Cameron's trade minister in the firing line over HSBC scandal

Labour says Tory minister Stephen Green, the bank's former head, has "serious questions to answer".

It was with a hint of mischief that Labour declared this morning that trade minister and Conservative peer Stephen Green, the former executive chairman of HSBC, had "serious questions to answer" over the drug money laundering scandal. It was this formulation, of course, that George Osborne employed in his now-famous attack on Ed Balls over the Libor scandal.

Labour's cause is aided by the fact that the former is by far the greater scandal. In the words of US senators, HSBC was used as a conduit by "drug kingpins and rogue nations" to transfer billions in illicit proceeds to the United States betwen 2004-10. The bank's culture was, they concluded, "pervasively polluted". It was Green, who left HSBC in December 2010 to take up his ministerial post, who was at the bank's helm throughout the period in question, first as chief executive and then as group chairman.

During his time at HSBC, he was widely regarded as the acceptable face of banking. An ordained Church of England priest and the author of Serving God? Serving Mammon?, a reflection on the morality of capitalism, Green wrote in the New Statesman in 2009 that "the value of our business is dependent on the values with which we do our business. Better risk management, enhanced regulation, codification of directors’ responsibilities in company law – all these things are necessary. But they are not, nor can they be, sufficient without a culture of moral values. As individuals, we do not regulate our behaviour simply by what is allowed under the law. We take responsibility for our actions. The organs of capitalism – businesses, banks and other financial institutions – have to do the same." Laudable words, but Green must now explain why HSCB entirely failed to live up to them.

The bank now faces a "substantial" fine of up to $1bn and a criminal investigation by the US Department of Justice. Should evidence emerge that Green was either unwilling or unable to intervene, his position could be under threat.

Trade minister and Conservative peer Stephen Green led HSBC from 2003-2010. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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