Things that definitely are George Osborne’s job

The Guardian have a story up today headlined “George Osborne says HSBC tax evasion prosecutions not his job”. This comes in the face of ongoing revelations about HSBC’s Swiss operation and anger over reports that to date only 1 out of 1,100 individuals for which there is evidence of tax evasion have been prosecuted. George is technically quite right. Evidence of criminal activity should be gathered by bodies like HMRC and the Financial Conduct Authority, and decisions about whether to pursue prosecutions taken together with the Crown Prosecution Service. This does not let Mr Osborne of the hook however. There are a number of things that definitely are his job (or the job of others in government) that he should be doing in relation to this issue. Here are a couple:

1. Make a clear statement and back it up by announcing that the tax authorities will have all the resources they need to pursue cases (however complex) if they are in the public interest. This is not happening however. I’ve seen it quoted on several places that while the DWP employs over 3,000 people to investigate benefit fraud estimated at £1.2bn, HMRC employs only 300 people to investigating tax abuse totaling several orders higher than benefit fraud (if someone can find an official source for these stats, please let me know). This suggests the Government’s priorities may not be quite focused in the right direction.

2. The Government are responsible for appointing financial regulators, and the message sent out to banks and others flows from that. If the Government appoints regulators who want to stamp out abuses (and who have the resources to do so), then it would restore confidence in the system. This also does not seem to be the case. The CEO of City regulator the Financial Conduct Authority recently told a committee of MPs that he was unaware of any specific claims about misconduct at HSBC until the last few weeks. Isn’t it his job to know, particularly when by all accounts it was pretty common knowledge what they were up to? He also said:

“He said the FCA had not been handed details of the latest HSBC scandal by HM Revenue and Customs (HMRC).

‘I am not aware of a direct channel of information on this particular case,’ said Mr Wheatley, adding that he did not know whether HMRC had any obligation to do so.”

To which ex bank regulator Bill Black incredulously wrote:

“To review the bidding, Wheatley says he doesn’t know anything beyond what he read in the newspapers, has no “channel” (as in English “channel”?), to the UK tax authorities even though any banking regulator has to work closely with the tax authorities, and doesn’t know whether his agency and the UK tax authorities even have a system of informing each other of vital information about bank frauds.”

Quite. So come on George. While prosecuting tax evasion may not be your job, appointing experts up to the job, who are properly resourced with the teeth to impose harsh penalties for wrongdoing most definitely is!

William K Black on HSBC, “the world’s largest criminal enterprise”

William K Black is an Associate Professor of Law and Economics, and a former bank regulator. In a post on the New Economic Perspectives blog, he discusses the latest HSBC scandal, and the unwillingness of today’s regulators to do their job:

HSBC’s most recent scandal is the perfect holiday gift. Whatever genre of entertainment one favors – from blood diamonds to drug cartels to rollicking royals to sport stars HSBC was happy to aid the wealthiest stars of your genre to illegally evade their taxes. Taxes were once termed the price we paid for civilization, but they now represent the price the wealthy brag to each other about refusing to pay as they pillage civilization. Because the City of London “won” the “regulatory race to the bottom” it is the worst “vector” for the epidemic of sleaze led by our most elite bankers.

Read the rest here.

Last 7 Days Reading List 04/01/14

Much of the news this week was about either the weather or the tidal wave of new migrants from Romania and Bulgaria that would apparently been sweeping in come January 1st. On both counts the media seems to have been a bit disappointed. The weather wasn’t quite as bad as forecast, and despite camping out at airports and bus terminals, journalists – and bizarrely, Keith Vaz MP – did not observe half of Eastern Europe queuing up at the border with their applications for benefits already filled in. All a bit disappointing.

Not much caught my eye this week, but here’s a small selection of non weather/immigration stories.

Outrageous bankster news first, and Matt Taibbi of Rolling Stone reports on the fine given to HSBC for laundering drug money for Mexican cartels. No one from HSBC was prosecuted:

Outrageous HSBC Settlement Proves the Drug War is a Joke

On now to David Cameron’s flagship internet porn filters, with the news that guess what? They don’t work, blocking everything from the NSPCC to the British Library to – hilariously – Claire Perry’s website. Remember, she’s the MP who campaigned loudly for the introduction of filters even though it was clear she had no idea what she was talking about:

Cameron’s internet filter a disaster

The economy now and a nice article by William Keegan in the Observer on welfare cuts and Coalition policy:

Big society? Cutting welfare to ‘aid recovery’ is just a big lie

Finally, some housing news, and a blog by Jules Birch for Inside Housing on developments in the sector over the Christmas period. A good read:

While you were away