Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.
The United Kingdom's "in-out" European Union referendum campaign officially kicks off this week with opinion surveys showing the June 23 ballot remains on a knife edge. The latest "poll of polls" tracker from The Financial Times shows an aggregated 43 per cent to 41 per cent lead for the "remain" camp, with a sizable chunk of the population still undecided, underlining precisely how tight the vote may be.
Should British voters ultimately choose to leave the EU, it will probably force Prime Minister David Cameron's resignation, given his leadership of the "remain" campaign. So he is fighting for his political life as he now intensifies efforts to sell the benefits of continued EU membership to the populace.
The official start point for the referendum this week comes during perhaps the most troubled time of Mr. Cameron's six-year premiership. Most recently, he has been ensnared in the Panama Papers revelations and admitted last Thursday that he held shares in the Blairmore Investment Trust from 1997 to January, 2010, shortly before he became Prime Minister.
Mr. Cameron's declaration was the fifth separate explanation in only four days of his financial affairs. While he hopes this latest pronouncement will draw a line in the sand over the issue, alongside his parliamentary statement on Monday, and the release of summaries of his tax returns, there will in fact be significant further scrutiny of this issue.
Barring major new revelations, however, the impact of the affair on the Prime Minister in the immediate term, personally, is more likely to weaken him than anything more dramatic. However, even this could be disproportionately damaging, with his back already to the wall with the EU vote, given that polls have previously shown him as the politician by some margin who is the most important influence in people deciding which way to vote in the June referendum.
As such, the fallout from the Panama issue has the potential to significantly eat away at Mr. Cameron's credibility, making it harder for him to make the pro-EU case in an increasingly
Euroskeptical Britain. This point was highlighted in new YouGov polling released last Friday, undertaken on Wednesday and Thursday, which shows that his approval rating is now at the lowest level since July, 2013, and for the first time lower than Labour Leader Jeremy Corbyn. Moreover, the survey shows the Prime Minister is significantly less trusted to deal with the issue of tax avoidance and tax havens than Mr. Corbyn.
There are multiple reasons why Mr. Cameron's financial affairs will not therefore now disappear, as Downing Street hopes, from public debate as the European referendum debate enters the home straight. Firstly, several MPs, including John Mann, a member of the House of Commons Treasury Select Committee, have called for Mr. Cameron to resign. And Mr. Mann has asked that the Parliamentary Commissioner for Standards investigate allegations that he broke the MP code of conduct by not declaring the profit he made in 2010 from the sale of his investment in the Blairmore fund.
Moreover, critics of Mr. Cameron have also highlighted that he chose to sell his shares in the tax haven fund just a few months before he became Prime Minister in 2010, but held the financial instruments for almost the entire period he was leader of the opposition in Parliament from 2005 to 2010. Deputy Labour Leader Tom Watson has therefore called for a full financial disclosure from Mr. Cameron of all his investments in the period since 2005.
Moreover, Mr. Corbyn has called for a full, independent inquiry into all the British-based beneficiaries of the firms exposed in the Panama Papers. In part, this is because he and shadow chancellor of the exchequer John McDonnell "want to know the truth behind reports that the Conservative Party has received substantial [political] donations from those linked to the scandal."
And the Panama Papers issue is just one of the challenges facing the government right now. This trouble started on March 16, when the government's showpiece annual budget quickly unravelled when then-secretary of state for work and pensions Iain Duncan Smith quit two days later.
Mr. Duncan Smith, a former leader of the ruling Conservatives, cut into the government in his resignation letter, asserting that the welfare cuts announced for the disabled "are not defensible in the way they were placed within a budget that benefits higher earning taxpayers. … I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest."
This explosive departure, the timing of which had not been anticipated, rocked the government for several days.
Another significant challenge includes the fallout from the decision of Indian-headquartered Tata Steel last month that it will be selling its British steelworks, with the outcome of the process highly unsure because of the lack of any certain buyers for all the plants. The firm currently employs about 15,000 people across sites in Rotherham, Corby and Shotton in England, and also Port Talbot in Wales, and supports many thousands of other jobs indirectly.
The government is under pressure for its handling of this crisis in the British steel industry, which has been hit by global oversupply and cheap imports from China, falling prices, and high energy costs. Business Secretary Sajid Javid, for instance, admitted he was caught unaware by Tata's announcement, made while he was on a trip to Australia, acknowledging that the decision-making process at the firm had advanced "much further than we expected."
Over all, the revelations in the Panama Papers have exacerbated the wider problems that Mr. Cameron is facing in advance of the EU referendum. The revelations are undercutting his personal credibility and, given that he will probably resign if Britain votes for Brexit on June 23, he is fighting for his political life during what could be the most dangerous period of his prime ministership.