Tories, Labour uncomfortable over HSBC revelations

[LONDON] Revelations that HSBC Holdings Plc helped clients avoid taxes through its Swiss private-banking unit were seized on by both major parties in Britain's election campaign in an effort to seek advantage.

The opposition Labour Party pointed out that Prime Minister David Cameron's Conservatives recruited former HSBC Chairman Stephen Green as a trade minister and put him into the upper, unelected House of Lords. The Tories fired back that Labour's finance spokesman, Ed Balls, was a Treasury minister at the time covered by the revelations that came in a report released Sunday by the Washington-based International Consortium of Investigative Journalists.

Margaret Hodge, the Labour lawmaker who chairs Parliament's Public Accounts Committee, questioned why there had been only one UK prosecution over the HSBC files, which have been in government hands since 2010, and attacked Mr Green.

"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," Ms Hodge told BBC Radio 4's "Today" program. "Either way he was the man in charge and I think he has got really important questions to answer." Mr Green, an ordained Church of England minister and author of two books on ethics and finance, told the BBC he wasn't going to comment on HSBC. He left his job as trade minister in 2013.

David Gauke, a Conservative Treasury minister, said that while Mr Green should answer questions about his time at HSBC, no evidence had been published showing he'd known about wrongdoing at the bank. He said tax evasion had been "far too prevalent" under the Labour governments in which Mr Balls served.

Mr Gauke said prosecutors had decided they'd be unlikely to secure convictions against HSBC's clients without corroborative evidence.

The UK's tax authorities said account data taken from HSBC in Geneva and shared with France and other governments brought in more than £135 million (US$205 million).

The HSBC leak began as a rogue operation by a computer technician, Herve Falciani, who left the company in 2008 with five disks of confidential information. A self-described whistle-blower, Ms Falciani provided details on the 100,000-plus accounts to French Finance Minister Christine Lagarde, now head of the International Monetary Fund. She passed details from the cache - which came to be known as the Falciani List or Lagarde List - to governments around the world.

"We have systematically worked through all the Lagarde data. As a result tax, interest and penalties have now been paid by those who hid their assets in Switzerland to get out of paying tax," Her Majesty's Revenue & Customs said in a statement. "The decision to prosecute is made by the Crown Prosecution Service based on the facts."

BLOOMBERG