George Osborne faces mounting pressure over the HSBC tax evasion scandal after Business Secretary Vince Cable demanded that the Chancellor disclose whether he was sufficiently vigilant when it came to inquiries into the bank’s disgraced Swiss arm.
Cable said he had
written directly to Osborne to ensure that various probes into
Britain’s government tax authority, HMRC, had been dealt with
adequately.
The Business Secretary’s disclosure surfaced as a scandal-ridden
HSBC released a series of press advertisements to offer its
apologies for the conduct of its Geneva-based subsidiary.
The advertisements were issued after HSBC was engulfed by
controversy over its alleged involvement in industrial scale tax
evasion.
On February 8 it emerged that HSBC’s Swiss private banking arm
had aided royalty, criminals, terrorists, and drug dealers in
dodging taxes.
A colossal cache of files leaked to the International Consortium
of Investigative Journalists (ICIJ) shed light on the banking
giant’s clandestine practices between 2005 and 2007.
During this period, HSBC’s Swiss private banking arm controlled
roughly $100 billion in assets.
The leaked documents indicated that HSBC’s Swiss subsidiary had
aggressively promoted schemes that could enable wealthy clients
to dodge European taxes, and had colluded with others to hide
undeclared accounts from tax authorities worldwide.
After the scandal surfaced, Osborne and his team of treasury
ministers maintained Shadow Chancellor for the Exchequer Ed Balls
bore responsibility. Balls held the position of City Minister in
2006-07.
Following a series of allegations levelled at the Tories since,
however, Osborne and his treasury officials have maintained a low
profile.
Osborne under pressure over HSBC @guardian Not “an unusually
low profile”. Osborne always goes awol when heat is on.
http://t.co/Pz4iFWIkSk
— Rob.Lackenby (@Butsurelynot) February
16, 2015
The leaked HSBC files cast an ominous hue over the Conservatives
after the Guardian revealed up to seven Tory donors legally held
bank accounts with HSBC’s Swiss arm.
Conflict of interest allegations were also levelled at the party
with respect to ex-HMRC chief Dave Hartnett’s trajectory from
government tax chief to head of HSBC’s financial crime committee.
READ MORE: UK tax scandal:
No 10 defends ex-HSBC chairman’s trade minister appointment
Hartnett was HMRC’s chief executive when it dealt with leaked
evidence implicating HSBC in tax evasion activities. He was
subsequently appointed as a Conservative government minister in
2011.
In his letter to the Chancellor, Cable asked Osborne why there
had been so few criminal prosecutions when the government had
been presented with clear evidence of tax evasion. He also asked
what actions were being taken to regain lost tax revenue, and
what lessons had been learned from the scandal.
The Business Secretary condemned HMRC for taking a tough approach
to ordinary taxpayers, while virtually turning a blind eye to
large corporations’ tax dodging.
George Osborne under pressure from Vince Cable over HSBC
scandal http://t.co/vx6ZDEmMa8
— alan rusbridger (@arusbridger) February
15, 2015
Cable’s intervention coincides with Liberal Democrat Chief
Secretary to the Treasury Danny Alexander’s letter to HMRC asking
whether the tax authority was robust enough.
In the letter, Alexander asked whether HMRC needed additional
legal powers, whether the British government should devise new
criminal offenses for those who conspire to enable tax evasion,
and whether additional resources to tackle tax dodging are
required.
HMRC is yet to issue a response.
Downing Street has rejected widespread calls for an official
inquiry into HMRC’s handing of 3,000 suspected tax evaders with
accounts at HSBC’s Swiss private banking arm.
Since the HSBC scandal broke, two petitions have been launched
calling upon the British government to seek criminal prosecutions
against those implicated in tax dodging.
One petition, hosted by Change.org, has accrued 43,917 signatures
to date. The other petition, organized by 38 Degrees, has
gathered 90,529 signatures.
Downing Street rejects inquiry into handling of HSBC files
http://t.co/JlmvcnIfLJ Now
there’s a surprise
— Richard Murphy (@RichardJMurphy) February
16, 2015
Richard Brooks, a global tax expert and author of The Great Tax
Robbery, previously described HSBC’s Swiss subsidiary as “a
tax avoidance and evasion service.”
In HSBC’s apology, printed in leading UK newspapers, the bank’s
chief executive Stuart Gulliver conceded society expected more of
the banking giant.
He stressed, however, the leaked files which cast light on HSBC’s
involvement in tax dodging related specifically to events that
occurred eight years ago.
Gulliver claimed the bank has fundamentally changed in how it
operates and has “absolutely no appetite” to conduct
business with white collar criminals or clients involved in tax
evasion.