Panama Papers outrage: a push for greater transparency or pure voyeurism?

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To illustrate the Panama Papers a showing Panama Offshoring and Mossack Fonseca

Simon Walker, director general of the IoD, discusses the response to the leaking of the Panama Papers…

Nearly 20 years ago when I was an adviser at No 10 Downing Street, a cabinet minister summed up how the Daily Mail operates. At the time the government was proposing to ban the Red Hot Dutch satellite TV channel whose approach to broadcasting needs little elucidation. When I queried whether there were implications for press freedom, the minister denied it vigorously. “The Mail will love it,” she said.

“The front-page headline will read ‘Government saves YOU from disgusting pictures like these’ over two semi-pornographic stills, before lauding us for our commitment to family values and safeguarding children… then at the bottom it will say ‘For more disgusting pictures turn to pages 5-8’.” So it is with the Panama Papers…

The Panama Papers

There is no suggestion that David Cameron – or any other British politician – has done anything remotely illegal, or even particularly crafty. He hasn’t even used venture capital trusts or the enterprise investment scheme introduced by his predecessors and used perfectly properly to reduce income tax.

But what a wonderful opportunity to pry into the private space of our political leaders. It is voyeurism pure and simple – and, as the Financial Times put it, a “chance to remind voters that the PM is ‘a posh git’ with an unpleasant smell of money around him”.

Now we have commentators campaigning for public access to the detail of everyone’s earnings and tax payments, along Norwegian lines. In Oslo, you can look up your neighbours’ tax affairs online and slaver or sneer contemptuously as you choose.

How profoundly unBritish. This is meant to be the country of restraint and stiff-upper-lip decency, not envy-driven, let-it-all-hang-out prurience. The critics should be careful what they wish for. A decade ago the publication of directors’ salaries was mandated on the theory that it would shame some of our greedier bosses into moderating avarice. The perverse consequence was that CEO X, sensing public awe at CEO Y’s more generous remuneration package and considering his – for it was invariably ‘his’ – performance better, ratcheted up his own  salary demands. So began a fresh round of competitive excess.

Holier than thou?

What the Panama Papers actually prove is how little corruption there is in British politics. When he was leader of the Labour party, John Smith used to remind his MPs that, as a barrister, he was a rarity in his caucus: a politician who could earn more outside parliament than in it. It is hardly surprising that the world’s highest-paid politician is Singapore’s prime minister with £1.14m a year (equivalent to the combined salary of the leaders of France, Germany, Italy, Japan and the UK) down from almost £2m after public unhappiness four years ago. And Singapore has consistently ranked among the most effectively administered administrations anywhere.

Kudos then for the Co-operative Group’s CEO Richard Pennycook, who voluntarily proposed a 60 per cent salary cut because his job had become less demanding as distance grows from his crystal meth-buying predecessor, Paul Flowers. Yes, the Co-op is different, but Pennycook’s approach may dilute slightly the understandable public outrage as another corporate pay season looms. Every little helps.

Simon Walker is the IoD’s director general

To read more from Simon Walker click here

About author

Simon Walker

Simon Walker

Simon Walker served as director general of the IoD from September 2011 until January 2017, having enjoyed a career spanning business, politics and public service. From 2007 to 2011 he was chief executive of the BVCA, the organisation that represents British private equity and venture capital. Walker has previously held senior roles at 10 Downing Street, Buckingham Palace, British Airways and Reuters.

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