Lord Fink has confronted Ed Miliband over his allegation at Prime Minister's Questions that the peer was engaged in 'tax avoidance'. In a letter, Fink says Miliband should repeat the allegation outside the House of Commons, or withdraw it.
You can read the full text of the letter below. Miliband's question did seem to go further than the Guardian article published before PMQs that named Fink. The article said:
'One of the Conservative party’s recent treasurers, Lord Fink, formerly Stanley Fink, is revealed as having made the most of a four-year posting to Switzerland while working at hedge fund the Man Group.
'He opened Swiss accounts with HSBC in 1996 and 1997, which banked Man Group shares held in UK-registered bare trusts designed to minimise capital gains tax and future inheritance taxes. Most of the trusts were wound up when he returned to London.
'Fink said they were fully declared and tax paid on all the dividends they received. “I was Swiss-resident … the only reasons I opened bank accounts in Switzerland was the ordinary management of my current affairs. To the extent I created any trust accounts, these were perfectly normal planning matters, and could have been set up with similar effect, without the Swiss bank being involved.”'
But in the Chamber Miliband said:
'Let us take Stanley Fink, who gave £3 million to the Conservative party. The Prime Minister actually appointed him as treasurer of the party and gave him a peerage for good measure. Will he now explain what steps he is going to take about the tax avoidance activities of Lord Fink?'
This does seem to be the first direct allegation of tax avoidance. So what does Miliband do now? If he withdraws the allegation, then it suggests he was just scoring political points in the Commons. But if he repeats it outside the Chamber, then he risks legal action. This could be one of the biggest battles the Labour leader picks.
Lord Fink's letter
Dear Mr. Miliband,
Today at Prime Minister’s Questions, you alleged that I had undertaken ‘tax avoidance activities’ in Switzerland: ‘Let’s take Stanley Fink who gave £3 million to the Conservative Party. He actually appointed him as Treasurer of the Tory Party and gave him a peerage for good measure. So now can he explain what steps he is going to take to find out about the tax avoidance activities of Lord Fink?’
This allegation is untrue and defamatory.
These are the facts:
I was posted by the Man Group to run their office in Switzerland for four years from 1996 until 2000.
During this time I had need of a local bank account to do simple things like receive my Swiss Franc salary and pay grocery bills.
As I already banked with HSBC in London, I set up an account with HSBC. I subsequently set up an account with Credit Suisse as they had a branch much closer to my home and office.
I submitted tax returns in both Switzerland and Britain showing my revised tax status, which was accepted by the Inland Revenue.
I find it extraordinary that you have made claims against me that are without foundation or without contacting me.
I challenge you to repeat your allegation outside the House of Commons – or to withdraw it publically.
Lord Fink of Northwood