World Economy

Britain Defends Gov’t Response to HSBC Tax Scandal

Britain Defends Gov’t Response to HSBC Tax ScandalBritain Defends Gov’t Response to HSBC Tax Scandal

British Finance Minister George Osborne on Friday defended his government’s response to the scandal engulfing London-based HSBC bank, saying the matter should be left for tax officials to investigate.

Osborne said allegations that London-based HSBC’s Swiss division helped clients in more than 200 countries dodge taxes on accounts containing $204 billion (180 billion euro) were “very serious,” but that he should not be “directing the prosecutions.”

“There are very serious allegations, there are allegations around tax evasion, which is illegal,” he said, AFP reported.

He noted political non-interference in legal issues “has been one of the bulwarks of freedom in this country for hundreds of years.”

But he also expressed his wish to “see more prosecutions,” and said that new international data-sharing schemes would make the fight against tax evasion easier.

The bank’s problems mounted this week when Swiss authorities raided its offices as part of a money laundering probe.

HSBC will announce its full-year results on Monday, and British MPs are due to grill group chairman Douglas Flint at a Treasury Committee hearing on Wednesday.

The claims in the “SwissLeaks” case emerged after a whistleblower took files from Europe’s biggest bank and passed them to French authorities.

Top officials from the British tax agency HM Revenue and Customs (HMRC) are also due to give evidence about their response to the leaks.

HMRC has been criticized over its decision to prioritize collecting money from tax evaders at the troubled HSBC Swiss subsidiary, rather than pursuing criminal cases.

Only one person has been prosecuted so far out of more than 1,000 account holders suspected of trying to hide money from the taxman.

Since the scandal broke, Osborne has been under pressure to answer questions about HMRC’s actions and the government’s decision to hire Lord Green, the former global boss of HSBC, as a trade minister.

Defending HMRC, Osborne claimed prosecutions for tax evasion have gone up on the coalition’s watch and pointed out that when he came to office he said he wanted to see more prosecutions for tax evasion.