Panama Papers: Prime Minister David Cameron accused by Labour of hypocrisy after he confirms he did have a stake in his father's offshore trust

Ministers Meet At Downing Street For COBRA Meeting
Cameron has admitted he did have a stake in Blairmore Investment (Source: Getty)

Prime Minister David Cameron has been accused of hypocrisy by Labour after he confirmed that he had a stake in his father's offshore trust.

Questions had been raised over his links to the huge data leak from a Panamanian law firm last weekend.

Cameron's late father Ian Cameron was among the thousands of names contained within 11.5m documents leaked from Mossack Fonseca.

The PM told ITV's Robert Peston this evening that Blairmore Investment, the trust set up by his father, was not established so as to avoid tax.

But Labour's deputy leader Tom Watson said that while the Prime Minister shouldn't be blamed for his father's actions, "he can for hypocrisy. He said that sunlight is the best disinfectant and wasn't entirely straight with the British people about what his own financial arrangements were".

"That wouldn't be so bad if he hadn't also been lecturing very prominent people about their own tax arrangements, some he called morally wrong for being invested in similar schemes.

"People don't like that and they want a lot more answers from David Cameron before this scandal goes away."

Meanwhile, Bassetlaw MP John Mann, who sits on the Treasury Select Committee, has called for Cameron to resign. "Cameron has been less than honest. He should resign immediately. Most decent people would expect nothing less."

Read more: The fallout from Panama has only just begun

But others disagree. Tax specialist James Quarmy, who works at Stephenson Harwood, thinks the Prime Minister has done nothing wrong and that people have got the wrong idea of what Cameron was involved in.

"I think what you need to understand about hedge funds and investment funds generally are that most of them are really rubbish ways of avoiding tax. If I wanted to avoid tax I would not put my money into a hedge fund because all the profits are paid out every year and it goes on my tax return," he told BBC Radio 4's Today programme.

"There is no element of deferral of tax, you’ll get more deferral of tax investing in a UK company. This is about as boring as it gets for investments - it’s no different than Mr Cameron investing in a UK stock," he added.

Indeed, Cameron, in his ITV interview, said: "It was set up after exchange controls went so that people who wanted to invest in dollar denominated shares and companies could do so," he said.

"The point is that it was a unit trust," Cameron said. "So the money it had was other people's money on which they pay tax. If you were a United Kingdom owner of these things you paid income tax on your dividends and you paid tax in the normal way. If you were a foreigner you would pay tax in your own country."

He said there are thousands of unit trusts and millions of people who own shares in Britain, many of whom hold them through unit trusts.

Cameron said he sold 5,000 units in the trust, which he owned jointly with his wife Samantha, in January 2010, before he became Prime Minister, for "something like £30,000".

Panama papers: What you need to know

He added that there was a profit on the sale "but it was less than the capital gains tax allowance so I didn't pay capital gains tax".

"It was subject to all the UK taxes in all the normal way," he said. "So I want to be as clear as I can about the past, present and future. Because frankly I don't have anything to hide."

When asked about a £300,000 inheritance he received from his father, Cameron said he "obviously can't point to every source of every bit of the money".

"It has been a difficult few days, reading criticisms of my father and his business practices - my dad, a man I love and admire and miss every day," he added.

Read more: Prime Minister will not benefit from offshore funds in future

The news that Cameron had a stake in an offshore trust comes after a week of questions over his links to the Mossack Fonseca data breach.

This week Downing Street and Cameron issued four statements on the issue before the interview on ITV News.

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