Plutarch describes Anacharsis' mockery of the Athenian lawgiver Solon, whose laws, 'like cobwebs, snag the frail and puny; but the rich and mighty punch through them.' As in sixth-century BC Athens, so now in the global sport of tax avoidance. The 'Panama Papers' disclosed this week by the Süddeutsche Zeitung, Guardian and others contain some 2.6 terabytes of data leaked by a whistleblower in the Panamanian law firm Mossack Fonseca. In their files, the usual telly faces, Tory party donors, oligarchs, sportspeople and surplus royals wash up; they're all in it together. So was David Cameron's late father, via the still-trading investment fund Blairmore Holdings Inc., which avoided UK tax entirely for a thirty year stretch.

From Cameron's viewpoint the doomsday scenario would be revelations like those that felled Iceland's premier Sigmundur Davíð Gunnlaugsson when it emerged he'd set up a cash-sock company in the British Virgin Islands (BVI) for personal gain. For his part, Cameron's handling of the issue has been remarkably inept. He's met questions arising from the drip-feed of revelations this week withstudied evasion and half-answers that have only fuelled suspicion. After first saying it was all private, and then carefully dodging when asked if he's benefited from offshore vehicles in the past, he's finally spilled that he had Blairmore shares between 1997 and 2010, which converts his earlier shiftiness into something more like outright duplicity.

Blairmore is incorporated in Panama but ostensibly run in the Caribbean. A reserve army of Bahamians, including a bishop, retained by Blairmore via the private bank Coutts, signed off on paperwork,though day-to-day business seems to have been done – making it fiscally liable – in the UK. Richard Brooks, a former tax inspector now working for Private Eye, said: 'It is hard to see howthe company was not managed and controlled, and therefore tax resident, in the UK at the time.'

But even leaving aside the Camerons' personal stake, the stench of failure, through its velleity on tax-dodging, hangs about the government. Last year's communiqué from the Joint Ministerial Council for the British Overseas Territories (BOTs), including the Virgin Islands, expressed satisfaction with the steps 'taken by the BOTs to meet global standards in a range of areas,noting for example … the BVI’s rating of "largely compliant" on information exchange for tax purposes by the OECD Global Forum this year.' In a poll before the Panama revelations, 80 per cent of Conservative voters agreed that Cameron 'has a moral responsibility to ensure that the UK’s Overseas Territories are as transparent as possible'. In 2013, the prime minister blocked an EU initiative to open offshore trusts to the same public scrutiny as companies.

You might think that austeritarian politics, fixated on the structural deficit, should be as worried about revenue as spending, and so bear down on big-ticket tax dodges. But as everyone knows, it doesn't work like that. Smaller revenues mean a shrunken state and more money in private pockets. HMRC cut 'sweetheart' deals with Google for a risible return in revenue, while the government strips public assets like RBS and the Royal Mail at a markdown. In fairness to the government, this rests on distributive principle as well as self-interest; the principle roughly being: from each according to his docility, to each according to his greed. Revenue inspectorates are docile as well as governments, though lax andfiscally minimalist regimes, such as those of some US states, make avoidance easy: Jason Sharman, a political economist at Australia's Griffith University, told Reuters: 'Somalia has slightly higher standards than Wyoming and Nevada.' Capital finds welcominghavens in BOTs like Bermuda.

All of which leaves Cameron's flank perilously exposed in the Brexit referendum. Discontent can be channelled into backing Leave, just as voters often use by-elections to whack the government. Thisweek's big Dutch 'No' to the Ukraine treaty sounds the tocsin, as does Gunnlaugsson'sejection. The good news for Cameron, if no one else, is that the exposed flank is his left, which the neoliberals and City boys fronting the Leave campaign have no wish to attack: Arron Banks, the leader of Leave.EU and previously a Tory donor, has holdings in a BVI company run from Gibraltar. Even so, the risk for Cameron is that Leave becomes a rallying point for the downtrodden but restive. It's surprising that Leave strategists havefailed so far to see this angle – or, on reflection, maybe not so much.

Read more in the London Review of Books

David Runciman: Offshore · 14 April 2011

Richard Murphy: What is a tax haven? · 14 April 2011

Susan Watkins: The European Impasse · 29 August 2013

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