Thursday, 28 October 2010

Barclays, Bob Diamond and a move to the United States

In City AM this morning I read that Barclays is seriously considering moving its headquarters from London to America. Now on one hand I’m quite enjoying this, on the other I’m worried. I would like nothing more than to see a British bank stick two fingers up to the British government and give them a real lesson in the lack of power of the state. Especially this will be one in the eye for "Casino Banking" whiner Vince Cable, the man who predicted all 19 of the last 3 recessions and George Osborne – a man promoted beyond his limited means.

Just in case you need reminding, of all the banks that failed it was the retail banking systems that failed, not the Investment banking arm. They lent vast amounts of geared money to the general public for overpriced houses on fantasy "Self certified" earnings multiples. So with Barclays and HSBC leaving on a Jet Plane, the UK will be left with the bailout banks with no Investment banking arms whose only contribution to the UK finance industry is the fact they were based in ZanuLabour constituencies. Confidence in the City will collapse, and the jobs will leave in droves.

The only thing a Glass-Steagull act that is being suggested by the Bank Of England will do is force Barclays to walk out of the UK. They are already planning on doing this. The mistake they are making is a planned move to the US which is even worse for business.

The problem in getting a Yank to run your business is the fact that sooner or later he will want to move it lock stock and barrel back to his home. Yanks and business are like Muslim chaps marrying a non-muslim girl, he may say he loves and respects you, but you’ll still be reading a Koran and wearing a Burqa as quick as you can say “But My Mohammed’s Different”. Ditto the Americans, they honestly think that the US is the best place in the entire world to do business, and any reason not to have your business based in the US is some form of mental illness.

In reality Bob Diamond is probably missing his Rounders team and squeezy Hamburger Cheese. But Bobby, bearing in mind I looked after your account and know how much was in it 4 years ago, do you really miss A1 Sauce that much that you want to pay US taxes? Oh and whilst we’re at it, corporate taxes aren’t any different - but a damn site harder to avoid in the US. Barclays should take note, because if Private Eye is to be believed, you’ve been very good at making sure that you only pay UK taxes on the minimum amount possible, you pay the rest in low tax jurisdictions for your entire overseas operation.

Well that won’t be an option for you, the US recently announced that US domiciled companies will be paying US taxes on their entire international operation, not only the US domestic part. UK taxes may be higher, but are they higher than the Chanel Islands, Liechtenstein and god knows where else you pay your taxes on international holdings? Also bear in mind the IRS is a different boiling vessel of poissons entirely to HMRC. They will hound you until the end of time, and have the reach to do so wherever you are in the world. Once you let those fuckers have access to your documentation you will never ever get rid of them.

In case the taxes didn’t put you off, you have to pay health care for all your workers on top. Their legal system is worse because the courts over there hand out long distance phone number damages, and their politicians are just as likely to bash your industry if they think a vote is in it. Indeed that’s the reason Barclays pulled their Retail Banking license in the US back in 1990, I know because I was living under the same roof as the guy at Barclays who was responsible for closing the US Operation at the time. And that was at the fag end of Reaganomics, not after the Patriot Act, a financial meltdown and 2 years into the Obama administration.

Jeez, Barclays- did you not notice BP? Are Barclays that spectacularly unaware of the world around them? Barclays may not produce gooey guillemots, but Wall Street isn’t that popular in the US either. You have a President who desperately needs to shore up his political base and the MoveOn crowd would like Obama to wallop banks like Keith Richmond on PCP banging the Rank Gong. The Republicans won’t give a shit because the Last Republican senator of New York State probably got a Zeppelin hanger named in his honour, and the bankers aren’t popular with the average Republican voter either because they’re over privileged east coast Liberal Yallies who sponsor the Opera and Ballet, rather than Team “No Fear” Racing and the Indi 500.

Do yourself a fat favour Barclays. Take a long hard look at the horrible legislation the UK is introducing, get on the plane to Newark, enjoy that Kansas City Strip at Gallagher’s near the Rockefeller centre, then move to Singapore or Zurich. Just please come back once the idiots in HM government decide you were useful after all.

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