Labour kept up the pressure over the government response to the HSBC banking scandal in Switzerland, accusing ministers of a deliberate policy of minimising prosecutions.
The party also asked fresh questions about the inquiries David Cameron made before appointing Stephen Green, the former HSBC chief executive and chairman, as a trade minister.
In a letter to George Osborne, the shadow Treasury minister Shabana Mahmood challenged the chancellor again to explain why there had been only one prosecution despite 1,000 people being challenged by HMRC over tax evasion or tax avoidance.
She 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. It seems HMRC took a deliberate strategy to minimise rather than pursue prosecutions, which would explain why just £135m has been recouped.”
She also asked about the due diligence undertaken in government before Green was made trade minister.
Green was chairman of HSBC between 2006 and 2010. He was appointed a Conservative peer in September 2010 before becoming trade minister in January 2011.
Mahmood wrote: “Given that, as the financial secretary [to the Treasury] David Gauke said yesterday, the government was made aware of allegations of wrongdoing against HSBC in May 2010, eight months before Mr Green’s appointment to government, failure to ask probing questions would have to be seen as wilfully negligent. As chairman of the bank, Mr Green would either have been aware of malpractice or, if not, surely questions would arise as to why not and his fitness for such a senior government post of trade minister.”
She adds it is essential the public hear an explanation from Lord Green and urges Osborne to press him to make a statement.
Labour is also seeking details of the terms on which the French authorities passed the HSBC caseload to HMRC in May 2010 including a requirement that the information was not passed to other government authorities even if criminal offences such as money laundering were apparent. Gauke said the French had only just lifted restrictions on this information being passed to other authorities.
She concludes “Without clarity over these matters, people can only conclude that the government has failed to act over the deeply serious matter of tackling tax avoidance and evasion.”
