Two aspects of the decision to ban publication of the leaked Barclays tax-avoidance documents look decidedly odd
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Editorial
guardian.co.uk, Thursday 19 March 2009 17.45 GMT
Article history
Mr Justice Blake has firmly bolted the stable door in the case of the leaked Barclays tax-avoidance documents. Whether the horse was still inside the stable or cantering around the fields is a matter on which it is apparently forbidden to speculate.
There are two aspects of the decision to ban publication of these documents which look decidedly odd. The first is to do with freedom of expression and the law of confidence. In the late 1980s the British government made itself look ridiculous by trying to prevent British publication of the memoirs of an ageing MI5 agent, Peter Wright, even though the book and its contents had been disseminated on a world-wide scale. It was left to the House of Lords to rule that you could not put a melting ice cube back into the freezer. At least in that case it was possible to refer to the fact that there were Australian and American editions of Spycatcher. Today's injunction is much narrower.
The Guardian must not talk about that which many of its readers will have worked out for themselves. It is not, in other words, possible to have a public debate about the extent to which the Barclays documents are still confidential and thus deserving further protection by the law. There is something almost comic about a high court sitting in camera in the Strand ordering a blanket of confidentiality over something which, even as they secretly ruminate about secrecy, is being discussed around the world.
The second matter is whether or not the widest possible public scrutiny of the tax avoidance schemes of a major bank should – now, of all times – be prevented by court order. There is little dispute that the Structured Capital Markets division of Barclays has for years been engaged in engineering numerous inventive schemes to avoid very large sums of tax. Barclays is known to be one of the most aggressive exploiters of tax loopholes in the UK. The Royal Bank of Scotland – now substantially in government ownership – has decided to wind up its equivalent division.
An RBS source put it succinctly to this paper: "The idea that we could take support from the Treasury with one hand and somehow pick their pocket with the other would be wrong on every level." Barclays is intent on ploughing a more independent furrow, though it is in discussion with the government to secure insurance that would see UK taxpayers protect the bank against losses on up to £80bn of assets. But its current relative independence from government does not make its extensive exotic use of tax loopholes any more defensible.
While the judge agreed the Guardian's tax coverage was important he seemed to think there was no merit in allowing a wider public to read the detailed documents in which Barclays employees discussed how they planned to structure these schemes and how they would argue their legitimacy with the taxman. It is better, in his view, that banks, tax advisers and lawyers should be allowed to have private conversations with Her Majesty's Revenue & Customs without any kind of wider scrutiny. This ignores widespread concerns – articulated by the Barclays whistleblower among others – that it is precisely the private nature of these conversations that has allowed banks and corporations to get away with such rampant tax avoidance over so many years.
This is not an arcane dispute between a newspaper and a bank over marginal tax-dodging at the fringes. If Barclays were to be forced to follow RBS into abandoning its tax avoidance adventures, many hundreds of millions would be removed from its annual profits and leave the bank. Shareholders and government need to know what is going on. And the public should be allowed a glimpse into the cosy world of secret negotiations between bankers, lawyers and tax inspectors over who can get away with what. It is a worrying day when a judge thinks he knows better.
For legal reasons, comments on this article are being pre-moderated
Comments (34)
Editorial
guardian.co.uk, Thursday 19 March 2009 17.45 GMT
Article history
Mr Justice Blake has firmly bolted the stable door in the case of the leaked Barclays tax-avoidance documents. Whether the horse was still inside the stable or cantering around the fields is a matter on which it is apparently forbidden to speculate.
There are two aspects of the decision to ban publication of these documents which look decidedly odd. The first is to do with freedom of expression and the law of confidence. In the late 1980s the British government made itself look ridiculous by trying to prevent British publication of the memoirs of an ageing MI5 agent, Peter Wright, even though the book and its contents had been disseminated on a world-wide scale. It was left to the House of Lords to rule that you could not put a melting ice cube back into the freezer. At least in that case it was possible to refer to the fact that there were Australian and American editions of Spycatcher. Today's injunction is much narrower.
The Guardian must not talk about that which many of its readers will have worked out for themselves. It is not, in other words, possible to have a public debate about the extent to which the Barclays documents are still confidential and thus deserving further protection by the law. There is something almost comic about a high court sitting in camera in the Strand ordering a blanket of confidentiality over something which, even as they secretly ruminate about secrecy, is being discussed around the world.
The second matter is whether or not the widest possible public scrutiny of the tax avoidance schemes of a major bank should – now, of all times – be prevented by court order. There is little dispute that the Structured Capital Markets division of Barclays has for years been engaged in engineering numerous inventive schemes to avoid very large sums of tax. Barclays is known to be one of the most aggressive exploiters of tax loopholes in the UK. The Royal Bank of Scotland – now substantially in government ownership – has decided to wind up its equivalent division.
An RBS source put it succinctly to this paper: "The idea that we could take support from the Treasury with one hand and somehow pick their pocket with the other would be wrong on every level." Barclays is intent on ploughing a more independent furrow, though it is in discussion with the government to secure insurance that would see UK taxpayers protect the bank against losses on up to £80bn of assets. But its current relative independence from government does not make its extensive exotic use of tax loopholes any more defensible.
While the judge agreed the Guardian's tax coverage was important he seemed to think there was no merit in allowing a wider public to read the detailed documents in which Barclays employees discussed how they planned to structure these schemes and how they would argue their legitimacy with the taxman. It is better, in his view, that banks, tax advisers and lawyers should be allowed to have private conversations with Her Majesty's Revenue & Customs without any kind of wider scrutiny. This ignores widespread concerns – articulated by the Barclays whistleblower among others – that it is precisely the private nature of these conversations that has allowed banks and corporations to get away with such rampant tax avoidance over so many years.
This is not an arcane dispute between a newspaper and a bank over marginal tax-dodging at the fringes. If Barclays were to be forced to follow RBS into abandoning its tax avoidance adventures, many hundreds of millions would be removed from its annual profits and leave the bank. Shareholders and government need to know what is going on. And the public should be allowed a glimpse into the cosy world of secret negotiations between bankers, lawyers and tax inspectors over who can get away with what. It is a worrying day when a judge thinks he knows better.
For legal reasons, comments on this article are being pre-moderated
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