When will bankers learn the difference between the law and morality?
What a wheeze, Barclays’ lawyers must have thought when they came up with two perfectly legal schemes to save £500m in tax. Barclays has long been adept at avoiding tax; with its 300 subsidiaries in tax havens it gave out 30 times more in bonuses than it paid in UK corporation tax in 2009.
Yet that year its chief executive, Bob Diamond, signed the Government’s code of conduct on tax and publicly proclaimed that “rebuilding trust requires banks to be better citizens” by generating tax for the public purse. So alarm bells should have rung when he saw plans for the bank to buy back its own debt and generate tax credits where tax had not been paid in the first place.
Sure enough the authorities have found, to Barclays’ embarrassment, that one scheme is in breach of the code and the other of the spirit of the law. Banks’ inability to distinguish between legal and moral responsibilities was at the root of the global financial crisis. Little, it seems, has really changed.
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