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This election should be about ridding Britain of the stench of corruption

cash envelopeIt is incredible how the reports of corruption in Britain are now going from bad to worse almost every single day. HSBC’s original lame excuse for the massive tax evasion engineered by its Swiss bank in Geneva was that it was previously run on a ‘federated’ basis so that central controls were much looser. Yet we now find that the HSBC chief executive, Stuart Gulliver, was himself engaging in exactly this tax dodging for his own personal benefit from his own bank, holding £5m in a Swiss account and having his huge bonuses paid through an anonymous company registered in Panama. What adds insult to injury is that instead of being forced to stand down for deliberately profiting from the financial malpractice he was supposed to be regulating and closing down, he is now getting a total remuneration package of some £7.5m as HSBC announces £13bn profits for 2014.

Labour should now be mainstreaming on this deep and expanding scandal to make tax evasion/inequality/bank excesses, along with the NHS and need for the restoration of public services, the central issues for this election. Specifically arising from the HSBC iniquity, Labour should now be demanding redress based on a 3-point plan. First, Gulliver should be forced out on the grounds that he is irredeemably compromised by the latest revelations. In addition, there should be a full-scale inquiry into HSBC dealings over the last 15 years to uncover whether there are grounds to prosecute him and his predecessor, now Lord Green, on grounds of criminal negligence.

Second, this inquiry should also assess whether there are adequate grounds for the bank itself to be prosecuted for conspiracy to defraud the UK tax authorities under the Criminal Law Act 1977 for its activities in a systemic operation to deprive HMRC of due revenue. This of course is on top of HSBC’s known history of Libor rigging, money laundering on behalf of drug cartels and pariah states, and PPI mis-selling. The outcome of this inquiry should lead to a decision as to whether the culture of HSBC is now so grossly polluted that it should be broken up.

Third, Osborne’s response to promise new financial and civil penalties for those who facilitate tax evasion and aggressive tax avoidance badly fails to hit the mark. It notably excludes criminal penalties when it is only the threat of chief executives and/or other top executives being sent to prison for tax evasion or wholly artificial tax avoidance contrivances which will fundamentally change the current corrosive City culture. Mere financial or civil penalties are thoroughly inadequate because the bank (i.e. the shareholders) pay the fines however large they are and the executive perpetrators are let completely off the hook.

This is not just a one-off scandal. The stench of corruption among Britain’s elites as revealed over the last few years – banks, MPs, media (hacking), police, corporate and super-rich massive use of tax havens, etc. – has now become so pervasive and suffocating that this election must now be centred around a relentless demand to clean up Britain.

3 Comments

  1. David Pavett says:

    The Straw case rather suggests that there are too many people at the top of Labour thinking about their career prospect inside and outside Parliament for a serious assault on corruption to be on the books. Besides, the only really effective antidote to corruption is a strong culture of commitment to openness, transparency and intelligent debate involving differing and well-supported points of view. Does that sound like the Labour Party? Does it sound like a charge that will be led by Ed Balls and Chuka Umunna?

  2. Barry Ewart says:

    Spot on Michael! I attended a public lecture a few years ago by Dr Ha Joon Chang and he argued that we should all read the financial pages of the newspapers to make ourselves economically aware citizens and I have done so ever since (The Guardian and sometimes if there is a free Times in the pub). We should all do this and the things you learn about the rich and powerful in their parallel universe. Labour should make capital from the latest bankers bonuses – as we are all on average £1,600 a year worse off how are those who caused the mess doing under austerity? Barclays are to give £2b in bonuses, HSBC the bank on whom tax dodgers can rely (helped 7,000 of the richest people in the UK avoid tax) and were fined £2.4b for fixing foreign exchange rates – still to announce bonuses. Profits down to £13b and we will have to see the size of heir bare faced cheek!
    Lloyds (24% tax payer owned) fined £226m for rigging Libor in 2014 – to give £375m. RBS (tax payer bailed out) fined £400m for manipulating foreign exchange markets is to give £500m oh and Lloyds CEO is to get £7m and 7 senior managers may share £20m (Guardian 20/2/15). Footnote also according to the Guardian Hedge Funds have given £50m to the Tories since the last election and in April the Tories gave tax cuts to Hedge Funds of £150m! But my favourite story comes from a few years when the CEO of Royal Dutch Shell saw its first quarter profits go down by £10b (what would happen to you at work if this happened to a budget you were in charge of) and what happened to him? Yes you are right he got a £2.6m bonus! And how many people are now dependent on Tory Food Bank Britiain!

    1. Robert says:

      Labour speech to night. will be labour is the party or working people.

      1. Balancing the books fairly

      2. A pay rise for hardworking Britain

      3. Control immigration

      4. Opportunities for the next generation

      5. Backing Britain’s businesses.

      Where are the SNP when you need them sitting in Scotland when we need them in the rest of the county.

      The Tories spoke about those on welfare those on pension while labour is now the party of working people it’s in the name, what Progress ….

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