The warnings about Barclays’s tax-dodging greed were there in 2008

Cormac Hollingsworth explains how the warning signs for Barclays’s tax-dodging were there back in 2008.

 

As Lord Wood said today:

“The occupy protest against corporate greed in London was disbanded on the day Barclays were revealed to have used a loophole to avoid paying £500 million tax.”

Cormac Hollingsworth explains the background behind the Barclays deal…

Bob Diamond’s Barclays Bank has been caught by the UK tax man trying to help two clients avoid tax on half a billion pounds, it was revealed by the FT yesterday (£).

The tax authorities described the schemes as “highly abusive” and HMRC are changing the law to close the loopholes exposed.

Bob Diamond, the man who a year ago told the Treasury Select Committee that “the time for banker remorse is over,” is clearly taking this beyond the boundaries of acceptability.

As Richard Murphy has blogged last night, Barclays had signed a code of conduct on taxation that these transactions explicitly looked to dodge.

But the warnings were there, back in the financial crisis.

Barclays shareholders were up in arms at the deal that Bob Diamond cut with the Qatari and Abu Dhabi states that bailed out Barclays bank to the order of £7 billion. The deal paid 14 per cent, while a comparable deal from the UK government was a 12 per cent coupon (for example, that’s what RBS had to pay).

There had to be a reason why Barclays board preferred to pay the higher coupon to avoid the UK becoming its shareholder, and that reason is now clear. With the UK government as their shareholder, their highly abusive tax deals would have been stopped.

See also:

ECB bailing out British banks exposes coalition’s finance failure – Cormac Hollingsworth, February 27th 2012

Transparency, accountability, responsibility: Miliband’s “one nation banking” principles – Shamik Das, February 3rd 2012

A word for 2012: Liquidation – Cormac Hollingsworth, January 4th 2012

Implementing Vickers won’t stop the next crisis – Josh Ryan Collins, December 20th 2011

The challenges for Labour in developing a credible banking regulation policy – Matthew Pitt, September 2nd 2011

17 Responses to “The warnings about Barclays’s tax-dodging greed were there in 2008”

  1. Anonymous

    So not a peep about the tax evasion on Ken Livingstone. Ah yes, tax evasion is just for non socialists.

    The real problem with this is the message it sends. It is that the government will change the law when its suits it, and retrospectively.

    The good thing, is that we can now change the law to make the Labour party and all its members retrospectively liable for the mess left.

    How are you going to pay your share of 150 bn a year?

    Ah yes, not a peep of complaint.

    It sends the message, business is not welcome in the UK. Incorporate elsewhere where the law isn’t arbitrarily changed to extract more cash.

  2. Shamik Das

    The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  3. Soupy One

    The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  4. Steve Bainbridge

    RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  5. Stephen Scullion

    RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  6. keith ferguson

    RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  7. Michael Reilly

    RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  8. Alan Marshall

    RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/BcCiVAHy

  9. Mr. Sensible

    I’m afraid that’s just a ridiculous comment, Lord Blagger. Of course business is welcome in the UK, but it just isn’t fare that it can get off paying taxes like that. And as for the right’s continuous misrepresentation of the situation with regard to the national debt, which is going up because of austerity…

  10. Pucci D

    RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  11. gerard dean

    RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: //t.co/noKu3HWI

  12. JC

    If our politicians are so useless that they can’t define what tax a company should pay, we should be lobbying them to change the tax system. Complaining about companies that ask whether a method is legal is pointless.

    And I agree with LordBlagger, the idea that a government can make something illegal that was legal when it happened is uncomfortable. It makes it very difficult for companies to plan ahead.

  13. Anonymous

    The aren’t getting off taxes.

    The law was the law. Barclay’s paid what was due under the law of the land. They complied fully.

    The government didn’t like that, so it retrospectively changed the law just to get Barclays and 500 million in extra taxes.

    The national debt is going up because the government is spending more than it earns, and putting its debts off the books.

    So, challenge for you, because its the question the left won’t answer.

    How big are are all the off the book debts such as PFI and pensions. [Hint, its around the 6 trillion mark]

    Also how about some retrospective taxation for the tax evading Guardian and Ken Livingstone. Should the law be retrospectively changed to get them?

  14. Anonymous

    In addition the real problem is the message it sends. The UK has a government that won’t honour its promises or even keep to the law. It will make it up as it goes along.

    Given the choice as to where to open a new business, the UK looks less and less attractive.

    Couple that with the wide spread corruption from MP and Peers on their expenses (Still being covered up by Civil servants like David Beamish making it a state secret), to police and officials being bought by Murdoch and others.

    It’s going all Lagos in the UK.

  15. Cormac Hollingsworth

    While Barclays takes another bailout from another country £7bn from the ECB this week all to finance more tax positions //t.co/bHqLF2tJ

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