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| Epoch-changing attitudes to wealth and tax are engulfing Cameron | Epoch-changing attitudes to wealth and tax are engulfing Cameron |
| (5 months later) | |
| One week begins with No 10 insisting David Cameron’s tax affairs are a private matter. The following week starts with Cameron publishing a summary of his tax returns for the last six years. There are many examples of supposedly mighty prime ministers succumbing weakly to an unstoppable wave. This is one of the most spectacular, and the wave generated by the Panama Papers has not subsided yet. | One week begins with No 10 insisting David Cameron’s tax affairs are a private matter. The following week starts with Cameron publishing a summary of his tax returns for the last six years. There are many examples of supposedly mighty prime ministers succumbing weakly to an unstoppable wave. This is one of the most spectacular, and the wave generated by the Panama Papers has not subsided yet. |
| The publication of the prime ministerial tax arrangements is a sign of fragility rather than strength. Cameron acted reluctantly and belatedly, and, fairly or unfairly, when the media sense weakness they go for the kill. Other senior cabinet ministers will now come under pressure to publish their tax returns. The chancellor, George Osborne, will struggle to avoid doing so. The Treasury has said Osborne currently has “no plans” to do so, as if it were discussing the possibility of whether he might go to the cinema. But the issue of publication is not entirely in Osborne’s hands. When the pressure becomes overwhelming and a government is frail, no minister is strong enough to resist. | The publication of the prime ministerial tax arrangements is a sign of fragility rather than strength. Cameron acted reluctantly and belatedly, and, fairly or unfairly, when the media sense weakness they go for the kill. Other senior cabinet ministers will now come under pressure to publish their tax returns. The chancellor, George Osborne, will struggle to avoid doing so. The Treasury has said Osborne currently has “no plans” to do so, as if it were discussing the possibility of whether he might go to the cinema. But the issue of publication is not entirely in Osborne’s hands. When the pressure becomes overwhelming and a government is frail, no minister is strong enough to resist. |
| There are parallels with John Major’s attempt to regain prime ministerial authority in the mid-1990s with his sudden focus on “back to basics”, a move that was wrongly interpreted as a campaign against permissiveness. Instead of stabilising the government, ministers conducting extramarital affairs and Tory MPs sharing beds in hotel rooms with unlikely companions became neurotic with justified fear. Now, in an attempt to win back trust, Cameron is putting inadvertent pressure on wealthy Tory colleagues to reveal all. Some will be panic-stricken. | There are parallels with John Major’s attempt to regain prime ministerial authority in the mid-1990s with his sudden focus on “back to basics”, a move that was wrongly interpreted as a campaign against permissiveness. Instead of stabilising the government, ministers conducting extramarital affairs and Tory MPs sharing beds in hotel rooms with unlikely companions became neurotic with justified fear. Now, in an attempt to win back trust, Cameron is putting inadvertent pressure on wealthy Tory colleagues to reveal all. Some will be panic-stricken. |
| Yet UK politicians are already scrutinised in a way that would make better-paid media figures squirm. Cameron’s belated candour about his recent tax arrangements is the least significant element to this whole saga. The timing of publication of the tax returns is part of the “process” story. Cock-ups relating to process within No 10 are beguiling and nearly always red herrings. In this case most commentators suggest that had Cameron been open at the beginning of last week there would have been little fuss. I disagree. There would still have been uproar. Look at the front pages of the Sunday newspapers after he had published his tax returns. Instead of praising his candour, most of them slaughter him. The onslaught is evidence in itself that candour does not end media frenzies but feeds them. | Yet UK politicians are already scrutinised in a way that would make better-paid media figures squirm. Cameron’s belated candour about his recent tax arrangements is the least significant element to this whole saga. The timing of publication of the tax returns is part of the “process” story. Cock-ups relating to process within No 10 are beguiling and nearly always red herrings. In this case most commentators suggest that had Cameron been open at the beginning of last week there would have been little fuss. I disagree. There would still have been uproar. Look at the front pages of the Sunday newspapers after he had published his tax returns. Instead of praising his candour, most of them slaughter him. The onslaught is evidence in itself that candour does not end media frenzies but feeds them. |
| Cameron and Osborne are being engulfed by epoch-changing attitudes to tax and the wealthy | Cameron and Osborne are being engulfed by epoch-changing attitudes to tax and the wealthy |
| There are much deeper currents generating the outcry. One is related to the EU referendum. Eurosceptic newspapers are now tormenting Cameron in the same way they bullied Major. The promise of a referendum before the election might have stabilised Cameron’s leadership for 10 minutes. Predictably, the staging of it is making his life a form of hell. | There are much deeper currents generating the outcry. One is related to the EU referendum. Eurosceptic newspapers are now tormenting Cameron in the same way they bullied Major. The promise of a referendum before the election might have stabilised Cameron’s leadership for 10 minutes. Predictably, the staging of it is making his life a form of hell. |
| Even so, as with Iain Duncan Smith’s recent resignation from the cabinet, the Europe dimension is overplayed in stories not directly related to the referendum. Cameron and Osborne are being engulfed by epoch-changing attitudes to tax and the wealthy. The sums in Cameron’s tax returns are relatively small for a product of a wealthy family that sent children to Eton. But to most voters they shine light on a metaphorical foreign land, as well as the real ones that house offshore trusts. In that distant land, a London house earns hundreds of thousands of pounds in rent, mothers have a spare £200,000 in cash to hand over to sons and the language of finance is spoken so fluently that investing cash is as straightforward as buying a loaf of bread. | Even so, as with Iain Duncan Smith’s recent resignation from the cabinet, the Europe dimension is overplayed in stories not directly related to the referendum. Cameron and Osborne are being engulfed by epoch-changing attitudes to tax and the wealthy. The sums in Cameron’s tax returns are relatively small for a product of a wealthy family that sent children to Eton. But to most voters they shine light on a metaphorical foreign land, as well as the real ones that house offshore trusts. In that distant land, a London house earns hundreds of thousands of pounds in rent, mothers have a spare £200,000 in cash to hand over to sons and the language of finance is spoken so fluently that investing cash is as straightforward as buying a loaf of bread. |
| Before the financial crash of 2008 none of this would have resonated quite so much. Indeed, in the early New Labour era Tony Blair and Gordon Brown ached to be associated with the rich, to prove that Labour was no longer “old”. They would not embark on a post-crash political project seeking to be photographed next to a wealthy banker. After the crash Cameron and Osborne took two pivotal decisions that have defined their leadership. Having pretended to support Labour’s spending levels, they responded to the crash by returning to their comfort zone, advocating a smaller state and a programme of austerity. At the same time they sought to make an impossibly awkward contortion by claiming, as they made their cuts, that “we are all in this together”. | Before the financial crash of 2008 none of this would have resonated quite so much. Indeed, in the early New Labour era Tony Blair and Gordon Brown ached to be associated with the rich, to prove that Labour was no longer “old”. They would not embark on a post-crash political project seeking to be photographed next to a wealthy banker. After the crash Cameron and Osborne took two pivotal decisions that have defined their leadership. Having pretended to support Labour’s spending levels, they responded to the crash by returning to their comfort zone, advocating a smaller state and a programme of austerity. At the same time they sought to make an impossibly awkward contortion by claiming, as they made their cuts, that “we are all in this together”. |
| Cameron’s tax returns, though modest for the social world he inhabits, are the latest episode to blow apart the myth on which his government depends: the myth that we are all part of a great collective war-like sacrifice. Duncan Smith’s resignation also explicitly challenged that premise. Now the prime minister’s tax returns highlight how a homeowner in London can raise more from rent than most voters will earn in a year and that, if parents are cash-rich, six-figure sums can be transferred to children. | Cameron’s tax returns, though modest for the social world he inhabits, are the latest episode to blow apart the myth on which his government depends: the myth that we are all part of a great collective war-like sacrifice. Duncan Smith’s resignation also explicitly challenged that premise. Now the prime minister’s tax returns highlight how a homeowner in London can raise more from rent than most voters will earn in a year and that, if parents are cash-rich, six-figure sums can be transferred to children. |
| As Osborne prepares to announce more sweeping spending cuts this autumn, it becomes increasingly hard for him to claim equality of sacrifice. In reality the post-crash economics of London is as bonkers as the pre-crash version, making some of those who own properties wildly rich and those who want to own one desperately poor. Generous inheritance tax arrangements make a joke of claims that there is any chance of equality of opportunity. Tax avoidance for the super rich continues on a global scale. | As Osborne prepares to announce more sweeping spending cuts this autumn, it becomes increasingly hard for him to claim equality of sacrifice. In reality the post-crash economics of London is as bonkers as the pre-crash version, making some of those who own properties wildly rich and those who want to own one desperately poor. Generous inheritance tax arrangements make a joke of claims that there is any chance of equality of opportunity. Tax avoidance for the super rich continues on a global scale. |
| For decades in the UK the fashion has been for leaders across the political spectrum to support “fair taxation” without defining what they mean. In the mid-90s Blair and Brown argued that the new dividing line was not between high and low taxation but between fair and unfair taxes. The problem with this superficially smart juxtaposition was that higher taxes could be fairer. Cameron and Osborne, self-proclaimed progressives, also hail fair taxation. But what is their definition? They have avoided giving one, and in the resulting vacuum Cameron’s tax returns land awkwardly. | For decades in the UK the fashion has been for leaders across the political spectrum to support “fair taxation” without defining what they mean. In the mid-90s Blair and Brown argued that the new dividing line was not between high and low taxation but between fair and unfair taxes. The problem with this superficially smart juxtaposition was that higher taxes could be fairer. Cameron and Osborne, self-proclaimed progressives, also hail fair taxation. But what is their definition? They have avoided giving one, and in the resulting vacuum Cameron’s tax returns land awkwardly. |
| This saga is not about Cameron dissembling, No 10’s media operation or the EU referendum. Above all it is about widening inequality since the 2008 crash – the fundamental cause of which was out-of-control inequality. The saga has a long way to run. | This saga is not about Cameron dissembling, No 10’s media operation or the EU referendum. Above all it is about widening inequality since the 2008 crash – the fundamental cause of which was out-of-control inequality. The saga has a long way to run. |
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