Ed Miliband attacks 'dodgy' PM for failure to answer HSBC tax questions

http://www.theguardian.com/politics/2015/feb/11/hsbc-files-ed-miliband-revolving-door-tories

Version 0 of 1.

Labour has accused David Cameron of acting as a “dodgy prime minister” after he repeatedly failed in the House of Commons to say whether he had discussed tax avoidance at HSBC with Stephen Green before appointing him as trade minister in 2011.

Downing Street insisted correct procedures were followed, but was forced to defend the prime minister’s role in appointing Green in January 2011 after the prime minister sidestepped questions at prime minister’s questions from four Labour MPs – one from Miliband and three from backbenchers – about whether he had spoken to the peer about tax avoidance at HSBC.

Related: Stephen Green row: David Cameron's key exchanges in PMQs

In his most detailed response – to Sharon Hodgson, the Labour MP for Washington and Sunderland West – the prime minister said: “When I appointed Stephen Green every proper process was followed. I consulted the cabinet secretary, I consulted the [cabinet office] director for propriety and ethics and, of course, the House of Lords appointments commission now looks at someone’s individual tax affairs before giving them a peerage.

“I made the appointment, it was welcomed by Labour and three years later they were still holding meetings with him.”

Cameron appointed Lord Green to the House of Lords and to his government as trade minister in January 2011, four months after HMRC was passed the leaked files that showed HSBC’s Swiss subsidiary was involved in aiding tax avoidance.

Labour had accused the prime minister of acting in a ludicrous manner for failing to say whether he had spoken to Green about tax avoidance at HSBC, after the government’s claim that ministers had no idea about the allegations at the time of his appointment.

“I would use the word ludicrous,” a Labour spokesman said of the prime minister’s refusal to answer the question directly on four occasions.

“You are appointing someone to be minister of trade. You are appointing them literally within months of this information being handed to the government. It is ludicrous that there was somehow a light-touch look at him by somebody else. It is the prime minister’s responsibility.”

Labour intensified its attack on the prime minister after Miliband said in the Commons that Cameron had turned a blind eye just as he had when he failed to look into the background of the former News of the World editor Andy Coulson before appointing him Conservative communications director in 2007.

Miliband said: “It was in the public domain in September 2010 that HSBC was enabling tax avoidance on an industrial scale. Are we seriously expected to believe that when he made Stephen Green a minister four months later he had no idea about these allegations?”

Pointing at the prime minister, Miliband added: “There’s something rotten at the heart of the Conservative party – and it’s him.”

The Labour leader was speaking an hour after the Guardian had disclosed that as many as seven Tory donors had accounts at HSBC’s Swiss subsidiary and few checks were made by HMRC into the tax affairs of Green.

Miliband said: “An hour ago we learned that linked to the HSBC tax avoidance scandal are seven Tory donors, including a former treasurer of the Tory party, who between them have given nearly £5m to the Conservative party. How can the prime minister explain the revolving door between Tory party HQ and the Swiss branch of HSBC?”

He then challenged Cameron to explain why these allegations about the bank run by Green were in the public domain in September 2010; well before he was appointed trade minister and given a peerage.

Miliband claimed Cameron was pleading ignorance and challenged the prime minister to say whether he ever had a conversation with Green about the allegations around his bank. Cameron declined to answer Miliband’s question directly, but said: “My responsibility is the tax laws of this country.”

The prime minister later said that it would be wrong – and corrupt – for ministers to intervene in the work of the tax authorities when he was asked by the Labour MP for Glasgow North Ann McKechin about why none of the dozen planned prosecutions related to HSBC identified by HMRC in 2012 had come to court.

“In our country the tax collection agency, HMRC, is independent of government, independent of ministers … It is very important in a free country that ministers are not given the details of who is being investigated and what the prosecutions are. This doesn’t happen in other countries. We have a word for it. It is called corruption,” Cameron said.

But Labour challenged the claim by Downing Street that ministers did not know about the allegations of tax avoidance at HSBC’s Swiss subsidiary. The party pointed to a press release released by HMRC in October 2011, nine months after Green’s appointment, saying that it had begun “criminal and serious fraud investigations” after receiving information that some UK residents “may not have reported all their income tax gains to HMRC”.

The press release included a quote from David Gauke, the treasury minister, who said the government had made an additional £917m available to HMRC to help it “tackle evasion, avoidance and fraud”.

Labour criticised the prime minister after Downing Street suggested there had been no need for him to discuss tax avoidance with Green at the time of his appointment because the allegations aired at the time were about the conduct of clients and not of the bank. The No 10 spokesman said: “The reporting at the time – looking back at what the Guardian, the BBC and others were reporting – it was about clients of HSBC. It is only in recent days that what [the Guardian] has produced has raised questions about allegations surrounding the behaviour of HSBC itself.”

Labour said the prime minister should answer questions about the Tory donors who legally held accounts with HSBC’s Swiss subsidiary. The spokesman said that Miliband did not need to ask questions about the former Labour donor Lord Paul and the Tory donor Richard Caring who made a loan to the Labour party on the grounds that their relationship with the party pre-dated his leadership. The spokesman added: “The whole scandal has shown he is a dodgy prime minister.”