There was a time when people who held money and other valuables in overseas bank accounts and vaults probably did it so HMRC and other law enforcement authorities would have difficulty finding out what was there, who controlled it, and how it got there. One might assume that if this was their only reason, then they probably did have something to hide. Fair enough to call them 'dodgy'.
Of course 'dodgy' people still use overseas bank accounts to hide their money and to evade or avoid tax. But Switzerland is no longer a sensible place to conceal your wealth and identity. Criminals and tax avoiders today would probably choose other jurisdictions. So why do thousands of law-abiding, honest and probably largely charitable people still have Swiss bank accounts?
Well I can't speak for anyone else, but I have two Swiss bank accounts. They were both established for the same reason - so foreign fund managers could more easily manage my portfolios of investments... and because I can remember the queues outside Northern Rock.
Miliband is hoping most people will think that it's cash being held in those Swiss banks. In my case, very little of it is cash. The vast majority is held by the banks in the form of assets such as stocks and bonds. The banks act as nominee owners on my behalf. They also provide valuations of my holdings so my portfolio managers can decide whether to hold or sell them, and prepare statements for whoever needs them - including HMRC. Swiss banks are very good at doing all of this.
Each bank (J Baer and Schroders) supply full statements to my UK accountants for the purpose of ensuring my UK tax return is accurate and complete. None of the trades those fund managers perform on my behalf are done to avoid and certainly not to evade tax. They are tasked to maintain the value of those portfolios (which a savings account at any bank these days would not. You'd lose money year after year), and to sensibly grow them by investing across a wide range of assets classes. All income, gains and losses (of which there are always plenty) arising within these accounts are correctly and fully reported every year to HMRC, and I pay the tax I owe. In fact the better they are at making me a bit wealthier, the more tax I pay to share that good fortune with the country I have decided to live in. I am happy and privileged to pay UK tax and my Swiss banks help me to do this.
But there's another reason why some of my wealth is held in non-UK banks. This is a list of all the US banks that failed since October 2000. At a rough count there were 560. The vast majority were admittedly taken over by another bank - no doubt terrifying their customers in the meantime - but 38 were not. Presumably everyone who put their trust in those 38 banks lost all their money. And here is a list of the 60 largest financial institutions who failed worldwide since 2007. Many of them were British who were rescued by the British taxpayer one way or another. They were too big too fail. Would our cash-strapped government rescue them today? Lehman Brothers famously was not saved by the wealthiest country on Earth.
In the UK every saver is guaranteed to receive up to £85,000 by the government if their UK bank fails. What most people probably don't know is that if they (sensibly) spread their savings and investments across multiple banks, building societies etc, and the owner (technically the Licensee) of those banks goes down, eg The Bank of Scotland who owns many high street brand names, they would only get £85k for the lot. So if you've got more than £85k in a British bank or several British banks - you're seriously at risk if there's another run on them.
Switzerland is traditionally known as a safe haven for the wealthy. It rarely gets involved in wars (too many mountains presumably for invading armies) and it has a reputation for hoarding cash and gold. It's where the wealthy put their money. It's therefore the last place you would expect to run out of it. If the wealthy ever do a 'run' on their banks, we're all screwed. And they all know that if they felt they had to take it out of Switzerland, there's nowhere left for them to go. It's simply the country of last resort. So Swiss banks should be the last to fail. At least that's the hope. However, their biggest bank, UBS, did need rescuing after the 2008 crash. So maybe you're simply not safe anywhere these days.
But the point is that Switzerland is safer than the UK, especially, as recent history teaches us, if there's a socialist government in charge of the economy.