Former trade minister

Green resigns from City lobby group amid HSBC tax avoidance scandal

Stephen Green(Updated) Lord Green, who has been at the centre of the HSBC tax avoidance scandal, has resigned from a financial services lobby group.

He said he had decided to step down as unpaid chairman of TheCityUk’s advisory council with immediate effect.

Green was chairman of HSBC from 2006 until 2010 before being appointed trade minister in 2011, a position he held until 2013. His time at the bank coincides with the period when it was alleged to have helped thousands of people avoid paying tax in to their domestic revenues.

Sir Gerry Grimstone, chairman of the lobby group, said: “He doesn’t want to damage the effectiveness of TheCityUK in promoting good governance and doing the right thing so has decided to step aside from chairing our Advisory Council. This is entirely his own decision.”

Sir Gerry, who is also chairman of Standard Life, described Green as “a man of great personal integrity who has given huge service to his country and the City.”

HSBC is said to have advised clients through a Swiss private bank and has admitted to failings in compliance and controls.

Shadow treasury minister Chris Leslie said: “We need a full and frank statement from Lord Green explaining what he knew about what was happening while he was in charge of HSBC.

“There are also mounting questions for ministers, which continue to go unanswered. Did David Cameron and George Osborne discuss tax evasion at HSBC with Lord Green? The Prime Minister failed to answer this four times in the House of Commons this week.

“Why did they appoint Lord Green as a Tory minister months after the Government received these files? Why have we only had one prosecution out of 1,100 names? And why did George Osborne and the Treasury sign a deal with the Swiss in 2012 which prevents the UK from actively obtaining similar information in the future?

“It is time we finally had answers from David Cameron and George Osborne.”

Labour leader Ed Miliband, who has been speaking at the party’s conference in Wales, welcomed Lord Green’s decision to step down.

“I think it is right that he has done that. I think the bigger question is David Cameron and the questions he has got to answer,” he said.

“He has still not accounted for why he appointed Lord Green in the first place, when it was already public knowledge about what happened at HSBC.

“He has still not explained whether over the three years or so that Lord Green was a minister, whether he actually asked about what was going on about HSBC when it was public knowledge.

“The questions are mounting for David Cameron to answer.”

The bank’s chief executive Stuart Gulliver said on Friday that HSBC had sometimes failed to live up to the standards expected of it.

Executives of the bank are expected to be questioned by members of the Treasury Select Committee this month.

New measures to clamp down on bankers helping their wealthy clients to avoid paying tax are expected to move up Downing Street’s agenda to prevent further embarrassment ahead of the General Election.

Prime Minister David Cameron claimed his government had made big strides to tackle those who abuse the tax system.

But Opposition MPs and taxpayers’ groups demanded more is done to bring wayward bankers into line, starting with a proper investigation by the authorities leading to prosecutions and banning orders on those found guilty.

There is growing concern that the regulators themselves are tainted or else not in a position to offer appropriate judgement.

The calls for action to be taken came as more evidence emerged that the British tax office knew about wrongdoing at HSBC’s Swiss bank before Mr Cameron appointed the executive chairman of its parent bank, Stephen Green (pictured), a government minister.

Information published by The Guardian as part of a joint media investigation reveals that the French tax authorities passed leaked Swiss data containing at least 6,000 British names to HMRC in May 2010 just a few months before Lord Green was appointed trade minister in the House of Lords.

Green, who declined to answer questions about the newly-revealed allegations when confronted by a reporter from the BBC’s Panorama team, was executive chairman of HSBC from 2006 to 2010. The current management has now admitted that serious “compliance and control failures” took place at the Swiss private bank before January 2011 when chief executive, Stuart Gulliver, took over.

Thousands of documents from the private bank that HSBC acquired in Switzerland show how it routinely advised rich account holders how to circumvent their domestic tax authorities.

The documents have been exposed in a joint investigation involving the French newspaper Le Monde, the Guardian, BBC’s Panorama, the Washington-based International Consortium of Investigative Journalists and more than 50 other media organisations around the world.

Avoiding tax is is not illegal, but many have been used to conceal cash from tax authorities and evasion is illegal. The documents are said to have been stolen in 2007 by a computer expert working for HSBC in Geneva, contain details of more than 100,000 clients from around the world.

The French authorities are said to have assessed the stolen data and concluded in 2013 that 99.8% of their citizens on the list were probably evading tax. There are said to be between 6,000 and 7,000 British clients among those listed.

HM Revenue and Customs was handed the leaked data in 2010 and identified 1,100 people who had not paid their taxes. But only one tax evader has been prosecuted.

HSBC said it has now “fundamentally changed” and denies that all the account holders were evading tax. In 2007, HSBC, the Swiss private bank had 30,412 accounts. At the end of 2014 it had reduced that number to 10,343.

It said has implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money.


Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.