Absolutely outrageous, says the Royal Bank of Scotland

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My friends down at Private Eye have been doing the sort of thing that only they do best, like asking awkward questions.

Having noted questions here about the future of offshore activity by our nationalised banks they thought they'd pop a question or two to our favourite offshore banks: you know, the ones who housed the undeclared offshore accounts of tens if not hundreds of thousands of UK residents who failed to mention the fact to HM Revenue & Customs until they had an amnesty in 2007, when at least 42,000 admitted to the offence at the first time of asking.

So what did our friends in high places have to say? Try this (full information in the latest Eye: go and buy it for the full story):

Lloyds TSB - "[The bank] has never assisted customers to avoid tax liabilities and we worked with government in helping to shape the EU Savings Directive to counter tax avoidance. On its own account Lloyds TSB complies with all its statutory obligations in paying tax". (The savings directive is widely regarded as useless in this respect).

HSBC - "We have no comment to make on how we manage that business".

Royal Bank of Scotland - "It is absolutely outrageous to suggest that RBS is using subsidiary companies in offshore locations for the purposes of tax avoidance. Through [RBS International] and Coutts we have substantial offshore banking operations in locations such as Jersey, Guernsey and the Cayman Islands for the use of corporate and wealth management customers and these businesses operate with the full approval of all the appropriate regulatory and tax authorities both in their own jurisdictions and in the UK".

For some reason HBOS and the country's most notorious tax avoider, Barclays, declined to comment.

These comments are staggering. That from RBS is the most revealing. For them to say that they use Jersey, Guernsey and the Cayman Islands for their wealth management customers that have no engagement in tax avoidance is blatant dissembling.

The truth is that RBS is blatantly and outrageously promoting tax avoidance to undermine the taxation revenues of the UK government, and in doing so it completely ignores its responsibility to report suspicious transactions undertaken through its bank to local money laundering authorities.

I know this true: in 2006 not one case of suspected criminal money-laundering occurred in Jersey and yet tax evasion in a foreign state would be criminal money-laundering under the rules of their financial services handbook. That must mean that RBS did not report suspicion with regard to any of the accounts that in 2007 turned out to be used for the purposes of tax evasion, some of which (indeed many of which) they undoubtedly ran.

I do not believe it possible that they did not have suspicion of that fact. Suspicion was the only criteria required for reporting to be necessary if the local law was to be complied with. But they did not report.

In that case the only thing that is outrageous about their conduct is their failure to comply with money laundering rules in the places in which they claim to be fully approved, and their failure to support the state which has now bailed them out.

But it is still only Vince cable amongst all our senior politicians who is making the point that we are in these banks they should not be undermining our taxation revenue. Why is that? And how long can this absurd situation last before intervention must take place?