Panama Papers become taxing issue for the British PM

For the first time during his short tenure as leader of the Labour Party it would appear as though Jeremy Corbyn has managed to back his opposite number David Cameron up against the ropes. After a flurry of rhetorical blows from Mr Corbyn and a media storm centred on the tax affairs of the Prime Minister’s late father, Mr Cameron was forced to raise his guard and enter into defensive mode yesterday. Amid calls from the Labour leader for the PM to set the record straight and publish his tax returns, Downing Street released a statement saying Cameron, his wife and his children do not benefit from offshore funds. The revelations about the tax affairs of Mr Cameron’s late father Ian were contained in leaked documents from the Panamanian law firm Mossack Fonseca. Yesterday the scandal claimed its first scalp as the Prime Minister of Iceland Sigmundur Gunnlaugsson resigned after it emerged he did not declare his ownership of an offshore company.

Although Number 10 is increasingly exasperated by Mr Corbyn’s verbal assault there is no question of Mr Cameron throwing in the towel. In fact, Downing Street has come out fighting, insisting that the people accusing the PM should “put up or shut up” and pointing to the Government’s record of cracking down on tax evasion and aggressive tax avoidance. Mr Corbyn, who has offered to publish his own tax return, will want to keep attention focused squarely on this issue for as long as possible as it feeds into Labour’s broader narrative about there being one rule for those at the top of society and another for everyone else. However, Mr Corbyn also has another reason for hoping this furore remains in the headlines. With recent polling analysis indicating that Labour is likely to sustain heavy losses at next month’s local elections it is a useful prop for diverting attention away from Labour’s own vulnerabilities. While the contender from the blue corner looks to have been momentarily rocked, many observers would argue that it is the challenger wearing red who is in real trouble. By making it personal and going after Mr Cameron’s late father, Mr Corbyn also risks opening himself up to a counter as the Tories are now likely to view his family as fair game. Both Mr Corbyn’s brother and son have faced accusations in the press of anti-Semitism so it would not be surprising if this was something the Conservatives chose to latch onto.

Chris Warne

Hill & Knowlton Strategies Search