15 Feb 2015

HSBC says sorry as tax avoidance row grows

As HSBC issues an apology over tax allegations, Business Secretary Vince Cable says HM Revenue and Customs “could be doing a great deal more” to address such issues.

In a letter addressed to the scandal-hit bank’s customers and staff, published in some Sunday newspapers, HSBC chief executive Stuart Gulliver said the media revelations in the last week had been “a painful experience”.

Read more: HSBC tax secrecy timeline: who knew what, and when?

And he added he wanted to assure customers its Swiss private bank had been “completely overhauled”.

However, the business secretary has said he wants greater assurances about tax apparency.

Mr Cable told Sky News’ Murnaghan programme: “What has emerged is striking and certainly unsatisfactory. I think the worst period we went through was 10 years ago when all the leading banks were offering industrial-scale tax avoidance to British citizens to avoid British tax and they were doing it out of London.

What has emerged is striking and certainly unsatisfactory. Vince Cable

“We’ve moved on quite a bit from there, but still there are things happening which most definitely should not be happening.”

He called on HMRC to do “a great deal more” in tackling such incidents, adding: “The treatment of small people and poor people is very severe, but the big fish, the companies and rich individuals are not being treated as seriously and that is wrong and it must change.”

‘Painful experience’

In the full-page HSBC advert, Mr Gulliver said: “The media focus has been on historical events that show the standards to which we operate today were not universally in place in our Swiss operations eight years ago.

We have absolutely no appetite to do business with clients who are evading their taxes. Stuart Gulliver

“We must show we understand that the societies we serve expect more from us. We therefore offer our sincerest apologies.”

Mr Gulliver said that a former employee of the Swiss private bank “stole data more than eight years ago”, and that many of the people mentioned in the data were no longer clients.

He added: “The media has been mentioning a number of 100,000 clients. At its peak, the Swiss private bank had about 30,000 accounts.

“We have absolutely no appetite to do business with clients who are evading their taxes or who fail to meet our financial crime compliance standards.”

Watch Siobhan Kennedy’s interview with Herve Falciani from 12 February:

The letter added that since 2008, when whistleblower Herve Falciani leaked the data which sparked the affair, the bank had “fundamentally “changed” how it was run and the number of Swiss private bank accounts had been cut by nearly 70 per cent.

Read Gary Gibbon's blog: Miliband - the cat that got the vanilla cream

The adverts come amid a political row over tax avoidance, with Labour leader Ed Miliband on Saturday vowing to carry out an inquiry into the UK’s tax authority should his party win power in the next general election. Mr Miliband argued that people not paying their fair share of tax had left “a £34bn hole in the nation’s finances”.

This week, Mr Miliband seized on allegations about tax avoidance by HSBC clients to brand Prime Minister David Cameron a “dodgy prime minister, surrounded by dodgy donors”.