George Osborne has come under fresh pressure from Labour to explain his knowledge of the conduct of HSBC’s Swiss subsidiary and the extent to which the Treasury was aware that HMRC had decided to take a light-touch approach to seeking prosecutions for those suspected of tax evasion.
Labour is frustrated that the chancellor has avoided questions on the issue for a week, while both Ed Miliband and Ed Balls have been repeatedly pressed on relatively trivial issues such as whether they kept tax receipts for a window cleaner. Osborne spent Tuesday at a meeting of the European finance ministers Ecofin discussing the Greek eurozone crisis.
In a letter, the shadow chancellor asked whether the selective prosecutions by HMRC were approved by the Treasury. He pointed out that detailed information was passed to the coalition government in May 2010 about 1,100 HSBC clients allegedly guilty of tax evasion or avoidance and yet since then there had been just one prosecution.
Balls wrote: “In November 2012 a senior HMRC official told the Times that the government had adopted ‘a selective prosecution policy’ towards cases related to HSBC. Later that month HMRC told the public accounts committee that ‘another dozen’ criminal prosecutions were to follow. However, there have been none since.”
Balls also questioned why David Gauke, the Treasury financial secretary, told the Commons that the government was provided the data on HSBC activities in Switzerland by French authorities “under very strict conditions” – when the French finance minister has since suggested otherwise.
Balls also asked Osborne to explain how a Downing Street spokesperson came to claim last week that “no government minister” had any knowledge of what happened at HSBC, yet the chief executive of HMRC, Lin Homer, has since said she believed that ministers were in fact informed about these files after they were received.
Homer told members of the public accounts committee: “We are confident we will have told ministers that we were about to receive a big tranche of operational information. We will have told people, including ministers, I suspect some time in the next few months [after the data was received].”
Osborne was asked why he and David Cameron gave HSBC chair Stephen Green a Tory peerage and appointed him trade minister “several months after the government was given information from the French government in May 2010”. There had also been extensive public coverage of this investigation since 2010.
Balls also asked if Osborne or Cameron had ever discussed the issue of money laundering with Green, an allegation that first became public in July 2012 following an investigation by the US Senate homeland security subcommittee and which led to the bank being fined $1.9bn (£1.24bn) in December 2012.
“When were you and Treasury ministers first made aware of the findings of this inquiry?” Balls asked.
None of the questions break new ground, but they do suggest that – in the absence of a personal explanation from Green – the HSBC issue is going to remain a problem for the Conservatives throughout the election campaign.
This article was written by Patrick Wintour, political editor, for theguardian.com on Tuesday 17th February 2015 16.07 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010