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.