Business as usual

It’s being called the biggest leak in banking history, when on Tuesday (February 9) a massive cache of documents revealed that HSBC, Britain’s largest bank, had been using its Swiss arm to aid the mega-rich in various countries evade millions of pounds in tax.

 
The French paper Le Monde obtained the documents, which holds data of hundreds of thousands of clients using secret Swiss accounts from more than two hundred countries.

 
International Consortium of Investigative Journalists, the Guardian newspaper, Panorama and more than 50 media outlets around the world.

 
The data contains details of about 7,000 clients based in the UK. Originally leaked in 2007 by a French whistleblower Herve Falciani, HM Revenue and Customs obtained the leaked information in 2010.

 
In the past five years, only 1100 people from the list of 7,000 have been identified by the HMRC, and only one prosecution has resulted from these leaks that the government knew about all along.

 
Worst of all, the former head of HSBC, Stephen Green, was later appointed trade minister by David Cameron in 2011, even though the tax authorities had already known about the leaks at the time.

 
Unite national officer for finance Dominic Hook pointed to a statement made by Labour MP Margaret Hodge in the wake of the revelations.

 
“She made an important comparison yesterday,” said Hook. “She said some people have no choice but to go to jail if they’re defrauding the benefits system, but these people – the extremely wealthy – are defrauding the country to the tune of millions and they just have to pay a fine at most, and they get away with it.”

 
HSBC said in a statement in response to the revelations that they had taken significant steps to reform their practices since 2007, after which they reduced their private Swiss client base by 70 per cent.

 
Hook concedes that banks have significantly changed their ways since the financial crisis, but that these changes hit bank workers the hardest, instead of those at the top.

 
Job cuts

 
“One of the biggest changes the big four banks had to make is the massive number of job cuts,” said Hook. “And why have they had to make all these job cuts? Because they’ve had to pay so much out in fines and change the way they do business, not only because of the crisis, but to show that they can do business in a responsible way.”

 
In terms of regulation, the UK has trailed other countries in recouping money lost from rampant tax evasion discovered through these leaked documents – Spain recouped £200m, France got back £188m, while the UK only recovered £135m.

 
HSBC said it is complying with authorities as it faces prosecutions in multiple countries across Europe, and in the US, in Argentina and others. But in the UK, the bank is not being prosecuted.

 
Hook argued that it’s the culture of laxity surrounding tax evasion that makes it a crime in which everyone involved merely looks the other way, while the rest of the country suffers.

 
“There should be no way of evading tax,” Hook said. “Of course, there are ways to pay less tax, for example, by paying into a pension scheme and those sorts of things are perfectly acceptable.

 
“But actively evading tax should simply not be allowed. More than that, those who have been found to do it should be prosecuted for breaking the law.”

 
Hook went on to say that HSBC’s being found out now could be considered bad luck, since aiding tax evasion through Swiss banks likely goes on unimpeded in other banks.

 
“As it stands now, if tax evaders are found out, perhaps they pay what they’re owed and then they pay a small fine, and that’s that,” said Hook. “There’s no doubt that those people who’ve had bank accounts with HSBC may have well had accounts with other banks and, who knows, maybe they’re carrying on doing the same thing and getting away with it.”

 
Hook emphasised the inequality that dominates employment in the banking sector, which makes these revelations all the more repellent.

 
“For our members who work in the banks, many of them are low paid. You’re looking at starting rates that are barely the Living Wage,” he added. “The cashiers you see at banks, they’re maybe earning £15,000 or £16,000.

 
“To these people who are barely scraping buy, to them, all these steps banks have taken to help the mega-rich are completely galling.”