One of the most durable sources of progressive frustration in UK politics has been the steadfast refusal of the electorate to accept that it is not rich. Logical, Fabian arguments for higher taxation have often failed to curry favour even with those who would be completely unaffected – except to benefit from the redistributive intent – of rises. Nowhere has this trend been more stubborn nor more baffling than on the subject of Inheritance Tax. This is a penalty imposed only on the very rich and which cannot reasonably be said to take away anyone’s ‘hard earned’ wages (affecting, as it does, only the recipients of inherited wealth). And yet it is loathed. When George Osborne was desperately scrambling for something – anything – to prevent Gordon Brown calling an election it was Inheritance Tax relief he seized upon. And it worked. Millions who would never, ever have to pay it responded favourably to Osborne’s promise that even fewer people would ever have to in the future.
There are plenty of plausible explanations as to why the British public continue to confound progressives by rejecting Inheritance Tax. ‘False consciousness’ a good Marxist might posit, ‘ambition and a sense of family’ might counter the One Nationer, ‘respect for individual liberty’ would argue the Friedmanite. They may very well all be right, to one degree or another. But the fact of British antipathy to ‘death taxes’ may have saved the Prime Minister’s skin this week – just as it did his career in 2007 – by serving as a helpful distraction. Because a fair whack of the public can understand and empathise with a bit of imaginative accounting to keep the taxman away from a funeral. Rather fewer, however, are so relaxed about channeling millions into secretive, offshore islands that are spared obscurity only by their embrace of the moniker ‘tax haven’.
After a dismal and pathetic week of media mismanagement, Cameron managed finally to turn things round a little over the weekend by shifting the focus from offshored wealth to his father’s will. In doing so he finally displayed just a fragment of the political grip he is supposed to exert so effortlessly. It has muddied the waters, certainly. As has the increasingly pantomime refusal of the Labour Leader to hit the net of even the most open goal. And by throwing Cabinet colleagues under the bus – ‘yes, I think potential Prime Ministers should also release their tax returns’ – Cameron has fended off a forensic firing squad with a free for all instead.
All of this explains the Prime Minister’s relaxed and confident performance in the Commons. But it doesn’t mean that he emerges unscathed. The truth of the matter is that the damage the Panama Papers have done to David Cameron is a product as much of the European referendum as it is his father’s choices. The sight of true-blue Thatcherites denouncing a spot of overseas speculation is a symptom of how deep the Tory rot now goes. Everything is Brexit and Brexit is all for many of Cameron’s backbenchers – that leaves him over-exposed, under-resourced and constantly under siege. The Party is split and so the Prime Minister is left in a permanent state of embattlement.
There is a hope amongst Cameroons that all of this can be fixed. Panama, they argue, will blow over. Politics, they opine, moves on. They are right but they are also wrong. The Prime Minister will survive the tax dodging antics of his forebears but he surely can’t expect to escape the inheritance he has shaped for himself. Whatever the result of the referendum – called for reasons of party management – the very forces that have left him so vulnerable this week will not go away. The Conservative Party will require a catharsis once this civil war is done. And just as England was able only to reunite once its King was dead, so it seems increasingly difficult to see Tory reconciliation without Cameron’s head – whatever the result of the vote. In the end, the inheritance that will see off David Cameron will not be of his father’s making but of his own.