Wednesday, 29 October 2008
Why Barclays Don't Want Gordon Brown's Bailout
As ‘negotiations’ continue between the authorities and a number of banks – notably Lloyds-TSB, RBS and HBOS - the terms for the great Brown Bailout have been seeping out. Bonus policy, foreclosures, lending to SMEs, dividends … Brown is in seventh heaven as he dreams of calling the shots in all these areas, and doubtless his shopping-list will lengthen if he feels he’s making headway.
HSBC is only too happy to be above the fray. But why was the smaller and apparently more precarious Barclays so keen to avoid taking Brown’s Bounty ?
My spies in the City tell me that there’s another price to pay for the Darling Dole: banks must forswear promoting and funding ‘tax schemes’. Long the bane of the HMRC, banks have had whole divisions beavering away, on behalf of themselves and numerous clients, corporate and private alike, at wheezes to deprive the government of tax revenues .
And none more so than Barclays, whose clever (and entirely legal) tax schemes, particularly on the VAT front, are a significant business line. Some of their wheezes – that trick of avoiding VAT on new computer systems, eh, lads ? – have sent the HMRC into apoplexy.
So – it’s Qatari capital and freedom, for independently-minded Barclays; and Brown can keep his bailout. How long before Lloyds decide it’s not worth the candle ?
Posted by Nick Drew