By Geoffrey Smith
April 5, 2016

The ‘Panama Papers’ are already generating more heat than light, at least in the U.K.

This was to be expected, given that Prime Minister David Cameron is one of the world leaders almost, but not quite, explicitly fingered by the revelations of four decades’ worth of business done by the Panamanian law firm Mossack Fonseca.

Cameron was forced into an awkward defense of his family’s tax affairs on Tuesday after the revelations reheated information (already partially available) that his father Ian, a stockbroker, had run the “Blairmore” trust in the Bahamas that had paid no taxes in the U.K. for 30 years. A Blairmore (named after the family’s sprawling estate in Scotland) prospectus from 2006 states that, “The directors intend that the affairs of the fund should be managed and conducted so that it does not become resident in the UK for UK taxation purposes. Accordingly … the fund will not be subject to UK corporation tax or income tax on its profits,” according to The Times. The trust relocated to Ireland in 2012.

Blairmore was initially set up for Cameron Sr.’s clients, but is believed to have also administered some of his own funds. That has prompted speculation that the prime minister may still have undeclared assets offshore. For years, Downing Street refused to comment on the speculation, saying that the family’s tax affairs were “a private matter,” but Cameron changed tack on Tuesday, telling a public audience that:

I own no shares. I have a salary as Prime Minister and I have some savings which I get some interest from and I have a house which we used to live in which we now let out while living in Downing Street. And that’s all I have. I have no shares, no offshore trusts, no offshore funds, nothing like that.

The issue is particularly sensitive for Cameron, who has consistently talked up his leadership of efforts at the G-8 to crack down on offshore tax havens. Cameron, a descendant of King William IV (the one who came before Victoria), is an easily caricatured upper-class graduate of Eton and Oxford University, and he has been frequently mocked for the slogan “We’re all in this together” that accompanied the austerity he imposed in his first term in office. Such news tends to encourage the belief that some of us might not be in it quite as deeply as others (especially if thousands of British steelworkers are on the verge of losing their jobs at the same time).

The Panama Papers scandal is highlighting how little Cameron’s G8 campaign has achieved, even in the U.K.’s remaining overseas dominions and territories: the British Virgin Islands, Bermuda, and the Cayman Islands all figure prominently in Mossack Fonseca’s cache.

Cameron does have some things going for him, though. For one thing, the liberal media’s outrage is relatively muted: after all, the material is largely historical and the Panama Papers don’t appear to have found any smoking gun of personal tax evasion. And on a personal note, he’s surely deriving some satisfaction that one of the other senior U.K. figures named in the cache is Michael Ashcroft, the former Tory donor who sponsored a muckraking biography of Cameron last year.

Moreover, The Guardian, one of the newspapers in the coalition of publications that worked on the scoop, is itself famous for using an offshore structure to keep its corporate activity tax efficient. And the BBC, another participant, will think twice about provoking the government when tensions are already running high over coverage of the E.U. referendum campaign. Neither appears to be in a particularly crusading mood.

The opposition Labour Party doesn’t seem to have much stomach for getting personal either. Such things always seem to rebound in embarrassing revelations about how, for example, former leader Ed Miliband and his brother David reduced the inheritance tax liability on their parents’ home through a legal maneuver that was condemned as morally wrong by none other than Labour’s last PM, Gordon Brown.

Labour’s current leader, Jeremy Corbyn, is better qualified to press home the issue. Corbyn was only propelled to the leadership by a groundswell of grass-roots support last year on the perception that he had kept his Socialist principles pure in 30 years on the political back benches.

On Tuesday, Corbyn called on Cameron to consider imposing “direct rule” on the recalcitrant outposts of the British Empire, seemingly unaware of what ungrateful colonies tend to do when England interferes in their tax affairs too directly.

The sight of the veteran socialist turning imperialist after steadfastly opposing every exercise of British power abroad for the last 50 years is just one of the more striking ironies and absurdities to come out of the Panama Papers in the first 36 hours. It surely won’t be the last.

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