Miliband refuses to back down on Tory tax claims

Ed Miliband is expected to repeat allegations that Tory donor Lord Fink engaged in tax avoidance as the row over activities at HSBC's Swiss banking arm escalates.

The peer branded the Labour leader's jibe in the Commons yesterday "untrue and defamatory" and challenged him to step out from the cover of parliamentary privilege so he could take legal action.

Party sources confirmed that Mr Miliband - who is launching education policy at his old school in north London this afternoon - will make the claim again.

Asked on the BBC's Newsnight whether Mr Miliband would stand by the allegation, deputy Labour leader Harriet Harman said: "Yes, and he stands by the assertion that these questions must be answered that are in The Guardian - and there they are - there are concerns about tax avoidance."

No allegations of wrongdoing

Lord Fink was among nine Conservative donors listed as clients of HSBC's Swiss subsidiary in leaked files, according to The Guardian. The newspaper said the accounts were held legally for a wide variety of reasons, and made no allegation of wrongdoing against those listed.

Of more than 6,000 British names understood to have been passed to HM Revenue & Customs in 2010, UK tax authorities say they have pursued around 1,100, recovering £135 million in unpaid tax, fines and interest. Just one prosecution has been brought.

During a rowdy Prime Minister's Questions session, Mr Miliband branded Mr Cameron a "dodgy Prime Minister surrounded by dodgy donors" who was "up to his neck" in the HSBC tax avoidance scandal.

But Mr Cameron hit back by pointing out Labour donor Lord Paul - who now sits as a crossbencher - had also been named as holding an account at the Swiss bank branch at the heart of the controversy.

He also insisted "every proper process was followed" when former HSBC chief Lord Green was appointed trade minister at the end of 2010.

Fink's defence

In a statement, Lord Fink accused Mr Miliband of "playing the man rather than the ball", saying he had a Swiss bank account because he was working for the Man Group in the country for four years from 1996 to 2000.

"During this time I had need of a local bank account to do simple things like receive my Swiss franc salary and pay grocery bills," he said.

"As I already banked with HSBC in London, I set up an account with HSBC. I subsequently set up an account with Credit Suisse as they had a branch much closer to my home and office.

"I submitted tax returns in both Switzerland and Britain showing my revised tax status, which was accepted by the Inland Revenue.

"The only way I have ever sought to depress my income tax liability is by giving a lot of my income to charity.

"I challenge you to repeat your allegation outside the House of Commons - or to withdraw it publicly."

The spat came as the bank worker who leaked the account details said he first contacted HMRC in 2008 and authorities have only a "tiny part" of the information available.

Herve Falciani, who initially obtained the list while employed as an IT worker in 2007, told Sky News he had emailed and phoned the tax authorities two years before data was handed over by French authorities in 2010.

"I sent an email, a very naive email, in 2008 ... to England - to the department dedicated to tax evasion - and afterwards I even called them," he said.

"And finally the most efficient move was through the French authorities because when we accepted to work together it was established and agreed that what we were doing should be available to any countries having co-operation treaties signed with France."

A "diligent" approach

In the Commons yesterday, HMRC chief executive Lin Homer insisted that staff had been "diligent" in their approach to the files.

Labour demanded to know why the Government signed up to a tax deal with Switzerland in 2012 which included a commitment that the UK "will not actively seek to acquire customer data stolen from Swiss banks".

Labour's Treasury spokeswoman Shabana Mahmood said: "George Osborne personally trumpeted this Swiss tax deal in his 2012 Autumn Statement. He must now come clean and explain why he signed off an agreement with the Swiss authorities which tied HMRC's hands for the future.

"This deal means that the Government may never again be able to get hold of the sort of information it received in 2010 about tax evasion and which is at the centre of this scandal.

"This deal was made while Lord Green was a Tory minister and years after this Government was first given this evidence of tax evasion.

"With every passing day, the questions for ministers grow and grow. George Osborne has stayed silent on this issue for over three days.

"David Cameron still needs to answer whether he discussed tax evasion at HSBC with Lord Green. And it is time we had a full and frank statement from Lord Green about what he knew about these activities which were happening while he was in charge of HSBC."

Ms Mahmood wrote to Mr Cameron to ask him to make clear whether ministers were aware of the allegations against HSBC's Swiss subsidiary.

Earlier this week, Downing Street said that "no Government minister had any knowledge that HSBC may have been involved in wrongdoing in regard to its Swiss banking arm prior to the reports of the last couple of days".

HMRC informed ministers

But HMRC permanent secretary Lin Homer told a parliamentary committee yesterday that she was "confident" the tax authorities would have informed ministers about the large cache of information handed over by French authorities within "the next few months" of its arrival in 2010.

Downing Street sources have stressed that the denial of ministerial knowledge related to allegations of wrongdoing by bank employees, rather than to widely-publicised claims that clients at the Geneva branch might have been seeking to avoid tax.

But Ms Mahmood said in her letter to the Prime Minister: "We now know that HMRC informed ministers of this case before prolonged public coverage of its details. It is now inconceivable that no minister was aware of a case of such magnitude, as your office has claimed, and the Government's position invites nothing but ridicule."

Shadow education secretary Tristram Hunt told BBC Radio 4's Today programme: "Ed Miliband will not be apologising. He will be making a statement this afternoon.

"Ed Miliband will be repeating his assertion today that there is a pattern of behaviour that looks like tax avoidance.

"Look, Ed Miliband stood up to the banks, he stood up to Rupert Murdoch, he stood up to the energy companies and he's certainly going to stand up to Lord Fink."

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