The UK Treasury is set to investigate allegations that the Swiss arm of HSBC helped around 130,000 clients evade tax. Whistleblower Mr Falciani – not Falcao, because he can’t seem to get anything right at the moment – claims that the UK government should have known about the scandal as early as 2010.
Her Majesty’s Revenue and Customs (HMRC) have been slow to react – I mean Per Mertesacker kind of slow. Although HMRC can confirm receipt of 7000 names in 2010, one prosecution has resulted and only £130 million has been recouped since.
In an era where austerity has been a mainstay in British lives, with savage cuts affecting everyday lives, evidence of a wealthy elite hiding their money from the government doesn’t bode well with the general public: ordinary people have borne the brunt of the struggle whilst banks have helped the rich to further improve their financial worth.
So, what is being done? The UK Tax Authority is expanding its investigations and will seek to determine whether banks had made adequate progress in changing their current practices. In April 2014, the nation’s favourite, George Osborne, stated in no uncertain terms that he would like to toughen the rule over tax evasion, as well as offshore banking. Since then there has been international agreement on the automatic exchange of information regarding tax matters, but no unilateral steps from the UK government. In other words, not much.
Margaret Hodge of the Public Accounts Committee has deplored HSBC’s actions. She highlighted the disparity in treatment between those who have got cash to splash, and those who don’t. A particular criticism is HMRC’s focus on recovering tax owed, rather than prosecuting offenders; if we were talking about benefit ‘scroungers’, they would’ve been relentlessly pursued through the national courts. The current stance is this: if you rob a bank, you will go free in exchange for returning the money you stole in the first place. At best, that’s illogical.
With the upcoming elections, Labour has upped the ante by questioning David Cameron’s appointment of Stephen Green, HSBC’s former executive chairman, to be a peer and a trade minister. Given the fact that Lord Green won’t speak to any media outlets, it suggests his silence is an admission of guilt. Cameron has also come under pressure from his opposite number, Ed Miliband over the scandal. He accused the Tories of accepting donations from ‘dodgy’ HSBC account holders. Cameron does not dispute the donations on the basis that the account holders did nothing illegal. However, involvement in this debacle doesn’t help the Tories shed their image of favouring the wealthy elite.
Under current legislation, foreign-born residents have found a loophole to avoid paying taxes on assets they hold outside of the UK. Sigrid Rausing, one of the richest women in Britain has managed to invoke this loophole because she can prove strong enough ties to her former homeland to be considered a ‘non-resident’ in the UK. That’s all well and good, but she’s lived in the UK for over 30 years without paying tax. Uh oh.
Clearly, the investigations taking place must be more probing because it seems that there is a great tendency to allow banks off the hook. The current structure has meant that the state has not had access to billions of pounds, and this has coincided with austerity; recovering lost monies and prosecuting offenders will serve to provide a deterrent effect. Let’s get Robin Hood on the case.
By Kamran Khan