Why Barclays can’t take the moral high ground

It’s a myth that the bank didn’t benefit from state support.

The Barclays chief executive, Bob Diamond, attempted to seize the moral high ground today when he told the Treasury select committe that those banks that get into trouble should be allowed to fail. The man once described by Peter Mandelson as the "unacceptable face of banking" told MPs: "It is not acceptable for taxpayers to bail out banks."

Barclays, of course, did not receive any direct state support during the financial crisis, a fact that Diamond has often cited in his favour. But, as my colleague Mehdi has previously pointed out, although Barclays did not receive a pound of taxpayers' money, it benefited immensely from the emergency measures introduced by the government to prevent a sector-wide collapse.

As John Varley, the outgoing chief executive at Barclays, conceded in 2009:

There are two ways I would say the system as a whole benefited generically.

One was in the injection of liquidity undertaken by the Bank of England and a new structure put in place in March 2008.

And the other was the making available of guarantees from government for funding undertaken by banks. It is important to recognise that in each case the banks were encouraged to use these new structures that were put in place and we did.

It is also important to recognise that we were required and we did pay a price for these things, but I'm not trivialising the importance of the intervention. It was important.

And remember, too, as the Labour MP Chuka Umunna pointed out during the hearing, that Barclays narrowly missed out on buying the Dutch bank ABN Amro – the deal that brought Royal Bank of Scotland to its knees. Had history turned out differently, it would have been Barclays, not RBS, that required a £20bn bailout from the government.

As Umunna said to Diamond today, "You could have been the Fred Goodwin of the financial crisis . . . do you see why people don't think you are a suitable person to be running one of Britain's biggest banks?"

George Eaton is political editor of the New Statesman.

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Nobody's bargaining chips: How EU citizens are fighting back against Theresa May

Immigration could spike after Brexit, the Home Affairs select committee warned. 

In early July, EU citizens living in Scotland received some post from the First Minister, Nicola Sturgeon. The letters stated: “The immediate status of EU nationals living in Scotland has not changed and you retain all the same rights to live and to work here. I believe those rights for the longer term should be guaranteed immediately.”

The letters were appreciated. One Polish woman living on a remote Scottish island posted on social media: “Scottish Government got me all emotional yesterday.”

In reality, though, Sturgeon does not have the power to let EU citizens stay. That rests with the UK Government. The new prime minister, Theresa May, stood out during the Tory leadership contest for her refusal to guarantee the rights of EU citizens. Instead, she told Robert Peston: “As part of the [Brexit] negotiation we will need to look at this question of people who are here in the UK from the EU.”

As Home secretary in an EU member state, May took a hard line on immigration.  As PM in Brexit Britain, she has more powers than ever. 

In theory, this kind of posturing could work. A steely May can use the spectre of mass deportations to force a hostile Spain and France to guarantee the rights of British expat retirees. Perhaps she can also batter in the now-locked door to the single market. 

But the attempt to use EU citizens as bargaining chips may backfire. The Home Affairs select committee warned that continued policy vagueness could lead to a surge in immigration – the last thing May wants. EU citizens, after all, are aware of how British immigration policy works and understand that it's easier to turn someone back at the border than deport them when they've set up roots.

The report noted: “Past experience has shown that previous attempts to tighten immigration rules have led to a spike in immigration prior to the rules coming into force.”

It recommended that if the Government wants to avoid a surge in applications, it must choose an effective cut-off date for the old rules, whether that is 23 June, the date Article 50 is triggered, or the date the UK finally leaves the EU.

Meanwhile, EU citizens, many of whom have spent decades in the UK, are pursuing tactics of their own. UK immigration forms are busy with chatter of UK-based EU citizens urging one another to "get your DCPR" - document certifying permanent residence - and other paperwork to protect their status. More than 1,000 have joined a Facebook group to discuss the impact of the referendum, with hot topics including dual nationality and petitions for a faster naturalisation process. British citizens with foreign spouses are trying to make the most of the "Surinder Singh" loophole, which allows foreign spouses to bypass usual immigration procedures if their British partner is based in another EU country. 

Jakub, a classical musician originally from Poland, is already thinking of how he can stay in the UK, where there are job opportunities for musicians. 

But he worries that although he has spent half a decade in the UK, a brief spell two years ago back in Poland may jeopardise his situation.“I feel a new fear,” he said. “I am not sure what will happen next.”