First, the specifics of Cameron’s own finances:
- No, he isn’t hiding some vast income in a tax haven. Despite the unwillingness of yesterdays mask-wearing, SWP-placard-waving protesters to engage with the facts, it turns out the Prime Minister does in fact pay his taxes in full in the UK, as he claimed.
- In fact, he overpays his tax. As even Jolyon Maugham, a former Labour adviser who is no friend to the Prime Minister or the Conservatives, concedes, Cameron has for several years sought to cancel out or simply waive tax exemptions on a proportion of his income.
- His mother’s gift is unremarkable, legal and moral. In a week like this, the pressure is always on for the Sunday papers to move the story along – without new whiffs of scandal, they have been forced to try to create a row about Mary Cameron’s decision to give her son £200,000 shortly after his father’s death. If she lives until 2018, then no tax will be payable on that gift. So what? Gifts from a parent to a child are very common, particularly at this stage of life. The seven-year rule on gifts is an aspect of the law which was deliberately introduced to allow people to give away their property without the recipient later being penalised - on the basis that later hitting someone with inheritance tax would be manifestly wrong. For someone to choose to pass on their property to their child rather than spending it on themselves is a moral thing to do, and we should not condemn anyone for doing so. Given that Conservative policy in 2010 was to raise the inheritance tax threshold to £1 million, Cameron being perfectly consistent in accepting the sum, as well. It’s a non-story.
Second, the politics:
- Getting ahead of a story is better than racing to catch up with it. The publication of the Prime Minister’s personal finances is a historic step, which has generated another raft of uncomfortable (if unfair) headlines this morning. All this could have been avoided – the publication, the protest, the week of speculation and implication and the likely distress of having one’s dead father debated and criticised in the press – had Downing Street got on top of the story on day one. Whatever the reason for the fudge early on (some point the finger at press aides, though Cameron yesterday took responsibility himself), it only served to sink the Prime Minister further into the mire, and suggested to the Lobby that there was a scandal to sniff out. The lesson should have been known already, but if not then it certainly should have been learned by now.
- This sets a precedent for future Prime Ministers. Rather like the leaders’ debates at the General Election, Cameron has now set a major precedent for his successors. I doubt the impact on later Prime Ministers was particularly high on his list of considerations, but nonetheless it’s now inevitable that leaders of all major parties will face demands for them to do the same and publish their private finances in full. That may avoid rows like this, but it also moves us closer to an American political culture, in which candidates are expected to parade their financial virtue before the nation. Traditionally, we have preferred to focus on what people propose to do if elected, rather than descend into unattractive bank account pageantry, so this seems like a loss. Also, this opens the door for those on the Left to double down on the poisonous politics of envy and inverse snobbery – I doubt voters will buy into that, but providing another tool to those who pursue such tactics is not a positive contribution to political life.
- It also gives MPs another reason to be annoyed with Cameron. Theo Bertram, the canny former Labour SpAd, draws an analogy between this story and the way the expenses scandal affected Gordon Brown’s relationship with Labour MPs. As he points out, every MP hauled up in an expenses story targeted at least some of their ire at Brown for his role in mis-handling the scandal. Now, with the Prime Minister’s finances on public display, the pressure will now increase on MPs to reveal every detail of their own income and savings. Given that some already blame Cameron for holding down their pay, they are unlikely to thank him for feeding the media’s appetite for prying into politicians’ personal accounts. They already know that this week’s row will to some extent have affected the Tory brand, and now they might well have to pay a personal price to end the media speculation. Consider everything else going in in the troubled relationship between the mostly anti-EU backbenches and the overly pro-EU Downing Street, and it isn’t hard to see how this could prove damaging.