion that the fund acted illegally or that the family did not pay tax on any repatriated assets. But Corbyn called for an independent investigation and said: "I think the prime minister, in his own interest, ought to tell us exactly what's been going on."

He demanded the government "stop pussyfooting around on tax dodging", saying: "There cannot be one set of tax rules for the wealthy elite and another for the rest of us."

Cameron's government has recovered £2 billion (US$2.83 billion) from offshore tax evaders since 2010 and introduced a range of measures to clamp down on evasion, officials said.

The prime minister also said Britain had "led the world" by introducing legislation forcing its companies to disclose who owns and benefits from their activities, which comes into effect in June.

DIRECT RULE OPTION

The leak of 11.5 million confidential documents from Mossack Fonseca, which specialises in creating offshore shell companies, shone the spotlight on tax havens as well as wealthy individuals.

Among them is the British Virgin Islands, a tiny British overseas territory in the Caribbean which is among the top five investors in Russia and China, according to a 2014 report by the Organisation for Economic Co-operation and Development.

Cameron said Britain had made "huge progress" in pressing its overseas territories and crown dependencies to share tax information and make it harder for companies and individuals to hide their financial affairs.

But it has yet to persuade them to sign up to the company ownership law, and Corbyn said the government should consider imposing direct rule on overseas territories to resolve the issue.

"If they've become a place for systemic evasion and short-changing of the public in this country, then something has to be done about it," he told the BBC.