Britain's main opposition Labour party, fighting to take power at a general election in May, said Friday it would toughen the penalties for financial wrongdoing by bankers following the SwissLeaks scandal. The announcement came at the end of a political week dominated by a row over tax avoidance by the wealthy as Labour focuses its campaign on the disparity between the richest and most ordinary voters.
Labour's finance spokesman Ed Balls said it would extend the period in which bankers' bonuses can be taken away from them for "inappropriate" behaviour from seven to at least 10 years. The centre-left party would also introduce a tax on bankers' bonuses to pay for a scheme guaranteeing work for young people who have been unemployed for a year or more.
The clawback rule for bonuses was introduced by regulators last year and aims to discourage bankers from taking unnecessary short-term risks following increased concern since the 2008 financial crisis. Some of the biggest banks in Britain have been found guilty of wrongdoing such as manipulating interbank lending rates and rigging foreign currency markets in recent years. These include HSBC, which is at the centre of claims which emerged Monday that its Swiss private bank helped rich customers avoid millions of dollars in tax.
Labour's campaign for the May 7 general election presents the party as representing the many, not the few and rewarding hard work over privilege. And party leader Ed Miliband this week accused Prime Minister David Cameron's Conservatives of being too close to HSBC. The bank's former chief executive and chairman Stephen Green is a Conservative member of the House of Lords.
Miliband also accused millionaire Conservative donor Stanley Fink of using an HSBC account to avoid tax. Fink later said he had used "vanilla" or widely used, legal tax avoidance measures. Labour rejected outright a media report Friday that Miliband himself had avoided paying tax on a share of his parents' home after his father's death.
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