British Banks and tax havens

Posted on

From Bloomberg:

Britain's main banks should provide more detail of their activities in offshore financial centers such as the Cayman Islands and Jersey, a union group said.

Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc together have more than 1,000 subsidiaries in tax havens, according to a study by the Trades Union Congress, a 7 million-member umbrella organization.

The call for greater transparency highlights the increasing scrutiny banks are facing after Prime Minister Gordon Brown organized a bailout of the financial system that has added an estimated 1 trillion pounds ($1.4 trillion) to government liabilities. The U.K. directly owns stakes in Lloyds and RBS and has helped the other lenders through Bank of England facilities.

"There is no suggestion that anyone has broken any tax laws," TUC General Secretary Brendan Barber said in a statement. "But now that banks have public stakes or trade with the knowledge that the taxpayer stands ready to bail them out, the taxpayer has a right to know the full extent of bank activities and liabilities across the world."

More than half of British voters oppose Brown's decision to buy stakes in major banks, according to ICM survey for yesterday's Guardian newspaper.

"Voters are increasingly angry at the banks," Barber said. "The government should set up a tough public inquiry into why our financial system came so close to collapse and should investigate the full extent of their tax avoidance."

Disclosure: I did the research for the TUC