David Gauke
Treasury minister David Gauke gives a response to an urgent question in the House of Commons BBC Parliament

David Gauke defended the UK government's record on tax evasion after it was reported that HSBC's Swiss banking arm helped wealthy clients avoid tax and hide millions of dollars of assets.

The Treasury minister faced a grilling from MPs after a massive leak of documents from the bank, published by the Guardian and the BBC's Panorama, revealed the extent of tax avoidance at the world's second-biggest bank.

The documents were stolen by Hervé Falciani, a French IT expert, in 2007 after he hacked into customer files and fled to France.

While the French authorities detained him, Falciani was not extradited and the files were used to identify and prosecute French tax avoiders.

Gauke said the allegations about HSBC's Swiss branch relate to the period that Labour was in power.

But he admitted, in response to an urgent question raised by Labour's Shabana Mahmood, that the government was first given information about HSBC in May 2010.

"HMRC received the HSBC data under very strict conditions which limited the department's use of it to pursuing off-shore tax evasion and prevented HMRC from sharing the data with other law enforcement authorities," Gauke said.

"Under these restrictions, HMRC has not been able to seek prosecution for other potential offences such as money laundering."

The leaked documents revealed the Swiss accounts of more than 100,000 people, including 7,000 British citizens.

BBC's Panorama programme, which was given access to the leaks, said that a French investigation had concluded that 99.8% of names on the list had probably avoided tax.

HMRC found that 1,100 Brits had not paid enough tax, although the revelations have only led to one prosecution for tax evasion.