Oxfam Ireland is urging European leaders to make tax more transparent after the revelation that the HSBC's Swiss banking arm helped wealthy customers dodge taxes and conceal millions of euro of assets.
The revelations were made public by the The Irish Times and the International Consortium of Investigative Journalist on Sunday.
The development agency says Monday’s story highlights a toxic tax system where tax avoidance through the use of legal loopholes is driving rapidly increasing inequality and depriving governments around the world, including Ireland, of billions that could help combat poverty and drive inclusive economic growth.
Oxfam Ireland chief executive Jim Clarken said: "Today's story highlights the key role the HSBC played in advising their clients to dodge taxes and hide assets, and the international nature of the scandal. We're talking about over 130,000 people hiding their money offshore.
“This scandal shows why it’s absolutely important that Europe brings more transparency on tax matters. European governments should implement automatic information exchange between tax authorities as soon as possible to close off loopholes,” he said.
Former UK chancellor of the exchequer Lord Lawson, who sat on the parliamentary commission on banking standards, said that the PAC should look into the "shocking" allegations against HSBC.
But he said he did not believe that Stephen Green, a former chairman of HSBC and a former UK government trade minister, could have been aware of what was going on in the bank’s Swiss branch.
“Standards in banking have deteriorated over the years. Things which would never have been done in the past are being done now. The big banks are not only to big to fail but too big and too complex to manage.
"I can't believe that Stephen Green, who amongst other things is an ordained Church of England priest, could possibly have known what was going on. But the fact that he, a very clever man, didn't know what was going on is very serious.
“I do think that banks are going to have to be split up – the big banks – so that they are less complex and not quite so big and so it is possible to manage them. I think that has to be done.
“He should have known what was going on, but it seems he didn’t. No doubt the public accounts committee of the House of Commons will wish to investigate this, to look into this very carefully.”
The Labour Party pointed to the appointment of Stephen Green as a trade minister. "Why, in the five years since this government was first given information about how HSBC helped people evade tax, has there only been one prosecution out of 1,100 individuals identified?," Labour's finance spokesman, Ed Balls, said.
“Why did they appoint the chairman of HSBC as a Tory minister eight months after the government was told about the bank’s activities?”
The Tories fired back that Mr Balls was a treasury minister at the time covered by the revelations,.
David Gauke, a Conservative treasury minister, said that while 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 that tax evasion had been "far too prevalent" under the Labour governments in which Mr Balls served.
Margaret Hodge, the Labour MP who heads Westminster's public accounts committee, was also critical of 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," she said.
Additional reporting Bloomberg/Reuters