View more on these topics

Ed Balls demands answers on HSBC ‘tax-dodging’ revelations

Labour shadow chancellor Ed Balls says the Goverment must answer “serious questions” following revelations about HSBC’s role in helping up to 1,100 UK clients evade tax.

A BBC Panorama investigation claimed the bank’s staff had aided more than 100,000 customers worldwide in dodging their tax bills, with HMRC passed a list of 1,100 suspicious UK accounts in 2010

However, since then, only one of the individuals has faced prosecution.

“There are very serious questions for George Osborne and David Cameron to answer today,” says Balls.

“Why, in the five years since this government was first given information about how HSBC helped people evade tax, has there only been one prosecution out of 1,100 individuals identified? 

“And why did they appoint the chairman of HSBC as a Tory minister eight months after the Government was told about the bank’s activities?”

HSBC chairman Stephen Green was appointed as minister of state for trade and investment in January 2011.

Balls adds: “Nobody will fall for yet more desperate distraction tactics from George Osborne and the Tories when it is clear that this information was first given to the Government in 2010.

Labour MP for Birmingham Ladywood Shabana Mahmood has reportedly tabled an urgent question on the prosecutions for tax avoidance in this afternoon’s session at the House of Parliament.

“We need to understand whether actually HMRC have been putting lots of cases before the Crown Prosecution Service and it’s the CPS who’ve been refusing to prosecute and those are questions that I hope that the government will answer,” Mahmood told the BBC.

In a statement responding to the revelations, HSBC says that since the list of more than 100,000 clients was first leaked, it had implemented numerous reforms to prevent tax evasion and money laundering.

“We have taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance,” the bank says.

“We have also refocused our Swiss private bank on clients from strategic markets of the group, such as owners and principals of the group’s commercial banking clients. As a result of this repositioning, HSBC’s Swiss private bank has reduced its client base by almost 70 per cent since 2007.”

The bank adds: “We are fully committed to the exchange of information with relevant authorities and are actively pursuing measures that ensure clients are tax transparent, even in advance of a regulatory or legal requirement to do so.

“We are also cooperating with relevant authorities investigating these matters and we acknowledge and are accountable for past control failures.”

Responding to Mahmood in Parliament, financial secretary to the Treasury David Gauke said that many of the individuals accused of tax avoidance could not face criminal charges due to a lack of evidence.

“When cases have been taken to the CPS, they have taken the view that a successful prosecution would be unlikely without more collaborative or additional evidence,” Gauke said, adding that the tax office continues to consider civil penalties “as the most cost effective way of collecting revenues and changing behaviour”.

Gauke also hit back by noting that the evasion took place between 2005 and 2007, under a Labour government in which Balls served as economic secretary to the Treasury, claiming that the Government forecasts to deliver a tax yield of £26bn for 2015, up from £17bn in 2010.

“Despite all the bluster, the numbers point to the fact that this Government is more successful in dealing with these matters than the previous governments,” Gauke said.


News and expert analysis straight to your inbox

Sign up


There are 11 comments at the moment, we would love to hear your opinion too.

  1. E L Wisty (an only twin) 9th February 2015 at 3:57 pm

    Ed is being slightly disingenuous here, as he was the responsible minister at the time this first came to light. So when it comes down to it, it not Osborne at all – it’s all Balls.

  2. Remind me again weren’t Labour in office for 10 years and wasn’t Ed balls working in the Treasury as a junior minister, maybe he would like to answer some questions of what Labour did to cut out tax evasion when they were in office – me think people in glass houses should not throw stones.

  3. Chairman of this bank was appointed as a conservative government minister.
    Only 1 person out of thousands prosecuted.
    Its not hard to work out.

  4. Much as I dislike Balls, I would dearly like to hear the answers to these questions, which all appear entirely fair to me.

  5. Balls is a pain, but i think he’s got a point here. It was pretty lame of David Gauke to start calling for him to explain his role – a bit like when Osbourne asked him to explain his role in the LIBOR fixing scandal.

    Anyone would think the Tories had something to hide – one prosecution out of a thousand is pathetic, to say the least.

  6. Are the FCA making any comments? This particular bank has its head office in the UK despite many threats to leave. More widely, I understand that a significant part of the general reduction of funds held in Swiss bank accounts with various banks is due to the relocation of those funds to accounts with branches of the same banks in other locations with even less stringent rules than Switzerland. I have a client who was quoted £52000 by their Swiss bank to relocate their funds and keep their history secret from the British authorities. Fraud if you or I gave advice like that and quite easy to investigate if the Swiss are serious about openness ! Tax fraud, terrorism, drug dealing and general criminality are all potential issues when any bank puts profit before morality.

  7. @Peter – NUlibor were to busy planning illegal wars to worry about where the funding was coming from so how would they have had time to look at tax evasion when focused on illegal invasion?

  8. Oh I do however agree with Soren – “I would dearly like to hear the answers to these questions, which all appear entirely fair to me.” (I have never met Ed Ball, so I can’t say whether I’d dislike him or not).

  9. Interesting allegations against Ed Balls but if the information was only made available to the UK authorities sometime in 2010 and required investigation by HMRC there is no way that Balls would have been in a position to act before Labour were out of office. Even a straightforward tax enquiry takes longer than that. HMRC have a lot of questions to answer in the light of successful prosecutions of the bank and individuals elsewhere. Could somebody remind me who it is that the head of HMRC at the relevant time is now working for? Not of course that that would in any way be connected!

  10. Avoidance and evasion only make up 25% of the tax shortfall. We isn’t the focus on the other 75%?

  11. Sorry Sean but that is one of the daftest comments that I have ever read. Firstly the two aspects are not mutually exclusive, secondly, how can you estimate tax loss due to avoidance and evasion when by definition these are amounts that are not found and thirdly, if you do not seek out and punish wrongdoers then wrong becomes normal and eventually is accepted as being right. No tax means no nhs, no army, no state pensions, no bin men, or in other words anarchy.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm