HSBC scandal shines a little light on a much bigger problem

HSBC has acknowledged "past compliance and control failings". Credit: Joe Giddens/PA Wire

"Swiss bank help rich evade tax - shock!" so tweeted a columnist for the Financial Times yesterday evening. Overnight the tweet was deleted, I suspect he realised he'd missed the point.

The existence of a file containing the names and account details of 100,000 individuals who banked with HSBC's private bank in Switzerland, isn't new. We've known about it since 2010. But the publication of its contents for the first time breathes life into a fascinating story and makes this a toe-curling moment for HSBC

I won't seek to steal the thunder which rightly belongs to the Guardian/Panorama/Le Monde/International Consortium of Investigative Journalism. Read it here.

The bank's defence is it had no idea that between 2005 and 2007 its Swiss operation was helping wealthy clients (including Hollywood stars and royalty) to squirrel their money away out of sight of the taxman.

HSBC acknowledges "past compliance and control failings" and points out that the business has been "fundamentally reformed".

The political heat is on Lord Stephen Green, HSBC's former chief executive and chairman, who was later appointed as the government's Trade Minister in 2011. Labour wants to know why, pointing out that by this time the file had already been handed to HMRC.

There are questions too for the taxman. HMRC was handed the details of 7,000 British clients. One prosecution in five years, seriously? HMRC point to £135 million recovered and is clear that everything that was owed has been recovered, in full. No discounts, no cosy deals. As for criminal prosecutions, everything has been passed to the Crown Prosecution Service, it's their call.

Are the rich still evading tax? Of course. But it would be churlish to argue the government has been asleep on this issue. Under considerable pressure Switzerland and other so-called tax havens have agreed to a series of disclosures about who has what banked where. HMRC's official estimate that tax evasion costs the government around £4.1 billion a year in lost revenue feels scrawled on the back of a cigarette packet. It's become harder (and arguably more expensive) for the rich to hide their riches but it's still possible.