George Osborne has washed his hands of responsibility for prosecutions against people who evaded tax through HSBC Switzerland after more than a week of silence on the issue.
The chancellor said the allegations were very serious but such decisions were a matter for the prosecuting authorities – a principle that has been “one of the bulwarks of freedom in this country for hundreds of years”.
“I don’t think it would be right – and actually when you pause to think about it I think most people would agree – I don’t think it would be right for a chancellor of the exchequer to direct prosecutions against individuals or individual companies,” he told an audience at the Tate on the Southbank in London.
HM Revenue and Customs, which is overseen by the chancellor, has come in for criticism over its decision to prioritise 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.
Downing Street has so far refused to hold an inquiry into HMRC’s decisions following revelations by the Guardian, the BBC and international media outlets about the extent of evasion by clients of the HSBC Swiss subsidiary and its role in enabling this to happen.
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.
“We resourced HMRC accordingly and as a result prosecutions are up fivefold,” he said.
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.
He has still not replied to a letter from Labour demanding that he explain his knowledge of the conduct of HSBC’s Swiss subsidiary and the extent to which the Treasury was aware that HMRC had decided to take a light-touch approach to seeking prosecutions for those suspected of tax evasion.
A YouGov survey for the Times Red Box found 62% of people want the chancellor to answer these questions.
Labour is frustrated that the chancellor has avoided questions on the issue for a week, while both Ed Miliband and Ed Balls have been repeatedly pressed on issues such as whether they kept tax receipts for a window cleaner.
In the letter, the shadow chancellor asked whether the selective prosecutions by HMRC were approved by the Treasury. He pointed out that detailed information was passed to the coalition government in May 2010 about 1,100 HSBC clients allegedly guilty of tax evasion or avoidance and yet since then there had been just one prosecution.
Balls also asked Osborne to explain how a Downing Street spokesperson came to claim last week that no government minister had any knowledge of what happened at HSBC, yet the chief executive of HMRC, Lin Homer, has since said she believed that ministers were in fact informed about these files after they were received.