It has become the £31,500 question: is £31,500 all David Cameron made from holding a stake in Blairmore, an offshore investment vehicle managed and partly owned by his father Ian? Or does the information — which came to light last week with the release of the Panama Papers — just scratch the surface of Cameron’s financial machinations?
On one level, news of Cameron’s offshore fund is hardly news at all. The Cameron family’s centuries-long involvement with the smoke-and-mirrors world of finance and commerce has long been known (or at least speculated about). And Britons have reacted accordingly, greeting the revelation largely with a cynical shrug instead of — as in Iceland — impassioned street protest.
Yet even if more confirmation than revelation, the details of the Cameron family’s financial affairs — as well as the financial affairs of tens of thousands of other wealthy individuals, known and unknown — are of great consequence because they call into question some of the key myths that have sustained neoliberal politics.
In the case of David Cameron, this is true on a personal and political level.
Since his election as Conservative Party leader in 2005, Cameron’s appeal has been predicated on the notion that he is just a regular guy — an ordinary bloke who likes a pint, likes sports, and, in the classic public school tradition, doesn’t believe in working too hard. This is the winning mixture that 22 percent of the electorate favored in the May 2015 general election, just enough to see off the earnest or mandarin-like (depending on your perspective) Ed Miliband. Conservative strategists now hope it will ensure their party’s electoral dominance against the professorial Jeremy Corbyn.
The Panama Papers are crucial precisely because they blow a hole in Cameron’s carefully fashioned image. They reveal the incongruity between his personal circumstances and his “regular guy” affectations.
Cameron’s “£300,000 inheritance” (out of a total estate worth at least £2.74 million), £3.5 million house in London, and £1.5 million home in the country all show he’s enjoyed a hand in life light years away from the millions of rural and suburban voters who gave him his majority.
It is of course no surprise that in a political party that serves the interests of capital, lacks a mass membership base, and is bankrolled by the rich, the leadership consists of those with hereditary wealth. But such blatant plutocracy cuts against the narrative of those pushing austerity, who talk about the need for fiscal restraint while shoveling money to the rich.
The limited social gains made under the New Labour administrations in the late 1990s and 2000s were flimsy, predicated on papering over society’s cracks with public spending programs rather than securing structural change. Still, they had a generally progressive distributive effect, especially after Gordon Brown’s government raised taxes on income and capital and increased social transfers following the 2008 financial crisis.
Cameron has used a mixture of tax reductions and regressive transfers to claw back these modest social gains. Aided by a vertiginous rise in asset prices, he’s widened the UK’s wealth gap while building a political consensus around cuts to social provisions that even Margaret Thatcher didn’t countenance.
The government seems hell-bent, for instance, on making it impossible for local governments and nonprofit housing associations to offer low rent and subsidized housing. To that end, it’s instituted policies like the “bedroom tax,” which raises the rent for tenants who don’t have every bedroom in their dwelling occupied. As a result, many tenants have racked up large arrears and been effectively evicted.
Less dramatic but just as damaging has been the government’s attempts to encourage the privatization of social housing, especially in places with high housing prices like London.
In their last election manifesto, the Conservatives pledged to extend “right to buy” to housing association properties and promised to force local governments and housing associations to “sell their most valuable properties.” With little public support for either policy, it appears the Tories’ primary purpose is to transfer billions of pounds of public assets to the private sector.
Recent research by Inside Housing magazine has shown that 38 percent of the social houses sold under the Thatcher-era round of right-to-buy are now owned by private landlords. Today more than one in five UK adults rent privately, spending a third of their income on average to secure lodging. Many elected officials benefit directly from the increasingly privatized market: one in three UK parliamentarians are landlords, including Cameron.
Another sphere in which the government is helping funnel money upward is the student loan system. A plan is in the works to sell off the right to collect repayments on £74 billion worth of student loans. If realized, the proposal would drive the country further away from providing financial support for students as a social service. Instead of being returned to the public purse, future loan repayments would accrue to the highest bidder — creating another class of complex investment vehicles while dealing a blow to the concept of the public good.
Cameron shows no signs of letting up. His latest budget, released to parliament last month by Chancellor of the Exchequer George Osborne, is a study in austerity.
Osborne, the heir to an Irish aristocratic title and the reputed beneficiary of a trust worth £4.5 million, is no neophyte when it comes to advancing pro-rich policies. In 2007, with the Conservatives out of power, he announced they would increase the inheritance tax threshold to £1 million. The current budget, however, takes it to another level.
By slashing capital gains taxes, the budget will hand Britain’s two hundred thousand richest people an extra £3,000 a year. Osborne’s fiscal plan also boasts a range of “Lifetime ISAs,” tax-free savings schemes that give those under thirty who invest the maximum £4,000 a year an extra £1,000 in tax relief. If the account holder sets aside £128,000 over the course of thirty-two years, she receives an additional £32,000.
Lifetime ISAs — the centerpiece of what Osborne proclaimed “a budget for future generations” — are a blatant sop to the country’s wealthy. Given the prevalence of un- and underemployment among Britons under the age of thirty, and given that young people are far more likely to receive low wages and lack affordable housing, the pool of people able to take advantage of the tax benefit is unlikely to be very big.
Just like Help to Buy, a state program that provides interest-free loans to “first-time buyers” (a group that is at times quite loosely defined), Lifetime ISAs transfer public money to the children of the wealthy and amplify the advantages they have already inherited.
Finally, there’s the tax-dodging the Panama Papers have so effectively publicized. It was through these means that Ian Cameron was able to augment his family’s fortune, allowing his younger son to dedicate his life to the pursuit of political power — political power he has used to aid the similarly well-heeled. And it’s because of this practice that, according to estimates last year from the UK Parliament’s monetary policy committee, major British companies are sitting on cash surpluses in the region of £500 billion.
This is why the Panama Papers matter. They lay bare the mechanisms through which people like David Cameron accumulate mounds of cash. And they delegitimize the austerity agenda people like him are pushing.
Public cynicism and the relative weakness of the forces arrayed against the Conservatives mean that the £31,500 question, whatever the answer, is unlikely to spark political upheaval. For many, it is wearying and demobilizing — another crooked politician, they sigh — rather than a call to arms. However, in denting the myth of “regular guy Dave” and highlighting the self-serving concerns that structure pro-capital politics, whoever leaked the Panama Papers has done a great service.