Ed Miliband accuses Fink of U-turn in tax avoidance row

ED Miliband has accused Lord Fink of an “extraordinary U-turn” after the Tory donor appeared to drop his threat of legal action over tax avoidance claims.

Lord Fink had accused the Labour leader of making defamatory comments in the Commons about his tax affairs.

But the peer told the Evening Standard he did not want to sue Mr Miliband and the definition of tax avoidance was so broad that “everyone does it”.

Mr Miliband challenged David Cameron to say whether he agreed with that view.

Downing Street said the tax evasion row was entirely a matter for Lord Fink and Mr Cameron’s view was that “taxes that are due must be paid”.

Meanwhile, BBC business editor Kamal Ahmed says he understands the Treasury is preparing legislation to tighten the rules on undeclared income held in offshore accounts.

Lord Fink said he particularly objected to Mr Miliband’s use of the word “dodgy” in his attack on Tory donors in the Commons.

He said: “Yesterday (Wednesday) 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.”

He did not mention the word “dodgy” in his letter of complaint to Mr Miliband following prime minister’s questions.

But although the Labour stood by his words in the Commons about tax avoidance, he claimed that he had not been referring specifically to Lord Fink when he talked about “dodgy donors”.

Mr Miliband said: “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.”

He said there were “several questionable donors to the Tory Party”.

The row erupted when a list of political donors, including some who had given money to the Labour Party, who had bank accounts with HSBC’s private Swiss banking arm was published by The Guardian and the BBC’s Panorama.

The bank faces allegations it may have helped wealthy clients avoid or evade tax.

Mr Miliband used the protection of Parliamentary privilege to name Lord Fink, a philanthropist and former hedge fund boss who has donated £3m to the Conservative Party, as one of the UK citizens listed as having an account at the bank’s Geneva branch.