Swiss tax scandal engulfs Hartnett
MORE people should have been prosecuted for having Swiss bank accounts with HSBC, a controversial former tax chief at HMRC has said.
Dave Hartnett – who has been criticised for taking a job at HSBC within months of leaving his civil service post – said that it was a ‘miserable result’ for taxpayers that only one person has been brought to trial over the scandal.
But MPs said that it was ‘hard to believe’ that Hartnett knew nothing of the huge list of British account holders while occupying such a senior position inside the revenue. The former civil servant was accused of ‘hiding behind weasely words’ by members of the powerful Public Accounts Committee during an intense two-hour grilling yesterday.
Labour MP Austin Mitchell said it ‘stinks’ that Hartnett accepted a position at HSBC so soon after leaving the revenue. Last month it emerged that HSBC had helped 7,000 wealthy Britons avoid tax through its Swiss division.
But HMRC, where Hartnett was permanent secretary for tax until 2012, had access to the files from as early as April 2010 after a whistleblower handed over a list of 30,000 names to the French government.
Despite this, there has only been a single prosecution from the entire UK list. Hartnett said: ‘ I had expected there to be more criminal prosecutions’, but denied that it was his responsibility while head of tax there.
He claimed investigation of the HSBC list was handled by a specially- created task force called ‘Operation Solace’, which had around 300 people working in it.
He added: ‘I’m not here to try and get off the hook – I was never on the hook. The chairman [of HMRC] was the one who looked after enforcement and compliance.’
But he blamed a ‘lack of resources’ for the single prosecution – despite telling MPs back in 2011 that the list, which was known about but not publicly disclosed, was ‘ripe for investigation’.
Labour’s Margaret Hodge, who chairs the committee, yesterday said she was ‘incredulous’ that Hartnett was not involved.
She told him: ‘You are associated personally, more than probably any other individual in government, with what was the old culture of doing things that people now regard as completely unacceptable.’
During the session Hartnett also claimed not to be able to remember various details about his tenure.
When struggling to recall details of a meeting with HSBC directors, he explained he is ‘nearly three years out of this so having to work from memory’. But when he subsequently refused to answer a ques- tion about who attended the meeting, Hodge responded: ‘I can’t for the life of me see how that has got anything to do with protecting the taxpayers’ interests. What it has got to do with is not telling us the truth or the whole truth.’
Hartnett says many Swiss banks rules were ‘so full of holes that they could just walk through them’.
He also said that ‘people with money in Switzerland had a tendency to feel confident that their money would never be uncovered’.
Hartnett’s tenure at HMRC was controversial.
He was accused of striking ‘sweetheart deals’ with multinationals including Vodafone and Goldman Sachs, and was once described as being Britain’s most ‘wined and dined’ civil servant.
Yesterday he admitted to MPs that he had been ‘approached by many people with offers of work’ after retiring in 2012, but that he had chosen to take a role at HSBC (down 6p at 578.7p) because he ‘ believed [ Stuart] Gulliver’s vision’ to clean up HSBC and make it the best bank in the world.
HMRC has subsequently said that £135m of lost earnings has been reclaimed from Swiss accounts.