David Cameron has sought to draw a line under the controversy over his tax affairs, admitting to MPs that he handled it badly but defending the right to "make money lawfully".
The prime minister’s robust performance won support from Conservative backbenchers, some of whom expressed outrage over the way his late father’s offshore investments had been reported.
Chancellor George Osborne, Labour leader Jeremy Corbyn and London mayor Boris Johnson all followed Mr Cameron's lead on Monday by publishing details of their tax returns.
Scotland's first minister Nicola Sturgeon and shadow chancellor John McDonnell had already done so.
Mr Cameron said there was a strong case for such very senior figures to publish their tax records, but he warned against extending the obligation to all MPs.
“We should think carefully before abandoning completely all taxpayer confidentiality in this House, as some have suggested. If this were to come in for MPs, people would also ask for a similar approach for those who ask us questions, those who run large public services, or lead local government, or indeed those who edit the news programmes or newspapers.
“I think this would be a very big step for our country; it certainly shouldn’t take place without a long and thoughtful debate, and it is not the approach that I would recommend,” he said.
Admission
It was Mr Cameron’s first appearance in the House of Commons since the
Panama
Papers revealed his father’s offshore fund and his admission some days later that he profited from it. Describing the late
Ian Cameron
as “a hard-working man and a wonderful dad”, the prime minister insisted his offshore investment fund was not designed to avoid paying tax.
“I would reinforce the point that many millions of our fellow citizens own shares, and many people choose to make their investments through unit trusts, which are a relatively safe form of investment because they share the risk. Many unit trusts are listed in other countries – many of them now in Dublin – and they are set up in that way not to avoid tax, but to make sure that the revenues are returned to the unit trust holder who then pays tax, which is the key point,” he said.
The information disclosed on Monday showed that Mr Corbyn prepared his own tax return rather than relying on an accountant, and paid a fine of £100 for filing it six days late this year. Mr Osborne earned £44,647 from dividends paid out from shares linked to his family’s wallpaper business.
Mr Johnson paid almost £1 million in the past four years on earnings that included fees for his £250,000-a-year newspaper column and book royalties.
Mr Corbyn said the prime minister appeared to be unaware of the depth of anger many members of the public felt about tax avoidance.
“I’m sure you will join me in welcoming the outstanding journalism that has gone into exposing the scandal of destructive global tax avoidance revealed by the Panama Papers.
“What they have driven home is what many people have increasingly felt – there is now one rule for the super-rich and another for the rest. I’m honestly not sure that you fully appreciate the anger that is out there over this injustice,” he said.
Human instinct
Mr Cameron faced criticism over the weekend when he disclosed that he received £200,000 from his mother in gifts that could avoid inheritance tax.
He told MPs on Monday it was “natural human instinct” for parents to help their children.
“As for parents passing money to their children while they are still alive, it is something the tax rules fully recognise,” he added.
