British PM Cameron questioned on tax affairs of wife's employer

British Prime Minister David Cameron enjoys a beer with his wife Samantha (left) after competing in the Great Brook Run, a mile-long course through water and mud, at Chadlington in southern England Dec 29, 2014. -- PHOTO: REUTERS
British Prime Minister David Cameron enjoys a beer with his wife Samantha (left) after competing in the Great Brook Run, a mile-long course through water and mud, at Chadlington in southern England Dec 29, 2014. -- PHOTO: REUTERS

LONDON (REUTERS) - British Prime Minister David Cameron was asked in parliament on Wednesday about the tax affairs of his wife's employer, as the opposition Labour Party tried to embarrass him three months before a tight election.

Seeking to boost support ahead of the May 7 vote, Labour has looked to cast Conservative Party leader Cameron as someone who has benefited the rich, while failing to help low paid voters weather what it has called "a cost of living crisis".

Cameron, a descendant of King William IV and an alumnus of Britain's elite Eton College, rejects the charge, saying he has lifted millions of low paid voters out of tax altogether.

He has also spoken out strongly against multinational companies using tax avoidance schemes to pay tax elsewhere.

But the work of his wife, Samantha Cameron, has come under the spotlight in recent days after newspapers publicised the tax arrangements of her employer - Smythson, a British manufacturer of luxury leather goods.

The firm has its flagship store on London's exclusive Bond Street and counts members of the British royal family among its clients, but public records show it is owned through a parent company in Luxembourg and connected to a trust in Guernsey.

Cameron's wife works as a creative consultant for Smythson, and there is no suggestion that it is doing anything illegal. However, the press coverage is awkward for the Prime Minister.

On Wednesday, Labour lawmaker Tom Blenkinsop asked Cameron in parliament whether he knew "anyone who owns or works for a UK-registered company that uses a Luxembourg-based holding company in order to avoid paying their fair share of tax in the UK?"

Cameron ignored the implied reference to his wife, saying he wanted to see more companies headquartered in Britain and that more and more firms were choosing to do so.

"We inherited a situation where company after company was leaving our shores," he told parliament.

"Because we have now got competitive tax rates and a business friendly government, more and more businesses are coming here."

Smythson declined immediate comment on its tax status.