Political point-scoring continues as spotlight shined into HSBC scandal
Fallout from tax evasion activities of bank’s Swiss operations not abating
HSBC maintained, in full page adverts taken out in papers at the weekend, that its Swiss banking operations had been “completely overhauled”. Photograph: Harold Cunningham/Getty
Have you ever asked your window cleaner for a receipt? Me neither. Nor, it appears, has the shadow chancellor Ed Balls, at least not in the past 17 years, according to the man who has cleaned his windows for almost two decades.
Reporters tracked down Balls’s window cleaner after the shadow chancellor urged people at the weekend to keep a record of cash payments handed to tradespeople.
Aiming to make political capital over the furore surrounding HSBC’s Swiss banking activities, and pledging that Labour would crack down on systemic abuse of the tax system, Balls claimed that, as shadow chancellor, he was “extremely careful” about these things himself.
The ploy backfired, although, as Balls pays for his window cleaner’s services by cheque, he does not appear to be guilty of aiding and abetting tax evasion.
Embarrassing footage from 2003 has been unearthed, showing Osborne, then a lowly MP, recommending the use of what he called “pretty clever financial products” to help reduce care costs, although he did admit that he “probably shouldn’t be advocating this on television”.
HSBC and those who used the services of its Swiss private banking arm will no doubt welcome the diversion of political point-scoring involving window cleaners and the like but the fallout from the scandal shows little sign of abating.
Increasing scrutinyLord Green
The former Tory trade minister was appointed chief executive of HSBC in 2003, later serving as chairman between 2006 and 2010, years in which its clients included criminals and tax fraudsters. He has repeatedly refused to comment on HSBC’s role in enabling its wealthy client to evade tax through their Swiss accounts.
Green is not the only former HSBC executive whose conduct at the bank is being questioned. His predecessor, Sir John Bond, was chief executive from 1993 to 1998 and then chairman until 2006. So it was on his watch that the Swiss operations with their dodgy practices, were acquired in 1999.
Questions are also being raised about the role of Clive Bannister, who headed up HSBC’s global private banking business between 1998 and 2006.
Bannister, son of the four-minute-mile athlete Sir Roger Bannister, is now chief executive of the insurance group Phoenix. Like the other key players, he has yet to speak publicly about just how much he knew of what was going on at the bank during his HSBC years.
There will be some answers later this month – we hope – from HSBC’s executive chairman, Douglas Flint, who is being called to Westminster to be grilled on the tax scandal by the influential treasury select committee.
The head of the committee, Andrew Tyrie, has said he has no plans to call past executives such as Lord Green, as he wants to focus on how the bank has cleaned up its practices and how it is operating now.
Full page adverts
Chief executive Stuart Gulliver said the bank “must show we understand that the societies we serve expect more from us. We therefore offer our sincerest apologies.”
If Tyrie does decide he wants to delve into the past, however, Flint should be well-placed to answer any questions. Before taking on his current role in 2010, he was finance director of the bank for 15 years.
Meanwhile, the City regulator is examining the culture and working practices at HSBC, which is Europe’s largest bank. The Financial Conduct Authority (FCA) said it is working closely with the Bank of England and the tax authorities on the matter. HM Revenue & Customs, which was handed the HSBC dossier in 2010, has defended its lack of action in pursuing the offenders, only one of whom has been prosecuted.
Journalists will have their opportunity to question HSBC on Monday, when it kicks off the 2014 bank reporting season. It should not come as much of a surprise to HSBC executives if the results – aside from its small subsidiary in Switzerland – are not the main focus of attention.
Fiona Walsh is business editor of theguardian.com