Barclays ‘saved’ by Roger Jenkins

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All reports seem to agree that Barclays' negotiations with its new backers in Qatar and elsewhere were undertaken by Robert Jenkins. He is a man I have written about before.

The Sunday Times says of him:

Jenkins is known primarily as a tax expert. The 52-year-old is famous for devising complex structures that ferry profits around the world, helping companies to minimise their tax bills.

Tax experts credit him as the leading authority on "double dipping" - in which companies get two sets of tax deductions from two different countries. Although there are no legal improprieties in such arrangements, they are the scourge of governments around the world.

Jenkins also heads Barclays Capital's private-equity and structured financing businesses.

But let's be clear about this. Double dipping is plain straightforward abuse of the international tax system. It is not so much complying with the law, it is more about seeking to use that law in ways that no tax authority ever intended. And structured financing is exactly the same. It is artificial construction of what may, or may not be a commercial deal to secure a tax advantage for which there is no economic justification.

This is blatant exploitation of public property to secure private gain. Of course it is not in the criminal sense theft. In the moral sense it is. And please do not for one minute say there is no morality in taxation. The decision to participate in these transactions is a moral one: no one requires Barclays to abuse the common wealth of governments and the ordinary people they represent in this way, any more than no one requires Lloyds TSB or Royal Bank of Scotland to undertake similar transactions, and yet all do.

I am furious about this. I was asked to take part in a television programme to be broadcast tomorrow, debating with the right-wing historian Niall Ferguson whether or not the current takeover of the banks is the inevitable outcome of a Marxist ideal of the ownership of capital by the people. I did not do so partly because I was unavailable at the time when the broadcast was to be made, but also because I think that analysis is wrong (and anyway, I'm not a Marxist or a Marx scholar). What is actually happening here is something much more sinister, and the nearest equivalent to it that I can think of was the Enclosure of the Commons, by which property which was the natural right of ordinary people was seized for the benefit of an elite.

I think that is happening again. Unless we take very radical action now to make sure that the funds being provided to our banks are really applied for proper social purpose, the development of new common wealth and the social enhancement of our financial services systems then we will simply see that money being captured by a social elite for the purpose of their own advancement, whether by payment of enormous continuing bonuses, or by capture of that capital to pursue their particular objectives which are in direct conflict with those of most of us in society as a whole.

I have no doubt that Roger Jenkins is one of those who is seeking to capture the public good that is represented by state funds now being made available to banks for the benefit of his own social elite. The funding question may not come from the UK government. I do not care about that. The process remains the same.

I have already explained that this requires proper nationalisation of the banks in which the UK government has taken a stake. It also requires radical reform to the banking system, not minor tinkering at the edges. It will also require closure of tax havens, an objective that is entirely feasible.

So I do not accept for one minute that this is a process of Marxist inevitability. I think that analysis wrong, not least because we are seeing a recurring cycle of capture of wealth rather than an inevitable progress towards what Marx saw as the control of capital by the masses. That makes my analysis very different from his. But actually, to be candid, I think my analysis is much more pertinent, more in accord with the facts, and one which is of greater import as a result.

The politicians who do not need the warning signs are part of the problem, not part of the solution. New Labour really has got to notice. It is an incredible situation that so far only Vince Cable and the left of the Labour Party have.