As new report shows HSBC ‘too big to jail’, MEP warns UK could become a leading tax haven following Brexit

Molly has said that a UK outside the EU is in danger of becoming the world’s leading tax haven. The warning comes as new revelations show George Osborne intervened to stop HSBC being prosecuted for money laundering. Molly, an economist and member of the European Parliament’s tax committee and special Panama papers inquiry [1], said this showed that from a UK perspective, banks were ‘too big to jail’. She also points to new EU measures to crack down on money laundering, which she says will simply be ignored if the UK leaves the EU.

A report from the Financial Services Committee of the House of Representatives in the US reveals that Chancellor George Osborne, along with other senior UK officials, warned that enforcement actions against British banks could destabilise the global financial system. London-based HSBC paid a £1.5bn settlement after being accused by US authorities of letting Mexican drug cartels and Russian criminal gangs use its American operations to launder cash. But the bank did not face criminal charges. Molly Scott Cato said:

“While the EU Commission is grasping the nettle and proposing to make it harder for companies and individuals to launder money and evade tax, we discover the Tory government has been proactively colluding with banks to try and prevent them being prosecuted for money laundering. It is clear the Tories believe that some corporations are just too big to jail.

“The Panama Papers have shown the UK to be at the centre of the global network of tax havens facilitating tax avoidance. These new revelations simply add to a suspicion felt by many that post-Brexit the UK will disregard EU rules seeking to crack down on tax dodgers and turn the UK into one of the world’s leading tax havens.

“I have always said, the best way to tackle an international problem like tax avoidance is at EU level. Given these fresh revelations, and the evidence from the Panama papers, it seems inconceivable that a Tory government will take a stronger stand on this issue than the EU as a whole.”

[1] The Panama papers inquiry was formally constituted yesterday, Tuesday 12th July 2016. Further details