Shabana Mahmood MP, Labour’s Shadow Exchequer Secretary, has today written to David Cameron after his failure to answer questions on tax during Prime Minister’s Questions.
The full text of the letter is below:
12th February 2015
Dear Prime Minister,
After your failure to answer questions in the House of Commons yesterday, I am writing to urge you to clarify the growing confusion over ministerial communication with HMRC regarding the allegations of tax evasion by UK clients of HSBC.
Earlier this week your spokesperson said “no government minister” had any knowledge of the allegations of tax avoidance involving UK clients of HSBC.
“No government minister had any knowledge that HSBC may have been involved in wrongdoing in regard to its Swiss banking arm prior to the reports of the last couple of days”.
A spokesperson for David Cameron, Financial Times, 10 February 2015, http://www.ft.com/cms/s/0/673c33c6-b12f-11e4-831b-00144feab7de.html#axzz3RTSNXFmJ
Yesterday, however, the Chief Executive of HMRC Lin Homer told the Public Accounts Committee that HMRC would have told Ministers about the leaked client information before or after receiving it. She stated:
“We are confident we will have told ministers that we were about to receive a big tranche of operational information,” she said. “We will have told people, including ministers, I suspect some time in the next few months [after the data was received].”
Lin Homer, Chief Executive HMRC, Public Accounts Committee, 11 February 2015
This comes after extensive public coverage of this investigation since 2010. On 26 September 2010, the Sunday Telegraph reported that HMRC is investigating more than 200 “extremely wealthy” British taxpayers suspected of tax evasion totalling “many millions of pounds”. It adds that they are “believed to have failed to declare huge sums of interest from private deposit accounts with HSBC’s bank in Switzerland.” (Sunday Telegraph, 26 September 2010, http://www.telegraph.co.uk/finance/personalfinance/expat-money/8025527/HMRC-launches-tax-evasion-probe-into-Swiss-account-holders.html).
On 13 October 2011 HMRC announced that its officials were targeting some 6,000 UK-based Swiss bank account holders, something the current Financial Secretary himself has commented on.
Revenue targets 6,000 Swiss bank accounts
HM Revenue & Customs (HMRC) will shortly begin writing to UK residents and organisations holding Swiss bank accounts with the HSBC in Geneva who may not have reported all their income and gains to HMRC.
The department is acting on information received last year under a tax treaty. This revealed that more than 6,000 individuals, companies, trusts and other bodies held accounts and investments with HSBC Geneva.
…
The work will be led by HMRC’s new Offshore Co-ordination Unit, which has recently been established and will become fully operational next month.
Exchequer Secretary to the Treasury, David Gauke, said: “The Government has shown its commitment to closing the tax gap by making an additional £917million available to HMRC to tackle evasion, avoidance and fraud. This will fund the new Offshore Co-ordination Unit, and its specialist teams, which will drive forward this work.”
HM Revenue & Customs, 13 October 2011 10:13
http://webarchive.nationalarchives.gov.uk/20120405135325/http://nds.coi.gov.uk/clientmicrosite/Content/Detail.aspx?ClientId=257&NewsAreaId=2&ReleaseID=421582&SubjectId=36
On 25 July 2012 it was reported that Herve Falciani was arrested. On 29 July 2012 Labour’s Chris Leslie called on the Government to “set out what they know about” this case. In both November 2012 and July 2014 this case was discussed at the Public Accounts Committee.
We now know that HMRC informed Ministers of this case before prolonged public coverage of its details. It is now inconceivable that no Minister was aware of a case of such magnitude, as your office has claimed, and the Government’s position invites nothing but ridicule.
It is vital that you respond to the following questions:
• Which ministers were first informed by HMRC of the leaked HSBC client data, when they were informed, and what subsequent action was taken in response to the receipt of this information?
• During government communications with the Lords Appointments Commission and the Cabinet Secretary over the appointment of Stephen Green to Trade Minister, was the issue of tax avoidance allegations at HSBC raised?
• What assurances did you seek from Lord Green about his knowledge and involvement in the case prior to his appointment, and what discussions were had with him subsequently about this case?
Without clear answers to these, people will conclude that, rather than act on wrongdoing, you looked the other way and instead brought the former Chief Executive of HSBC in to the heart of your government without asking important and necessary questions. This would be, once again, a lack of judgement and leadership.
Given the importance of these questions I am sure that you will want to set the record straight as soon as possible.
I look forward to hearing from you.
Kind regards,
Shabana Mahmood MP