George Osborne: Labour 'arsonists' over HSBC

Chancellor George Osborne has likened Labour to "arsonists throwing rocks at firefighters" over the HSBC tax evasion claims, in heated Commons exchanges.

Mr Osborne accused Labour of "breathtaking hypocrisy", saying the allegations related to incidents which took place under the last government.

He said the current government was taking action to tackle tax evasion, with prosecutions up "five-fold".

Ed Balls accused the government of "turning a blind eye" to tax evasion.

Shadow chancellor Ed Balls tabled an urgent question on HSBC to force the government to make a statement on the matter.

Mr Osborne pledged further action to tackle tax evasion in next month's Budget.

Whitehall sources later confirmed that new measures would be announced to penalise financial institutions which facilitate tax evasion.

'Blind eye'

Mr Balls - who has accused the chancellor of trying to avoid answering questions on the HSBC tax row - said Mr Osborne could no longer "sweep these issues under the carpet".

But Mr Osborne said it was Mr Balls who had "the most to answer for" because he was City minister at the time when "each and every single case" of alleged tax evasion took place.

The angry exchanges in the House of Commons came after allegations that HSBC's Swiss private bank may have helped wealthy clients avoid or evade tax.

HM Revenue & Customs was given the leaked data in 2010 and has identified 1,100 people who had not paid their taxes. There has been one prosecution as a result.

Labour has questioned why there had not been more prosecutions as a result of the leaked data.

Mr Balls said of Mr Osborne: "He has been the chancellor for five years since the government was given the files.

"Isn't it clear, either he and the prime minister were negligent in failing to act on the evidence the government received - including about HSBC and Lord Green - or just as with the appointment of [former Downing Street communications director Andy] Coulson, didn't they just deliberately turn a blind eye?"

But the chancellor contended that the existence of the files became public knowledge in 2009, and that they were requested by HM Revenue & Customs in April 2010, when Mr Balls was in the cabinet.

'Bunch of arsonists'

Mr Osborne said he had increased resources to crack down on tax dodgers, and told MPs that millions of pounds had been recovered from UK citizens following an investigation into the HSBC cases.

It was Labour who was the "friend of the tax avoiders and tax evaders" when in power, Mr Osborne added, saying he was happy to stand by the current government's record on tackling tax evasion.

"When we came to office, city bankers were paying lower tax rates than those who cleaned for them, foreigners were not paying capital gains tax, hedge funds were abusing partnership rules and the richest in our society routinely did not pay stamp duty at all.

"We have put an end to all of that - and we will take more action in the Budget.

"All we have on the other side are a bunch of arsonists throwing rocks at the firefighters putting out the fire that they started."

BBC political correspondent Iain Watson said Whitehall sources had suggested that further action on tax evasion would not necessarily lead to a new offence of "corporate failure to prevent an economic crime", an idea floated by Lib Dem Chief Secretary to the Treasury Danny Alexander at the weekend.