The BBC is this morning reporting that Barclays is shutting down its “tax avoidance unit”. Or “structured capital markets” team, as it’s euphemistically known.
Now I know our friends at Barclays didn’t take a direct equity investment from the Treasury (not that they weren’t urged to, and not that they didn’t benefit from all the other government programmes introduced at the time as well as from the perception that having propped up RBS and Lloyds/HBoS, the government was never going to let Barclays go to the wall). But still. Did no one tell them that banks had become quite unpopular? And that tax avoidance had become even less popular than it used to be?
The so-called “state-owned” banks were encouraged to shut these units down years ago, although, to be fair, Barclays had pioneered this business in the UK and was already by far the biggest player. Has it really taken Liborgate and everything else that’s happened in the last few years for Bob’s successors to wake up to the fact that this business is a relic? That banks don’t operate in a vacuum any more? That at least the appearance of social responsibility is an implied part of the contract these days?
Barclays will no doubt argue that it was generally “foreign” governments who lost out due to the unit’s activities; and that the enormous profits it generated ended up contributing to Barclays own tax bill. And a small minority will nod and conclude that logically, perhaps there wasn’t that much wrong with a unit like this (ignoring the fact that it’s difficult to argue that Starbucks and co should be brought to book for hiding their revenues away from HMRC when Barclays and co are helping American companies hide theirs from the IRS).
But for everyone else, it’ll stink that this business was still around to get shut down in 2013.