With leaked documents on the HSBC scandal spilling the names of British account holders in the Swiss branch of the banking giant, now accused of enabling tax evasion and avoidance, the issue has become ready political ammunition for leading political players in Britain who are fighting the election this year.
The government has denied prior knowledge of wrongdoing by the bank, which according to the documents helped its big clients evade domestic tax laws, hide assets, and distribute huge sums of untraceable cash. The Guardian on Wednesday has reported that officials from Britain’s tax authority knew about serious wrongdoing by the bank as early as 2011.
In the Prime Minister’s question hour on Wednesday, David Cameron had to face some tough questioning from Opposition benches on his knowledge of the affair and his appointment of Stephen Green, formerly head of HSBC, as a Minister even after it was publically known that HSBC was enabling tax avoidance. Mr. Green was subsequently made a peer.
Labour leader Ed Miliband said that Mr. Cameron was “surrounded by dodgy donors,” and asked him to explain how seven of his party donors had accounts in the bank. “It was in the public domain in September 2010 that HSBC was enabling tax avoidance on an industrial scale. Are we seriously expected to believe that when he made Stephen Green a Minister four months later he had no idea about these allegations,” Mr. Miliband asked.
Mr. Cameron’s punchy replies sought to deflect this issue and focus on his government’s enforcement of tax laws instead. “Why did Labour welcome Stephen Green as a Trade Minister? Why were they still booking meetings with him in 2013? My responsibility is the tax laws of this country. And no one has been tougher,” he said.
While the names of those who have HSBC accounts have been made public, a fall out of the scandal has been that the names of those who hold accounts legally are clubbed with those who have indulged in fraudulent practices.
The chief of Britain’s tax authority was to face the Commons public accounts committee later on Wednesday.
