Ed Miliband

Ed Miliband

Ed Miliband has challenged David Cameron to say whether he agrees with a former Conservative treasurer’s claim that “everyone” engages in tax avoidance.

After Tory peer Lord Fink‘s admission that he had taken “vanilla, bland” avoidance measures to reduce his tax liabilities, Mr Miliband said the Prime Minister was facing “a defining moment” in his leadership.

But the Labour leader was accused of a “major climbdown” by hedge-fund multimillionaire Lord Fink, after he insisted that his House of Commons attack on “dodgy donors” to the Conservative Party was not directed at the peer personally.

Mr Miliband intervened yesterday in the escalating row over alleged tax avoidance activities linked to HSBC’s Swiss subsidiary by naming Lord Fink – under the cloak of parliamentary privilege – as one of the UK citizens listed as having an account at the bank’s Geneva branch and accusing Mr Cameron of being “a dodgy Prime Minister surrounded by dodgy donors”.

A furious Lord Fink challenged the Labour leader to repeat the allegation outside Parliament and threatened legal action if he did so.

But, with Labour sources making clear that Mr Miliband planned to do exactly that, the Tory peer made a surprise admission to London’s Evening Standard: “I don’t even want to sue Ed Miliband … If he simply uses the words ‘Lord Fink did ordinary tax avoidance’ then, no, I couldn’t sue him. But if he made the statement ‘dodgy’ about my bank account, that was potentially libellous. That was the issue I took exception to.”

He admitted taking tax avoidance measures “at the vanilla, bland, end of the spectrum”, adding: “The expression tax avoidance is so wide that everyone does tax avoidance at some level.”

Speaking in north London shortly afterwards, Mr Miliband said: “Yesterday a Conservative donor challenged me to stand by what I said in the House of Commons. I do.

“And believe it or not, now today he confirmed it as well. He has just said, and I quote, ‘I didn’t object to his use of the word tax avoidance, because tax avoidance – everyone does it’.

“David Cameron must explain why he appointed a treasurer of the Conservative Party who boasts about engaging in tax avoidance and thinks it is something that everyone does.”

Challenged to repeat the “dodgy” allegation, Mr Miliband said: “Lord Fink yesterday was threatening to sue me because I had said he was engaging in tax avoidance, and there was much outrage from the Conservative Party.

“I think this is a defining moment in David Cameron’s leadership of the Conservative Party because it is now revealed that he appointed a treasurer of the Conservative Party who says everyone engages in tax avoidance. I don’t think that is the view of most people, I don’t think it’s the view of the country, and I think it does say something about the Conservative Party and where it has reached.

“The question today that David Cameron has to answer is does he agree with Lord Fink about this? Does he sanction his attitude or does he not?”

Mr Miliband insisted that his use of the word “dodgy” was not specifically targeted at Lord Fink

“I was very clear about what I said about Lord Fink. Until his extraordinary U-turn 24 hours later, the thing he objected to was me saying he was engaging in tax-avoiding activities.

“I used a general comment about dodgy donors in the Conservative Party and I totally stand by that. I am not saying it about Lord Fink.

“But let me just tell you about donors to the Conservative Party. There are several questionable donors to the Tory Party. One donor had to leave the House of Lords after breaking his promise to bring his tax affairs onshore and a firm owned by another donor was fined for involvement in the Libor-rigging scandal.

“I think personally that’s pretty dodgy.”

Responding to Mr Miliband’s comments, Lord Fink said: ‘Yesterday I challenged Ed Miliband to repeat the accusations he made in the Commons – that I used an HSBC bank account to avoid tax and that I was a ‘dodgy donor’. He did not. This is a major climbdown by a man who is willing to smear without getting his facts straight.”

In a letter to Mr Miliband yesterday, Lord Fink said that his claims about tax avoidance activities were “untrue and defamatory” but did not mention the “dodgy donor” comment.