It seems the Barclays bank public relations nightmare keeps getting thicker. After new boss, Bob Diamond, has made it clear to parliamentary committees that the time for the financial sectors’ “remorse and apologies are over,” a UK activists group, called UK Uncut, have forced the CEO to admit that the bank paid only £113 million in corporation tax for 2009, whilst making £11.6 billion in profits, according to The Guardian. That’s not egg on your face, Bob, that’s an omelette.
This disclosure will culminate in a group of protests around the UK at Barclays branches. The news came in a letter from Diamond to Labour MP Chuka Umunna, after the latter lobbied the bank boss to find out the amount of tax paid. This amount has shocked the press, public and politicians as the current corporation tax rate is 28%, and the above figure is less than 1% on profits earned from that year. Mr. Diamond explained in a statement, “The corporate tax affairs of an organisation with the global footprint of Barclays are complex and not reducible to simplistic comparisons. Any link between Barclays Group profits and the amount of tax paid to the UK government is inappropriate – there is no direct correlation between the two.” But, what the “global footprint” really entails is a collection of 200 subsidiary companies with 180 in the Cayman Islands alone, which Diamond insists “the majority of these are subject to tax in the UK.” Obviously many aren’t, though.
City Minister, Lord Myners, said, “The combination of tax avoidance strategies with subsidiary companies together with losses brought forward means that banks will be not be making a meaningful contribution to corporate tax for some years.” These disclosures look set to continue as both banks and politicians claim to be working towards more transparency. Which will undoubtedly mean the protests will continue also.