21 Sep 2009

One year on, but what's changed?

So it’s been reported that a bank WE own is being investigated by Her Majesty’s Revenue and Customs for allegations of involvement in tax avoidance.

This is probably the issue I have blogged about more than any other since Snowblog dawned – tax havens and tax avoidance, and the Channel Islands have never been far from the discussion.

I am not in the habit of cross-promoting the BBC. But clearly the BBC’s Panorama programme is on the right button tonight.

The secret filming revolves around a Lloyds bank employee telling an undercover reporter that income earned on monies deposited in their particular Channel Island, could be paid via Hong Kong to ‘get round’ the European Savings Tax Directive is clearly instructive.

Lloyds has denied any wrongdoing in its offshore practices and said it has suspended the employee in question pending an internal investigation.

Lloyds said: “Any advice we offer customers is made within the context of the robust anti money-laundering systems and processes we have in place. These processes are designed to ensure that colleagues are able to identify and report any suspicious activity on the part of our customers.”
 
They continued: “We have been provided with information by Panorama which could suggest serious misconduct by a member of staff in one of our Jersey offices. We take these allegations by Panorama very seriously and a full and comprehensive investigation into this matter is already underway. The member of staff has been suspended pending the outcome of our investigation. If the investigation concludes that serious misconduct has occurred, then the company will take the appropriate disciplinary action.”

We keep being told that the Channel Islands tax haven activities have been closed down. You and I have so far spent £17 billion on Lloyds.

It all goes to the very heart of two pledges made by the government in the aftermath of the crash year ago – firstly to tackle tax avoidance and effectively to shut down tax havens – secondly to shut down the myriad efforts by onshore banks to assist their customers to ship their UK earned income off-shore to avoid paying tax.

And here is Panorama with a credible allegation that a bank WE own are engaged in doing just that.

We are one year on from the crash, what’s changed?

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14 reader comments

  1. Ray Turner says:

    Nothing much has changed. The Banking System is still as self-serving as it was prior to the meltdown. Gordon has made a monumental mistake by reflating the old failed system, patching the balloon that leaks our money with lots of wet £50 notes….

    We really needed to take the opportunity to rebuild the Banking System from scratch, but didn’t take it. The bankrupt Banks should have been allowed to fail, once our deposits were secured…

    I suppose the one thing that has changed though, is that savers are still being taken for a ride whilst the debtors are living the life of Reilly: thanks to the significant reductions in the cost of the interst that they have to pay. That irks me more than anything. Its not how things should be. The sooner interest rates start going back up again, to about 5% (which is fair to everybody), the happier I’ll be…

  2. margaret brandreth- jones says:

    I have my own reasons why large amounts of money can dissapear down a black hole and firms can be pushed into liqiuidation and the vicitms criminalised.

    Dr Martin though talks of semiotics , a feminine philosophy concerned with influence from the womb. MMM snobishness.

  3. Natasha says:

    Sadly nothing has changed and this current news item does not surprise me.

    Historically, there are periods of boom and bust. Banks are only interested in one thing…profit at any cost.

    Even in light of the bonus scandals from last year, a number of banks are fighting to ensure that the bonus culture remains.

    The only certainty is that we “the public”, will continue to pay for the banks “greed”.

  4. Anthony Martin says:

    Really Jon, did we expect any change? There are many people in my own town that are so greedy and corrupt, that they’ll resort to any means to avoid paying Tax. Just like these bankers, their greed, corruption, influences, political connections, etc knows no bounds.
    This may sound OTT (Over The Top) but, these people have caused more damage to the millions of peoples lives and the stability of this country by milking this UNRESTRAINED Capitalist system, than so called ‘Terrorists’. When millions of poverty lives are made even worse, to the point of not worth living, those responsible should be arrested and, imprisoned and all their hidden monies reined in.
    When I keep stating that Britain is a Dickensian Police State and, the media is mainly controlled by the rich scum & political elite, this banking situation is a small example of what I’m talking about.

  5. Edward Harkins says:

    Well with the unelected, twice previously disgraced, Lord Mandelson at the helm of the Labour Government’s Industrial and business policy, I can’t see that there will be any much willingness to learn anything from this debacle of which he and his fellow Ministers are party to. His over-whelming arrogance and distain for a common-gardener journalist who dared to door-step him and asked fair and pertinant questions (on which he had refused an inteview?) was most instructive. Then consider that alongside Gordon Brown’s performance on the current BBC ‘Love of Money’ documentary. Together, these performances tell you much about just how little these guys accept any personal culpability or display any intention of upsetting their counterparts in the banking world.

  6. Toby Blume, Urban Forum says:

    This news, sadly, doesnt surprise me. For all the talk of ‘radical banking reform’ from politicians, there’s little evidence of appetite for real change. The banking reform white paper (and the Tories’ proposals too, for that matter) do little to ensure recent mistakes are not repeated. The White Paper mentions ‘competition’ over 100 times, but ‘fairness’ only twice. Draw your own conclusions….

  7. Saltaire Sam says:

    Jon,
    Of all the inequalities in this country, the percentage of income paid in tax – direct and indirect – by the poor compared to the rich must be right up there at the top.

    On income tax, the wealthy duck and dive and pay as little as possible, often none, while the lower paid just have the full amount taken out before they even see their pay.

    Indirect taxes are even more unfair – the tax on a litre of petrol is identical for someone earning £10k, £100k or £1m a year.

    Yet politicians of all parties are talking about cutting services to solve a problem created by greed, rather than having the courage to tell the wealthy they must contribute their fair share. And there is hardly any protest.

    Somewhere along the line – and a finger of suspicion points to Mrs Thatcher – we have created a world where the majority believe that ‘greed is good’ and rather than hoping politicians fix it, they want to get on the gravy train.

    It is almost unbelievable that in what must be the worst year for capitalist ideas in almost a century, the left has been supine.

  8. RedJoe10 says:

    I totally understand your frustrations on this, how can it be that we are seemingly powerless to intervene at any level in the banks that we practically own? What WAS the point of saving them if what they seem like they want to do is go back to the bad old days?

    One hoped that the banks themselves would have shown some kind of repentance over their actions and followed a more moral path after being saved from the brink of oblivion…

  9. margaret brandreth- jones says:

    Again, as I attempted to say before, in the vagueness of tiredness, is that the corruption over the last years seems to have been a long standing knock on effect. Laundering of money from the small businessness of 25 years ago seems to have snowballed out of proportion.( no pun intended Jon)

    Then in the days of Margaret Thatcher , because of general greed , it was almost accepted that the winner takes all, “by foul or fair means” and it has been hard finding an exit to jump off that cycle ever since.

    I am interested to know the scale of this deception many years on .
    Many small businesses were “put out” by larger firms which seemed to employ these ex firm owners, then those firms were taken over by larger companies , then finally sold off shore.

    I bet that wasn’t the original plan.

  10. Margery Dawes says:

    Thanks Jon – great work as ever. Have just caught up with this week’s Panorama on iplayer. I am getting a bit fed up with being patronised by bankers (most notably Angela Knight from the BBA) saying that these bonuses (funded by us) are required to attract the best people. It’s a similiar playground refrain to the “we acted within the rules” employed by MPs during the expenses scandal. The economic crisis was caused by “the best people” – just how bad would it have been if we had attracted the worst people??

  11. al brace says:

    I’m reduced almost to tears of Rage and
    Frustration that such arrogant contempt this disgraced(twice) creature displays to anyone daring to ask questions pertinent
    to us all. His disdain for us “little people” is
    unbelievable in the light of his unearned
    elevation thru the ranks. I wonder what he
    knows and about who that gives him such
    power. Still, look on the bright side, he and
    his fellow cretins don’t have a hope in hell
    of ever being re-elected so we’ll soon be
    rid of Gormles Gordon, then perhaps we’ll
    have an elected Prime Minister and,who
    knows, the return of a semblancet of
    democracy! PS I keep airing my views but
    never printed–am i too radical??

  12. al brace says:

    I think that tthe people ,not just of this country but thro-out Europe, have come to accept corruption at the top as normal, and
    short of a Revolution nothing will ever alter
    it. Let’s face it , we the people have had the
    s–t kicked out of us and are now too down-
    trodden/bewildered to fight any more, we
    have completly lost heart knowing that we
    have nowhere to turn for help!

  13. Steve Willis says:

    The banks still operate a cartel setting the LIBOR rates at which they lend to each other – when’s the OFT going to look into this?

    Credit card suppliers are pushing interest rates up into the 20% plus bracket and refuse to detail why. I assume it’s because they failed to manage risk so badly, they’re now making up for their lack of due diligence by ripping off the customer.

    I wonder how many Risk Managers were sacked by the banks for poor performance? I’m guessing; zero – and they’ll still be in post for a nice bonus.

    Like many people, I feel totally powerless and unrepresented by Members of Parliament. During this month Parliament re-opens after 82 days holidays and freebies. If we had any guts as a nation we’d march on the place and occupy it until we got the General Election we deserve.

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