​UK tax scandal: No 10 defends ex-HSBC chairman’s trade minister appointment

Prime Minister Cameron’s spokesman told the Guardian that Lord Stephen Green, who held the position of Britain’s trade minister between January 2011 and December 2013, had been an excellent choice for the position.

He added Cameron never discussed allegations faced by HSBC with the bank’s ex-chairman prior to his appointment as trade minister.

The allegation that HSBC aided wealthy clients in dodging tax in Britain has sparked a heated political row between the Labour Party and Cameron’s Tories.

Files disclosing the bank’s suspect actions were dispatched to Britain’s tax authority, Her Majesty’s Revenue and Customs (HMRC), in 2010. But Downing Street has so far failed to clarify whether ministers were aware of the allegations leveled at HSBC at the time.

Labour chief Ed Miliband says the government has “some serious questions to answer.” He accuses the HMRC of failing to take action on the information it received about HSBC in 2010.

Echoing Miliband, the chair of Britain’s Public Accounts Committee (PAC), Margaret Hodge, warned Green must disclose what he knows to the public.

“Either he didn’t know and he was asleep at the wheel, or he did know and he was therefore involved in dodgy tax practices,” she said.

Secretary to the Treasury David Gauke made an official statement to the House of Commons on Monday afternoon on what the government knew regarding HSBC’s activities during Green’s tenure.

Fractious exchanges between Labour and the Conservatives occurred as discussions evolved.

‘A tax evasion and avoidance service’

Following the leak of a massive cache of secret bank files, it emerged on Sunday that HSBC’s Swiss subsidiary helped wealthy customers hide millions of dollars’ worth of assets.

The leaked documents also revealed the Swiss arm of the bank had doled out untraceable funds and advised clients on how to best circumvent tax authorities across the globe.

The files were unearthed during a cross-border investigation carried out by over 45 international news outlets, including French newspaper Le Monde, the International Consortium of Investigative Journalists (ICIJ), the Irish Times, BBC Panorama and the Guardian.

They revealed that HSBC’s Swiss banking arm 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.

Green has repeatedly refused to comment on the damning revelations uncovered by the ICIJ.

“As a matter of principle I will not comment on the business of HSBC past or present,” he told the BBC on Sunday.

In a formal statement, HSBC told the Guardian it acknowledges and is accountable for previous compliance failures.

HSBC argued its Swiss subsidiary was never fully integrated into the banking giant’s regulatory architecture following its purchase in 1999. This meant it became a center of depreciated compliance standards and eroded due diligence.

Richard Brooks, a global tax expert and author of The Great Tax Robbery, said HSBC’s Swiss banking arm were effectively “a tax avoidance and evasion service.”

“They knew full well that people come to them to dodge their tax liabilities,” he added.