HSBC leaks: Party leaders trade insults as tax row gets personal

The HSBC row boiled over into personal insults and threats of legal action today as Ed Miliband was accused of making “untrue and defamatory” claims that the Tory treasurer, Lord Fink, had avoided tax.

The Labour leader clashed repeatedly with David Cameron following the disclosure that the Conservatives had collected donations worth more than £5m from HSBC clients with Swiss accounts.

Mr Miliband lambasted him as a “dodgy Prime Minister surrounded by dodgy donors”, while Mr Cameron retaliated by describing his rival as “toxic” and a “friend” to tax dodgers.

The Prime Minister, who faces questions over the Government’s failure to act over evidence of widespread tax evasion involving HSBC’s private Swiss bank, later complained his opponent had been “personally horrid” during their encounter.

The Labour leader came under pressure when he was challenged by Lord Fink to repeat claims that the peer had used a Swiss bank account to avoid tax.

Mr Miliband told the Commons, where he is protected from libel laws by parliamentary privilege, that Lord Fink, who was made a peer and appointed Tory treasurer by Mr Cameron, had undertaken “tax avoidance activities” in Switzerland.

In a letter to Mr Miliband, Lord Fink dismissed the accusation as “untrue and defamatory” as he had needed a Swiss account when he worked for four years in the country.

“I find it extraordinary that you have made claims against me without contacting me. I challenge you to repeat your allegation outside the House of Commons – or to withdraw it publicly,” he wrote.

Labour said Mr Miliband stood by his remarks and was prepared to repeat them outside the Commons. A spokesman said: “These are serious allegations about Lord Fink and his complex arrangements to minimise tax. He still hasn’t justified the reasons why he made these arrangements.”

Labour has sought to turn the spotlight on whether Mr Cameron spoke to the former group chairman of HSBC, Lord Green, about the allegations of tax-dodging by the bank’s Swiss subsidiary before appointing him trade minister.

The Prime Minister repeatedly sidestepped the question, telling MPs that “every proper process” was followed in appointing the minister.

In fractious scenes, Mr Miliband confronted him over donations to Tory funds totalling more than £5m from HSBC clients with Swiss accounts, including the Richmond Park MP Zac Goldsmith. He said there had been a “revolving door between Tory Party HQ and the Swiss branch of HSBC” and singled out Lord Fink who has given £3m to the party.

Mr Cameron retorted that Lord Paul, a former Labour donor who contributed towards Gordon Brown’s election campaign, was among the political donors on the list.

The Labour leader said: “None of these people have given a penny on my watch and he’s up to his neck in this.” Mr Cameron replied that – unlike the unions – Tory donors have no influence on their party’s policies or candidates.

He added: “When the trade unions fund the Labour party, they pay for the candidates, they pay for the policies, and the only reason he is sitting there is because a bunch of trade union leaders decided he was more left-wing than his brother.”