Margaret Hodge MP: The pocket-sized folk hero for recession-hit Britain

The chair of the Public Accounts Committee admits her pursuit of tax wrongdoing was not planned but ‘just happened’

Margaret Hodge admits her pursuit of tax wrongdoing was not planned but ‘just happened’ (Jason Sutcliffe)

Did Margaret Hodge go too far on Monday? The chair of the Public Accounts Committee has been a pocket-sized folk hero for recession-hit Britain, battling against the arcane tax arrangements of some of the biggest companies operating in this country.

But the finger jabbing went into overdrive for the latest evidence-gathering on HSBC’s tax affairs. Locking horns with Rona Fairhead, a non-executive director at HSBC, Ms Hodge, 70, called for her head as chair of the BBC Trust.

“The grandstanding Queen of Mean,” one newspaper columnist said; “she has started to believe her own publicity”, summed up another, while the former Tory minister Sir Alan Duncan said Ms Hodge had been “abusive and bullying”.

The Labour MP’s response: “All I can tell you is you should see my Twitter feed and email. I think on the whole people like what we have done. That is the punters, rather than the commentators.”

She adds: “I lost my cool, I admit to that. But … if you are protecting licence fee payers’ money you need to demonstrate integrity and competence and I don’t think she [Ms Fairhead] had done that.”

The end is nigh for Ms Hodge’s reign. She could chair the PAC again if Labour did not win the election, but she is already surveying the Pugin-inspired walls of her Commons office, wondering where her picture will fit next to the men-only row of her predecessors.

Hodge could chair the PAC again if Labour do not win (Getty) (Getty Images)

“I won’t give up on this,” she vows of her crusade. Ms Hodge will fight her seat in Barking, of course, and then who knows? The firmest idea she has is to write a book about the past five years, with “some interesting chapters about tax but also to tell a few stories, so it can be both personal and public policy”.

Her route into exploring corporate tax affairs, avoidance and alleged evasion, was the PAC’s remit to probe the efficiency and effectiveness of HM Revenue & Customs.

“I think they’ve got better; let’s be positive,” she says, but wishes that the taxman’s budget was beefed up so it could litigate more often in a bid to capture some of the £34bn it says eludes state coffers every year.

“I don’t understand why they haven’t taken Google to court,” she says, exasperated. From a brown envelope she received concerning Goldman Sachs’ tax deal, everything mushroomed. There was a boycott of Starbucks lattes; she won a round of applause on entering the Commons tearoom after one particularly forceful interrogation.

“I’d love to say it was all planned and intended; it just happened,” she adds. Spurred on by a change in public attitudes, she would like to see far greater transparency in company dealings with the taxman, plus a simplification of the system.

“Every tax relief becomes an opportunity for tax avoidance. It is ridiculous we have over 1,100 tax reliefs.” And then there is the power of public procurement. Why not withdraw government contracts from any company found to be avoiding tax?

On some fronts, she ran out of time. “We haven’t yet touched the lawyers who play a very negative role in signing off aggressive tax avoidance schemes,” she says. “If you could create offences around all of these people you cut it very quickly.”

Last up to have a strip torn off, as it stands, is the former HMRC boss Dave Hartnett, who is giving evidence a week on Monday on HSBC, which is alleged to have colluded over tax evasion and avoidance by its customers. Not only was he in charge when a leaked list of 6,000 former clients of HSBC’s Swiss arm was handed over, but he later became an adviser to the bank on financial crime. Going back to that challenge on Ms Fairhead, something runs deeper, Ms Hodge explains.

“I am part of it, right. I am part of the establishment now and this tendency, if you are in there, if you are part of this magic establishment, whether it is business or government, you tend to think it’s ‘anything goes’, there is a different set of rules by which we have to play.

“You may argue I challenged her too hard but what I then think about is all my people in Barking who mostly pay their tax without ever thinking. It just feels that we mothball the establishment into a conspiracy of silence and we allow different standards.”

That answer makes it all the more surprising that the PAC hasn’t called Lord Green, HSBC’s former chairman who was appointed as a trade minister by David Cameron, to answer his critics over this scandal. Here, Hodge uncharacteristically clams up.

“That is just a committee decision,” she says, numerous times, on being pressed. “In the end, we do these things by consensus and the committee’s view was that they didn’t want to call Lord Green.”

It is no surprise critics have interrogated Hodge’s background (Getty) (Getty Images)

Given her prominence, it is no surprise that critics have interrogated Ms Hodge’s background, which includes working for PwC (she was a public sector consultant, not a tax adviser), and the family steel firm Stemcor (the source of her independent wealth).

“My understanding is the company is in some difficulties at the moment. It’s out of our control but they have always paid tax properly. It would be completely hypocritical if it was otherwise, OK,” she laughs loudly. “Absolutely 100 per cent, I wouldn’t be a hypocrite.”

Despite her PAC activities, she says beating the British National Party leader Nick Griffin in the fight for her Barking seat in 2010 was “probably my most important political contribution”. That election battle was made all the more poignant given that Ms Hodge had lost her husband, Sir Henry, a few months previously.

“It was really hard. In fact, the easiest thing would have been to run away and I was quite tempted. I was already over 60, I could quite easily have changed my whole life. But because the battle was about the heart of my politics, the belief in equality, I couldn’t run away. I put my all into it.”