‘Cameron tax havens law is useless… and he knows it!’ – economist

British Prime Minister David Cameron. © Kerry Davies / Daily Mail Pool
Prime Minister David Cameron’s plan to introduce new legislation to curb tax evasion in the wake of the Panama Papers leak are a “meaningless gesture,” the tax expert behind ‘Corbynomics’ has said.

Richard Murphy, of Tax Research UK, said that because most tax evasion takes place in offshore havens outside the UK, Cameron’s proposals, aimed at making firms criminally liable if their employees facilitate tax evasion, will be of little use as liability will be “exceptionally difficult to prove.”

“The result is that we will have a law of little consequence only of use for targeting the activities of small limited companies where the owner/director knowingly pockets cash,” Murphy wrote.

“Cameron knows that. And I am sure that he knows this law will be useless.”

Murphy said if Cameron is serious about changing corporate behavior, the prime minister needs to demand country-by-country reporting.

“Then we will know those companies who are really making use of tax havens and who, by their actions, fund the infrastructure of these places that is also, whether they are aware of it or not, used for illicit activity.”

Following a tumultuous week, massive crowds gathered over the weekend in front of Cameron’s residence at 10 Downing Street, calling for his resignation.

The embattled PM acknowledged mishandling of the controversy surrounding his involvement in his late father’s trust and released some of his personal financial details in a bid of transparency on Sunday.

Downing Street signaled that Cameron is pushing Chancellor George Osborne to follow suit and publicize his tax returns, despite reports from the Treasury on Sunday that Osborne had no plans to do so.

By Monday morning, a Treasury source cited by the Guardian said no decision has yet been made on releasing the records.

Labour meanwhile is demanding an independent inquiry into the leaks after it emerged that the newly-appointed head of Her Majesty’s Revenue and Customs (HMRC), the agency currently overseeing the investigation, had previously been a partner at Simmons & Simmons, a law firm that represented a number of offshore firms.

The Guardian, which has access to the leaked documents, reports that Simmons & Simmons’ name appears on dozens of emails and documents in the Panama Papers in connection with several companies, including Blairmore Holdings, the fund set up by Cameron’s father.

HMRC chief Edward Troup worked at the law firm from 1997 to 2004.

Customs has been given a lead role in the £10 million (US$14.2 million) investigation into allegations of tax-dodging and money laundering.

“This further highlights why, for any inquiry to have the full confidence of the British people, it must be truly independent in structure and process,” Labour Shadow Chancellor John McDonnell said.

“It certainly should not be reporting to politicians whose party has been highly implicated in this scandal, with large donors directly involved in this matter.”