THe Liberal Democrats Treasury spokesman Lord Oakeshott has delivered a broadside against prime minister Brown and the secretive activities of Barclays Bank.
He used parliamentary privilege on Thursday to say what newspapers have been banned from saying by an injunction won by Barclays.
The press is, however, allowed to report his speech, which News Line is pleased to do.
In a debate in the House of Lords on tax evasion, Oakeshott said: ‘Tax havens are sunny places for shady people.
‘No one sends their money to Monaco or the Cayman Islands because they are centres of excellence for fund management.
‘I was going to add the British Virgin Islands, but in deference to the noble Baroness, Lady Hooper, I shall leave them out.
‘From Antigua to Belize, you use a tax haven because you have something to hide, be it from the taxman, the authorities where you live or even your family.
‘ “Low tax and low disclosure” is the polite way in which the apologists for tax havens put it, but if you are Mobutu or Mugabe, Imelda Marcos or a Colombian with a big briefcase, a brass-plate company in an anonymous office block means that your millions leave no trace and tell no tales.
‘Gordon Brown is strutting the world’s stage as Mr Clean-up, the man to make tax havens and tax dodgers quake in their boots.
‘Oh yeah? – Why then did the Treasury say only yesterday that the asset protection scheme for banks to dump their bad debts on the taxpayer and the code of practice covering tax avoidance for the banking sector due next month are “separate issues”?
‘That is the most unjoined-up government imaginable.
‘Why has the budget of HMRC’s hard-pressed tax avoidance team, led by Mr Tailby, been cut by five per cent from 6th April?
‘Barclays will be laughing all the way to the Cayman Islands. Our taxmen are like fat policemen running after a speeding Ferrari; they need all the help that they can get.
‘We all rejoice at the sinner who repenteth, but this is the same Gordon Brown who as Chancellor cuddled up to the bankers so hard that it hurt and who showed no interest in taxing or regulating hedge funds registered in the Cayman Islands and run by non-doms in Mayfair, or the private equity millionaires with their absurdly generous special tax breaks. . . .
‘Why will the Prime Minister and the Treasury not use their power over the banks to stamp out tax abuse right under their nose in London?
‘You do not have to take a Caribbean cruise; all you have to do is get on a boat down the Thames to Canary Wharf. . .
‘Nearly nationalised RBS claims to have closed down its tax avoidance operations at head office but still actively promotes its operations in offshore tax havens and its private bank in Switzerland.
‘Barclays has developed tax avoidance into a massive profit centre in its own right, with vast sums of the bank’s money touring tax havens on what in one case amounts almost to a three-day super saver return ticket from Canary Wharf, saving Barclays, not the taxpayer, mountains of tax.
‘Documents leaked to the Liberal Democrats, which appear to detail systematic tax avoidance on a grand scale by Barclays, were injuncted last week.
‘The Sunday Times and the Guardian had already made them front-page news and these documents are widely available on the internet from sites such as Twitter, wikileaks.org, docstoc.com and gabbr.com.
‘Yet the Guardian had to remove them from its website and cannot tell its readers where to find them.
‘These documents describe deals worth billions of pounds set up by the bank in order to make money out of depriving the UK and foreign exchequers of revenue.
‘Barclays would not last for one minute without the British taxpayer standing behind it, yet it is holding out one hand for taxpayers’ money while it picks taxpayers’ pockets with tax avoidance activities on the other.
‘Unlike Barclays, HMRC cannot match the best tax and legal brains that money can buy and unpick these deals.
‘It is a sad day for democracy if a judge sitting in secret can stifle this essential public debate.
‘Louis Blom-Cooper and three distinguished colleagues wrote to the Guardian: “Barclays may properly be regarded as an operator in the private sector, but its corporate status, carrying with it all the advantages that incorporation confers on the bank, and performing a function so vital to the country’s economy, was such that Mr Justice Blake should have concluded that Barclays Bank was akin to that of a public authority and susceptible to the precepts of public sector activity. Perhaps the Court of Appeal will exhibit rather more boldness in supporting the Guardian’s valuable crusade against tax avoidance”.
‘Vince Cable has done his duty and sent all these documents to HMRC and the Financial Services Authority.
‘I believe that it is mine today to tell, as I just have, Parliament about Barclays’ tax avoidance machine with its aggressive exploitation of tax havens and to tell the public, in their interest, where they can get chapter and verse and judge for themselves.
‘Barclays has a whole department, the structured capital markets division, inside Barclays Capital, dedicated to dodging the taxman, and has been reported as paying Mr Roger Jenkins, who runs it, £40 million a year.
‘Vince Cable and I are now being told of more, even murkier, deals. About a third of a billion pounds has been added to Barclays Bank’s bottom line by the following six “projects”, from what we can see.
‘Barclays’ Project Knight, set up in 2007, with capital of more than $16 billion, involved making loans to American banks which now need federal funding: Wachovia, WaMu, Bank of America and BB&T.
‘This allowed Barclays to benefit from “double-dip” tax credits, as they are called, and made the bank £100 million or more.
‘Project Faber, also in 2007, involved capital of £1.5 billion and made Barclays £29 million in tax profits.
‘That involved using tax havens in the Isle of Man and the Caymans for subsidiaries to channel loans to Luxembourg banks.
‘Project Brontos in 2007 was a scheme between Barclays and Italian banks to save Italian tax; it made Barclays £15 million in profits at a conservative estimate.
‘Project Valiha, with capital of nearly £400 million, involved an elaborate trade with interest rate swaps that could be transferred to an American counterparty, alleged to be AIG, which gained Barclays £69 million in tax-free profits.
‘Project Brazil, set up in 2005-06, made Barclays £30 million in tax profits from currency trades and, in Project Berry, a Barclays subsidiary buys index-linked gilts and lends them back to Barclays so that it can collect tax reliefs worth £134 million.
‘How many more of those morbid mutants are on the books of Barclays’ structured capital markets group?
‘Before the Treasury takes on any of the toxic assets of Barclays, we must know how much tax it has avoided, how and with whom, and what has passed through or is still hidden in tax havens. . . .
‘Our Prime Minister is a moral man, but he must now turn his words into deeds.’