Taxation: Avoidance

Lord Phillips of Sudbury Excerpts

Monday 9th February 2015 Lords Chamber

[Lord Phillips of Sudbury (LD)]

My Lords, in the course of his Statement my noble friend said twice, I think, that it is more appropriate to deal with these issues by way of civil proceedings. He mentioned that the amount recovered was a sum short of £200 million. My own experience—I must plead guilty to being a practising lawyer of 57 years’ standing—is very clear that one conviction of one major figure in one major bank for tax fraud, such as that which HSBC has been carrying out for many years, reverberates around the City and the world of business and the professions with infinitely more force and effectiveness than any amount of civil penalties, which none of those who are responsible for the malefactions actually pay from their own pocket.

[Lord Newby]

My Lords, the noble Lord asked about civil as opposed to criminal penalties, and whether an exemplary hanging might not be a good idea. I explained the difficulties about prosecutions in this case, but we have successfully prosecuted people for LIBOR manipulation and we have extended the scope of the criminal law in respect of people in senior positions in banks. The noble Lord will probably have seen that the very threat of criminal action against directors of banks, even though pretty remote, has made a number of non-executive directors of banks extremely nervous.