Ex-Tory treasurer Lord Fink admits using Swiss trusts to avoid taxes

The Labour Party was jubilant last night after the Conservative Party’s former treasurer and a leading party donor admitted he had set up family trusts in Switzerland to avoid British taxes.

The admission by hedge fund boss Lord Fink is seen by Labour as a major victory, which has sharply ratcheted up its rhetoric in recent weeks about the tax conduct of Britain's wealthiest people.

On Wednesday, Labour leader Ed Miliband had singled out Lord Fink for criticism during a Commons duel with prime minister David Cameron, though Mr Miliband now insists that he had not called him "dodgy".

Having earlier threatened to sue Mr Miliband if he repeated the charges, Lord Fink was seen as having backed off when he said he would not now do so and by admitting that he had taken legal measures to avoid British taxes.

However, one quote from Lord Fink was immediately seized upon by Labour, and will be used relentlessly in the run-up to May when he told the Evening Standard : "Because you are right: tax avoidance, everyone does it. "

Saying he could have saved more if he had indulged in “aggressive” tax planning, Lord Fink said: “I chose the mildest end of the spectrum that I was advised on. What I did was at the vanilla, bland, end of the spectrum.”

Following weeks of being on the defensive, Labour last night believed that it has placed itself on the right side of the public debate about tax practices – which the findings of the latest ITV/Comres poll support.

In it, nearly half of voters polled said they believed Mr Miliband’s recent clashes with business show “that he is on the right side of ordinary people”, while just a quarter see him “as a danger to the British economy”.

More than four in 10 voters believe that the attacks from business on Mr Miliband – most notably from the Monaco-based tax exile head of Boots – were sparked by fears that they would pay more taxes under a Labour government.

Though the tax avoidance row overshadowed Mr Miliband’s long-planned speech on education, the party took comfort last night at the discomfort of Tories dealing with accusations that they represent the interests of the rich.

In his speech, Mr Miliband vowed to increase schools spending in line with inflation, at the least, if he is elected in May while claiming that the Conservatives would cut it in real terms, a claim rejected by them .

“We will take a different path. And we can do it because we have a sensible, balanced approach to deficit reduction. Not a dangerous and extreme one,” he said during a return to his secondary school in North London.

Meanwhile, tax avoidance, or illegal tax evasion, will dominate the British political agenda for weeks to come, in the wake of disclosures that HSBC’s Swiss private banking arm had helped clients to evade large bills.

Top past and present executives in HSBC will now be ordered to appear before the Commons’ treasury committee, and possibly will include former chief executive and chairman Lord Stephen Green.

"Banks have repeatedly [said] since the crisis, they have put in place reforms to ensure that they operate on the basis of sharply improved standards. [We] will need reassurance that they have done so in private banking," said committee chair, Tory MP, Andrew Tyrie.