HSBC scandal: 4 questions David Cameron needs to answer

Why did the PM miss so many opportunities to act on the allegations against the banking giant?

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The full scale of HSBC’s tax abuses has come to light today, with leaked files suggesting that malpractice at the Swiss subsidiary has helped wealthy clients evade and avoid hundreds of millions of pounds worth of taxes.

The documents were originally obtained in late 2007 by one of HSBC’s employees Hervé Falciani, who blew the whistle on the banking giant. Falciani, who was indicted by Switzerland in 2014 for industrial espionage, said that HSBC had ‘created a system for making themselves rich at the expense of society, by assisting in tax evasion and money laundering’.

Indeed, the gravity of HSBC’s alleged misconduct has been known for years, including to the British government. It is for this reason that David Cameron has some serious questions to answer today. We need to ask the prime minister:

1. In 2010, the government was handed information about the malpractice at HSBC. Why did you take no action?

In 2010 the French authorities used data provided by Falciani to prepare lists of leaked accounts to pass to tax authorities in relevant countries. The ‘Lagarde list’, as it became known, led to arrests in Greece, Spain, the US, Belgium and Argentina.

HMRC received a list with the names of more than 1,000 individuals believed to be evading tax. Only one of these people was prosecuted. Richard Brooks, a former HMRC tax inspector and BBC reporter, has said that the Treasury and HMRC ‘knew that there was a mass of evidence of tax evasion at the heart of HSBC’ but ‘simply washed their hands of it’.

 2. In 2010 you appointed Stephen Green, former chairman of HSBC, as a minister in your government. Did you ask him about his involvement in the misconduct, of which you must have been aware at the time?

Stephen Green had presided over HSBC at the time of the controversy, and in 2010 was appointed minister of state for Trade and Investment and made a Tory peer. His responsibilities were extensive and included speaking for the government on trade and investment issues, coordinating European business and developing cross-government strategies.

In light of this it seems astonishing that nobody thought to question him about his involvement in practices such as marketing tax-avoidance strategies to wealthy clients. Prior to his appointment, Green had gone on a trade mission to India with David Cameron where they reportedly discussed his recruitment.

On the Today programme this morning (9 February 2015), Treasury minister David Gauke said he did not know whether anybody had questioned Green about his knowledge of the malpractice:

“It is not for me to say, I don’t know.”

Do David Cameron and George Osborne know?

3. Do you believe now that Stephen Green was aware of what was going on at HSBC at the time of his chairmanship?

The chair of the Public Accounts Committee Margaret Hodge pointed out this morning on the Today programme that either Green didn’t know about the malpractice and was therefore ‘asleep at the wheel’, or he did know and was therefore colluding with ‘dodgy tax practices’.

Which does the prime minister now believe to be true? Does he accept that in either case he did not hire the best candidate for the position?

As reported by The Guardian today, the malpractice includes: providing accounts to international criminals; allowing clients to withdraw ‘bricks’ of cash in foreign currencies; aggressively’ marketing  European tax avoidance schemes; and colluding with clients to conceal undeclared accounts from their domestic tax authorities.

4. How will you respond to the latest allegations about HSBC?

It is the opinion of Margaret Hodge that ‘we are never assertive enough, aggressive enough, determined enough to actually protect the taxpayer’. HSBC has been colluding with extremely wealthy individuals who do not want to pay the taxes that the HMRC requires them to. With a persistent deficit, the government needs to take assertive steps towards protecting the interests of ordinary taxpayers against the greed of the super-rich.

Will David Cameron and George Osborne take these steps, including making appropriate prosecutions?

Ruby Stockham is a staff writer at Left Foot Forward. Follow her on Twitter

34 Responses to “HSBC scandal: 4 questions David Cameron needs to answer”

  1. peterb

    As a Swiss subsidiary the Chairman of the HSBC Group would not be aware of the details. Please understand what a fkg subsidiary is and learn about Swiss private banking secrecy laws.

    why under 13 years of Labour, Brown, Miliband & Ed (City Minister) Balls-up did banks and others have no real guidance on banking/ financial regulations

  2. David Lindsay

    I found it many things, but not surprising, that when the courtier papers went looking for drugs and prostitution hand in glove with party political connections in high finance, allegedly the only example turned out to have been at the Co-op. As the young people used to say, “Yeah, right!”

    Now, how about some investigation into The Reverend Prebendary The Lord Green of Hurstpierpoint? He is an Anglican clergyman in good standing, whereas the Methodists have long since suspended Paul Flowers indefinitely. He was Minister of State for Trade and Investment until December 2013, whereas Ed Miliband has met Flowers only once, while Ed Balls has never met him. He was already the former when he was Chairman of HSBC and it was laundering money for the drug cartels of Mexico and Colombia.

    As, indeed, when it was doing the things for which it stands exposed tonight.

    Lord Green also produced the Church of England’s recent report on spotting and grooming clerical talent. His wisdom is therefore now to be applied in choosing the custodians of many of this country’s most important historic buildings, in choosing the authorities responsible for vast landed estates and investment portfolios, in choosing the media’s and many public bodies’ go-to sources of moral and spiritual guidance, and in choosing the occupants of 26 seats in the Parliament of the United Kingdom.

  3. snorx

    what banking legislation did Labour introduce in 2004? what were it’s inadequacies? fkg or not.

    BBC R4 World at One reported that HMRC was offered the data in 2007 but turned it down. It didn’t then receive it [in a situation wherein it cdnt again turn it down] until 2010. Tory first wave of defence is claiming that [the first offer] happened during a Labour government. Any views on that?

    Information about HSBC subsidiary UK customers is that there are 1300- would you expect this list to be published?

    A lawyer on W-at-1 suggested that definitely from January 2013 onwards could HMRC [and ther UK regulatory agencies] could have expected to get 100% co-operation from Swiss authorities. Do you expect HMRC to have completed investigations by now?

    Cameron’s office have stated that there was no conversation on this with departing HSBC boss Stephen Green before/when he was offered a peerage and ministerial role. How similar is this to the induction of former communications adviser Andy Coulson? Is due diligence dead or too much of a fag for ailing Tory PM Cameron?

  4. Guest

    Given your Tories wanted less regulation, as you try and handwave the issue away… “oh, he couldn’t have known”.

  5. Leon Wolfeson

    “could have expected to get 100% co-operation from Swiss authorities.”

    Hardly. The international treaty for that was undermined by, er, the UK’s Coalition. Specifically a Mr. Cameron, who cut a unilateral deal highly favourable to tax evaders.

  6. Cole

    Are you seriously saying that HSBC can’t be expected to have any knowledge about what’s going on it their subsidiaries? Pull the other one. Do you actually know anything about business?

    And you’re not going to get away with trying to blame this on the Labour Party either. Of course – with the venefit of hindsight – they should have done more, but the Tories were strongly in favour of light regulation, as ever.

  7. peterb

    Yes, I obviously know more than you or Ed Balls and Labour about Swiss private banking secrecy laws as they were back in 2005-7 when Labour were in office, the lights were on but they were all out at sea.

    Yes the Tory party wanted some regulations lifted that Brown was imposing, but not anything that would have affected this or the Labour crash.

    Remember Northern Rock was a 100% Labour bad regulatory event. First Run on a bank for over 100 years..

    I suggest you read up on Swiss banking laws.

  8. peterb

    learn about Swiss banking laws sunshine. less regulation is a little disingenuous, they wanted some aspects toned down, nothing to do with this type of event.

    Ed missing balls & labour have this sticking to them. oh by the way Green was a special business adviser to Hmmm Gordon f*ckwit Brown.

  9. Guest

    And you leap right to defence of hiding cash, as you try and deny the Tories intentions.

    You keep plastering your **** to everyone else, frantically, as you note that even a “f*ckwit” avoided the depression your beloved Coalition caused.

  10. Guest

    100%, right. Never any issues with Thatcher’s regs, blah blah,.

    You keep talking about your piracy of tax cash, as you say that lifting basic rules did nothing, and lifting more would have done nothing more.

    And of course you want people to waste their time reading why you think hiding tax money is good.

  11. Selohesra

    The single dip recession was on Labour’s watch – no double dip, no triple dip, no depression for the coalition. I know it disappoints you Leon but you just have to get over it

  12. David Davies

    How soon before these tax-dodging fraudsters are taken out to lunch, at public expense, then let off their liabilities – a la Vodafone? It was only last week that these criminals were begging to charge us for our current accounts, otherwise they would have to dream up some more fraudulent wheezes. I do not suppose hat it is any coincidence that there is a sudden need to arm the police with tasers.

  13. Cole

    So Green can’t have been expected to know anything about the stuff going on in his Switzerland subsidiary, or HSBC laundering money for Mexican drug cartels or anything else much, I suppose. Funny that the US slapped a $1.9 billion fine on the bank afrer the Mexico fiasco (it was actually much worse than that).

    Still, Green now a Tory politician, so has to be protected by these ludicrous assertions – which won’t wash. The world of tax dodging by Tory types is about to come crashing down.

  14. Cole

    In case you hadn’t noticed there was a worldwide recession after 2008. Gordon Brown didn’t cause the US economy to crash.

  15. blarg1987

    There is a substantial difference between less regulation, which was what the Conservatives cried out for when in opposition and better regulation which is what you are implying they were after.

    They demanded the former and not the latter so it is questionable as to if they would have been better at the time.

  16. steroflex

    Margaret Hodge! What a paragon of virtue there.
    Allow me to remind you: tax avoidance: legal: tax evasion: illegal. If you do not have to pay tax, then nobody does.
    Leon, my dear old chap, I am an OAP.

  17. peterb

    Idiot, we have not been in a depression, in fact we have not even been in recession since the Tory led coalition came to power.
    But hey, lefties do not let actual facts get in the way of your warped ideology

  18. peterb

    No , but he did cause Northern Rock to crash. Bradford & Bingley & Alliance & Leicester and was borrowing (deficit) at the top of an economic cycle.

    Gordon Brown is so economically illiterate he should be resident in the Tower of London

  19. peterb

    When socialists fuck up blame Thatcher. You lefties are struggling big time.

    Next you will be saying Thatcher made Harman,Dromey & Hewitt Paedo friendly at NCCL. Or she was responsible for Rotherham ( Labour one party corrupt state)

  20. peterb

    It was the biggest deepest recession revised down at -6.2% never let Labour forget

  21. Faerieson

    Your confrontational comments do not aid the debate, neither do they suggest any greater insight. I would suggest that the global finance sector is far more alarming than you imply. That Stephen Green’s dubious history might ‘tie’ his dealings to both Labour and the Tories- the Lib-Dems almost do not matter- suggests that British Governments across the board have been marching, very much, to the beat of a different drum. Western society does not become quite so divided over just one or two terms.

  22. Selohesra

    I was responding to Leon’s comment “…. the depression that your coalition caused ” – firstly no depression; secondly I did not vote for them so not my coalition; thirdly you can hardly blame coalition for everything – some things are longer term & stem from time when we had Labour government

  23. Cole

    And there wasn’t a recession in any other country, I suppose. You right wingers really are idiots.

  24. Cole

    I expect Gordon Brown caused all those other banks to crash in the US and Europe too. I think it’s you who is an economic illiterate, blinded by your daft right wing venom.

  25. Guest

    That was a recession. The UK was recovering.Then your coalition plunged the UK into a drepression.

    I must “get over” the facts, as you spout off your propaganda, as ever, Lord Blagger.

  26. Guest

    You were chanting the same old lies, and of course you need to blame austerity on anything but the cause, as you remind people that the Coalition are far, far to leftist for you.

    Thanks, Lord Blagger.

  27. Guest

    Ah, so you deny basic facts, as you show that you’re not warped, but actively malevolent, pushing an Orwellian revisionist history.

  28. Guest

    Ah yes, end democracy by making not being far right enough a crime.

    You keep blaming everything on everyone else, as usual, as you moan about the economy being in better shape than where the Tories left it before the crisis, then moan that the banks were not allowed to fail (while moaning they failed), blah blah..

  29. Guest

    Magical socialists, as ever.

    You then attack democracy, and point out the people too good for you.

  30. Selohesra

    I must admit to being rather flattered that you think it appropriate to ennoble me as a Lord – I’d have thought you didn’t approve of such titles

  31. blarg1987

    New Labour was not a Socialist party. If you implying it loosely then the whole world is socialist.

  32. davidhill

    They are all liars at the top. It is part of their psychopathic denial mindset to deny everything and to blame all others. It is a trait that all business and political leaders have.

    But as Cameron et al would say, we are all in it together…period ! For who would make a person who led HSBC a Lord when it was known what HSBC had done months before he received his peerage?

    But how can the world’s people hope to provide a peaceful world order with the rich and powerful running the show as they like. Indeed the ‘show’ is at the direct detriment of 90% of the world’s populous including those in the west. For if we have one law for the rich and powerful and another for the majority of people, the system will eventually disintegrate as all empires have done so in the past.

    ‘The KINGS of KINGS and Masters of Humankind’s Ultimate Kismet – the ‘New’ WORLD ORDER that will eventually dispatch Humankind to Oblivion and its Ultimate Extinction – The Greed of the Few Combined with Our Planet’s Natural Resources Running Out will make this Inevitable…We have to Change Our Development Mechanism from Corporate Globalization to Sustainability before we have Used Up ‘All’ the Non-Replenishable Natural Resources of the World…the planet belongs to all of us NOT the Few ! ‘ –
    http://worldinnovationfoundation.blogspot.co.uk/2014/08/the-kings-of-kings-and-masters-of.html

    We simply have to change the global system before unsustainability and inequality destroy the world as we know it and we take all the dire future consequences of our creative neglect on-board.

  33. Guest

    Lord Blagger, how does that stop you being rich and hence due to pay tax?

  34. Guest

    Goes to show you don’t know how I think, as ever.

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