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The below Parliamentary question was asked by Lord Myners on 2015-02-10.

To ask Her Majesty’s Government what actions they plan to take in connection with bankers who colluded in tax evasion or oversaw those perpetrating collusion.

Lord Deighton

HL4893

Under the Swiss Agreement HMRC received a list of the top 10 destinations to where funds were moved in the period before the Agreement came into force. They are using this information together with information from compliance work to follow the proceeds of tax evasion.

As with Lichtenstein agreement signed in 2009, HMRC is legally restricted by the Agreement’s terms from publishing the information provided.

HL4896

Where there is evidence of collusion in tax evasion or other wrongdoing, the relevant law enforcement agency would assess that evidence and decide whether to pursue an investigation.

HMRC received the data from the French in April 2010 under very strict international treaty conditions, which limited its use to tax purposes only and prevented HMRC from sharing the data with other law enforcement authorities for investigating other potential offences.

HMRC first asked for the conditions to be relaxed in August 2010. Following a number of more recent representations, the French authorities gave written confirmation on 23 February 2015 that they were lifting restrictions on the use and sharing of the data with other law enforcement agencies and regulators for the purpose of investigating criminal offences.

As a result, HMRC has recently held a multi-agency meeting to discuss how the stolen HSBC Suisse data can be shared with them.

The below Parliamentary question was asked by Lord Myners on 2015-02-10.

To ask Her Majesty’s Government whether they intend to ban United Kingdom banks from operating branches or subsidiaries in offshore tax havens; and whether United Kingdom regulators have any regulatory responsibility for those banks, their management or those in the United Kingdom who supervise such activities.

Lord Deighton

The Government does not impose restrictions on where UK banks can operate overseas. However, the UK has championed international tax transparency and through our G8 Presidency has driven the agreement and early implementation of the new global standard for automatic exchange of financial information for tax purposes. To date over 90 countries have committed to exchange such information on a multilateral basis. The UK also remains committed to ensuring that there are effective anti-avoidance rules in place to protect the UK corporation tax base.

This includes the introduction of new Controlled Foreign Company rules (effective from the beginning of 2013) which help to deter and prevent artificial diversion of profits from the UK.

It also includes supporting the G20-OECD Base Erosion and Profit Shifting project which is looking to address weaknesses in international tax rules which allow companies to avoid paying tax on their profits.

The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are the UK financial services regulators. The role of the FCA and PRA in regulating overseas branches and subsidiaries of UK banks is dependent on the specific circumstances of an individual case.

However, I have asked the FCA and the PRA to reply directly to the Noble Lord by letter to explain their role in this area. A copy of the letter will be placed in the Library of the House.

The below Parliamentary question was asked by Lord Myners on 2015-02-10.

To ask Her Majesty’s Government whether they have plans to consider setting the inflation target over an extended period, rather than a single year, in order to allow some catch-up for an extended period of under-target outcomes.

Lord Deighton

The Bank of England Act 1998 requires the Treasury to specify the objectives of the Monetary Policy Committee, namely what price stability is taken to consist of and the Government’s economic policy objective at least once every 12 months.

At Budget 2013, the Government reviewed the UK’s flexible inflation targeting monetary policy framework in international and historical context.

Based on the assessment set out in the review, the Government believes that low and stable medium-term inflation is a necessary, though not sufficient, pre-requisite for economic prosperity. As a result, in the remit for the independent Monetary Policy Committee of the Bank of England, the Government has retained a flexible inflation targeting framework and reaffirmed the 2 per cent Consumer Prices Index inflation target, which applies at all times. The Government updated the remit to clarify the trade-offs that are involved in setting monetary policy to meet a forward-looking inflation target.