Royal Bank of Scotland — House of Commons, 2015-11-05
Topic: Domestic Commerce
Helen Catherine Goodman (Labour, Centre-left): I am very pleased to follow the hon. Member for Clacton (Mr Carswell), who was admirably brisk The one respect in which this share sale is a disaster is its timing and price, which the Chancellor has chosen; according to the Chancellor’s own advisers, that means a loss to taxpayers of £7 billion. The taxpayer has been given no justification for that, and the National Audit Office should look into it, so I have written today to the Comptroller and Auditor General Before the sale, the Governor of the Bank of England wrote a two-page letter to the Chancellor, which said that selling the shares "would promote financial stability, a more competitive banking sector and the interests of the wider economy." The Chancellor has relied heavily on that advice. I asked the Bank of England Governor about it on 20 October at the Treasury Committee. He said twice that "the timing and valuation for the taxpayer…are entirely decisions for the Government." He also told us that his letter was based on analysis by the Bank of England, but he refused point blank to disclose the analysis. Will the Minister tell us today whether that analysis was passed to the Treasury I find that failure to disclose totally unacceptable; I hope that the Comptroller and Auditor General will be able to recover the information when he assesses the value for money of the share sale. The Rothschild document, which is one of the thinnest and weakest papers I have ever seen, at no point quantifies the benefits to the public of the sale. There might be some benefits to financial stability in the banking sector that are worth something, but how many? We should be told. I put it to the House that Ministers have been lobbied by their banker friends and funders in the City and that is why they are selling off the shares cheap, rewarding their cronies and cheating the taxpayer The Government have said repeatedly that they want to improve behaviour at the banks. In statements to the House in February, Ministers repeatedly told us that tax evasion promoted by the banks via Swiss accounts was a thing of the past, but RBS has 404 company subsidiaries located in tax havens. Evidence uncovered by The Guardian, but not yet published, from Coutts, a subsidiary of RBS, shows that that practice has continued throughout all the five years of Government ownership Alerted by a whistleblower, The Guardian met a senior manager at Coutts, which, incidentally, is chaired by a Conservative peer, Lord Douglas-Home. The manager offered to "park" undeclared money and help move a potential customer to Switzerland to avoid UK tax. During the meeting, the executive was recorded saying that he would accept a deposit worth 8 million Swiss francs on which tax had potentially been evaded, that he would accept funds without ensuring that the money was not the proceeds of a crime, that he would help a client pay "as little tax as legal" and that he would help a client move to Switzerland to avoid tax. The executive is a British national who ran a private banking team at Coutts International’s head office in Zurich. He was recorded saying: "Basically, tax authorities are your enemy" Furthermore, these facilities and opportunities were advertised in the brochure by Coutts and, until The Guardian got in touch with Coutts, were on the Coutts website. Although under Swiss law tax evasion is not a crime and there is no obligation to report it to the authorities, in England it is illegal for a banker to deal with money that they know or suspect to be the proceeds of a crime When the head of UK Financial Investment came to the Treasury Committee, I asked him about this issue and whether he had problems with Coutts. He said, "Yes" and went on to say that "controversial" practices were "one of the reasons" for selling Coutts International. He also said that he had kept Treasury Ministers "regularly informed of every conduct item we find out about" It would appear that, once Treasury Ministers were told, the Government, rather than tackling these malpractices and stopping them from taking place at Coutts, decided to wash their hands of the matter by selling the shares Taxpayers will want to know when Ministers were told about this tax evasion; what they did; what estimate was made of the tax losses; whether Treasury Ministers or officials alerted HMRC to the practice so that it could recoup the lost tax revenues; why the Minister told the House that the era of mass-market avoidance schemes was over; and whether we can have a systematic review of the 404 RBS subsidiaries located in tax havens. I submit that until we have answers to those questions, there should be no further sale of RBS shares.