This morning Labour has written to the Chancellor George Osborne, following the Government’s failure to act on allegations of malpractice at HSBC.
 
A copy of the letter is below.
 
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Dear Chancellor,

It is essential that you answer urgent questions over this Government’s failure to act on allegations of malpractice at HSBC. There remain a number of outstanding questions following David Gauke’s inadequate answers in the House of Commons yesterday.

Failure to act

Detailed information was passed to the Government in May 2010 about over a thousand HSBC clients allegedly guilty of tax evasion or avoidance and yet since then there has been just one prosecution.

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.

Can you explain why only a single prosecution has been made given the scale if the alleged wrongdoing and what role Ministers played in deciding on “a selective prosecution policy” for those accused of tax evasion or avoidance? People would expect you to have at least been aware of a decision of this seriousness.

Lord Green

Lord Stephen Green was Chairman of HSBC 2006-2010 and was appointed a Conservative Peer in September 2010 and then as Trade Minister by David Cameron in January 2011.

Given that, as the Financial Secretary 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.

Can you provide details of the due diligence carried out by the Government in advance of Lord Green’s appointment concerning allegations against HSBC and Lord Green’s role in relation to them?

I hope you agree it is essential that we now hear from Lord Green himself about what assurances he gave on his appointment to be a member of the government and what he knew about the activities at his bank, so will you encourage him to do so urgently?

Communication between HMRC and Ministers

When the French authorities passed the HSBC caseload to HMRC in May 2010 we would expect the Government to have taken swift action. At what point were Ministers made aware of its existence, when did you and the Prime Minister personally find out, and what action was then taken?

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.

Yours,

 
Shabana Mahmood MP, Shadow Exchequer Secretary