Polly Toynbee in The Guardian
At last night’s Black and White ball to raise funds for the Conservatives, more than 500 phenomenally rich donors gathered in London’s Grosvenor House hotel – last year’s guests were worth £22bn. Paying £15,000 for dinner was peanuts compared to sums this assembly of plutocrats will donate to the party – no wonder there’s been a news lockdown. Are these the people who really run the country, buying an election to ensure government by their people, for their people? That’s for voters to consider in May: Cameron’s government has certainly been kind to its funders.
But there could hardly be a worse day for the ball as the Guardian, Le Monde, BBC Panorama and the Washington-based International Consortium of Investigative Journalists revealed a whistleblower’s details of some of the wealthy account-holders – including tax dodgers – with HSBC in Switzerland.
It has taken our reporting team several months to sort the mountainous information revealed about these Swiss accounts. This investigation has proved in some ways more difficult and risky than taking on the secret world in our WikiLeaks revelations, or even than the Snowden files. The might of the US and UK state, the fury of governments and secret services, are nowhere near as dangerous to a newspaper as the threats we have received from a string of top law firms trying to prevent revelation of their clients’ secret Swiss accounts.
Over the past four weeks we have been dealing with long and threatening lawyers’ letters from some of those we are naming. They accuse us of “false, misleading, sloppy journalism” and “defamation”, with threats under the Data Protection Act and warnings of injunctions: “You may be in no doubt that legal actions will swiftly follow”, and the like. Carter-Ruck, Schillings, Withers, Hill Dickinson – and many others – pile in to try to frighten us off. The danger is that we can be right 99 out of 100 times, with more revelations still to come – but one error can kill you. The new defamation law should be better than the old libel laws, but its impact has yet to be tested in court.
For nearly five years the government has stayed silent about these HSBC Swiss account-holders. How grateful the world of Tory donors must be to see this embarrassment handled with gentlemanly delicacy. No naming, shaming – or, God forbid, prosecutions. Instead, privately some but by no means all that’s owing has been repaid by UK cheats – so far £135m.
Tax evasion is a risk well worth taking with such trivial penalties: in some cases all HMRC demands is the tax owed, plus interest, plus 10% – not confiscation. The total collected is far less than the French and Spanish have reclaimed, though the UK has many more account-holders. Among them are famous names, entrepreneurs and aristocratic families – alongside dictators and drug dealers. HMRC has treated them with the same discretion as HSBC did when they handed over bricks of money to “respectable” people. Compare all this to the slightest infringement of benefit rules over minuscule sums.
Tax cheats are forever one step ahead. That’s why George Osborne carefully introduced a General Anti-Avoidance Rule – which expensive lawyers can get round – not a General Anti-Avoidance Principle, which would strike at the spirit of avoidance. The US, Belgian, French and Argentinian governments have instigated criminal proceedings against HSBC – it’s no surprise that our government has not.
One embarrassment would be any development implicating Stephen Green, former HSBC top man, appointed by David Cameron as minister of state for trade and investment in September 2010, despite the authorities already having the dynamite details of HSBC’s tax-avoiding connivance. Few experts think HSBC exceptionally venal; it’s just the one that got caught – again. Only regulation can stop them – shame doesn’t work. HSBC was obscured in the public mind by its chairman’s piety as an ordained priest.
Lord Green was chief executive from 2003 to 2006, until he took over the chair. Pursued down the street by Panorama, he had nothing to say. But in the past he has written much about ethical banking in two books reconciling God and Mammon. However, under his custodianship Mammon seems to have got the upper hand. His report is among papers for discussion on restructuring the Church of England at the synod this week. His effort to bring business culture into the church is not well timed, with its management-speak aim of turning the clergy into a “talent pool” of future business-type executives. The Dean of Christ Church College, Oxford, Professor Martyn Percy, is not alone in choking into his chalice at receiving “a summons urging early booking for an MBA-style programme”. Green is one of the high net-worth evangelicals of Holy Trinity Brompton, favoured by many wealthy holy-rollers. Their creed has always been that God rewards wealth: to him that hath, more shall be given – tax-free.
Labour is lucky this global story blew up in a week already dominated by a tax avoidance row: it was a Tory blunder to put up the Monaco-dwelling head of Boots to call Labour a “catastrophe”, when his company pays a fraction of the UK tax it did before switching its base to Switzerland. Timing is important here: the HSBC revelations haven’t emerged on Labour’s watch. Both Eds have frequently – and rightly – apologised for Labour’s feeble regulation of banks pre-crash, while always reminding Cameron and Osborne that they called loudly for less banking “red tape” in those days.
Ed Miliband warns the many tax havens under the British crown that he will clamp down – not before time. He now needs to show his determination by setting up an office of tax responsibility, where he should install Margaret Hodge to chase up her public accounts committee tax investigations.
In power Labour shied away, afraid of offending business. Not this time. It’s worth recalling that Tony Blair in 1997 had no FTSE 100 supporters: they and the CBI warned of the dire consequences of a national minimum wage. They called his £5bn windfall tax on utilities “Stalinist”. For Labour, only the assumption of power brings business converts – seekers after preferments, contracts and influence. Those who assume otherwise delude themselves.