HSBC, the EU and Global Sustainability

[cjp]

HSBC bank whose UK branches were once the Midland Bank is talking of leaving the UK so as to make more profit rather than pay the taxes it suffers.
The Departure of the Hong Kong and Shanghai Banking Corporation would be another example of the business not being prepared to pay their full share of the taxes needed to run this country (and to pay politicians' wages).

An example of uncivilised behaviour.

Civilisation needs taxes to help the needy.


Shades of Vodaphone. (Remember their tax deal they made with HMRC chief David Hartnet whereby they were let off paying even less than they had allowed for in their published accounts? Oh in case you don't recall when this former head of HRMC left under a cloud one of the jobs he picked up was with HSBC. Small world isn't it)
And HSBC also benefited with a delay perhaps involving Mr Hartnet when HMRC looked into HSBC's Swiss operation designed to help fat cats avoid UK taxation.
A theme here isn't there .... HSBC doing much to avoid payments of UK taxes.
HSBC big - You much smaller so don't you dare avoid paying your taxes .

And I suspect the timing is political - don't you?

Go away with your head office which does all it can to avoid paying taxes so you and I pay more to support our NHS.

I have no accounts with HSBC and intend to keep it that way

 

[RichmondCommu]

I'm sorry to have to correct you but HSBC leaving London would detrimental effect on our economy. I don't think you could name one serious organisation who doesn't employ measures to reduce the amount of tax that it pays. It would be doing its shareholders a dis service to do anything other than that.

You don't seem to care or understand that HSBC employs thousands of people in its UK headquarters, many of them earning large sums of money and paying large amounts of income tax. Take away those jobs and the economy will suffer.

Its worth noting however that HSBC will struggle to find another city to relocate to with the possible exception of Hong Kong. HSBC does the majority of its business in Asia but I suspect the bank would be subject to more regulation in China than it is in London. Yes the banking sector needed more regulation but lets not kill the goose that laid the golden egg.

 

[TheKnightWho]

It has been made explicit that HSBC leaving would happen in the event of the UK leaving the EU. It's the first of many such threats we will be hearing from businesses, as those who actually have a vested interest in this sort of thing start taking notice of the very real possibility that we might leave.

It's the first example of why our economy will tank if we do. Frankly, the very fact that Farage bangs on about us paying £8bn a year to the EU shows he's either wilfully misleading people or is totally ignorant of economics. Any economist worth their salt knows that government expenditure is but one factor, and that in this particular case the business-related benefits to the economy outnumber it at least 20 to 1.

 

[DownSouth]

It has been made explicit that HSBC leaving would happen in the event of the UK leaving the EU. It's the first of many such threats we will be hearing from businesses, as those who actually have a vested interest in this sort of thing start taking notice of the very real possibility that we might leave.

It's the first example of why our economy will tank if we do. Frankly, the very fact that Farage bangs on about us paying £8bn a year to the EU shows he's either wilfully misleading people or is totally ignorant of economics. Any economist worth their salt knows that government expenditure is but one factor, and that in this particular case the business-related benefits to the economy outnumber it at least 20 to 1.

It's a measure of how dumb the UK leaving the EU would be that even just the continued talking about it is affecting confidence in the UK as a country open for business.

 

[Aictos]

With regards to the EU, isn't it time we rejoined the European Free Trade Association
which would keep the trade with the EU but also satisfy the number of EU sceptics that appear to be growing?

 

[yorksrob]

On a related matter, I note that yet another British technology company has been flogged off to foreign rivals. It seems to me that the City of London is a hindrance to British
Industry rather than a help.

During the financial collapse, we were promised an industrial development bank which would allow industry to find funding without recourse to our failed and rapacious private financial system. All seems to have gone very quiet in recent years.

 

[SS4]

With regards to the EU, isn't it time we rejoined the European Free Trade Association
which would keep the trade with the EU but also satisfy the number of EU sceptics that appear to be growing?

It's wishful thinking to suggest the EU sceptics would be happy with anything less than leaving the EU (but keeping all of our trade agreements and influence of course for no better reason than the EU need us more than we need them so they'll present their collective anus to Whitehall in the hope we'll sodomize them for a bit of cash :roll

I'd be interested in seeing the government call HSBC's bluff. Do they want to move? Are they trying to influence the election? When one of the major players in a major industry can essentially blackmail the government into more concessions it's time to diversify the economy.

I read somewhere that banking destroys money overall. Suppose you have a chippy: you're adding value by changing potatoes to chips. A car production plant is adding value from metal into cars. A bank lends money (which adds it into the economy) but with interest so more money leaves the economy.

 

[DynamicSpirit]

I read somewhere that banking destroys money overall. Suppose you have a chippy: you're adding value by changing potatoes to chips. A car production plant is adding value from metal into cars. A bank lends money (which adds it into the economy) but with interest so more money leaves the economy.

That doesn't sound quite right to me. Lending the money will in effect add money to the economy (the extra money remains until the loan is repaid), but the interest payments won't normally remove money from the economy. By themselves, they are simply a transfer of money from one organization to another. The only exception is that if the bank was foreign-owned, so the interest payments were being paid abroad, then that would be a loss to the UK economy.

 

[richa2002]

It has been made explicit that HSBC leaving would happen in the event of the UK leaving the EU. It's the first of many such threats we will be hearing from businesses, as those who actually have a vested interest in this sort of thing start taking notice of the very real possibility that we might leave.

It's the first example of why our economy will tank if we do. Frankly, the very fact that Farage bangs on about us paying £8bn a year to the EU shows he's either wilfully misleading people or is totally ignorant of economics. Any economist worth their salt knows that government expenditure is but one factor, and that in this particular case the business-related benefits to the economy outnumber it at least 20 to 1.

For me it's a question of democracy. No amount of questionable financial benefit makes up for being ruled (largely) by those that we as a country haven't voted for. It depends if you still see the United Kingdom as a separate nation state or whether we're just one big country called Europe.

Perhaps we'd return to a more balanced economy without emission regulations closing heavy industry and the common fisheries policy destroying fishing communities.

 

[TheKnightWho]

On a related matter, I note that yet another British technology company has been flogged off to foreign rivals. It seems to me that the City of London is a hindrance to British
Industry rather than a help.

During the financial collapse, we were promised an industrial development bank which would allow industry to find funding without recourse to our failed and rapacious private financial system. All seems to have gone very quiet in recent years.

Who owns a company is somewhat irrelevant when the vast majority of the tax produced by said company is collected in Britain, and the vast majority of the valuable economic output is equally in this country.
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For me it's a question of democracy. No amount of questionable financial benefit makes up for being ruled (largely) by those that we as a country haven't voted for. It depends if you still see the United Kingdom as a separate nation state or whether we're just one big country called Europe.

Perhaps we'd return to a more balanced economy without emission regulations closing heavy industry and the common fisheries policy destroying fishing communities.

Frankly, I (and most people!) would not be happy with this country nosediving in the name of some abstract notion of democracy.

There is a reason we don't let the average person deal with every facet of government and instead vote for representatives. I literally cannot think of a single EU law that has been a problem for the UK, as those we have had issues with we've either got exceptions for or have changed to be in our favour. Brussels is not a dictatorship: the UK is part of it and makes large contributions to the areas that affect the UK. Emission regulations have shut exactly 0 heavy industry as it only affects new-build or is given nigh-on decades of notice (and is obsessed over here because of engines, but has never proved a problem), and the only reason the UK got slapped down on fisheries is because we were fishing hundreds of miles off-shore in another country's territorial waters! If that happened to us we'd be up in arms!

Christ, this is basic stuff! And yes, I am annoyed because it drives me to despair that we're even having to have this debate. When people say "questionable benefit" when we make hundreds of billions of pounds out of it just shows how ridiculous the amount of self-interested propaganda out there actually is.

 

[Xenophon PCDGS]

As long as HSBC keep my local branch open in Wilmslow, I am not really worried...

 

[richa2002]

I've heard it all now. Governing our own country is referred to as an 'abstract notion of democracy'. It's my view that no other individual should make/dictate our laws unless they have been voted by us, the country. I understand your argument that the general populous can't be trusted to elect the right people to run the country but are you really arguing the alternative of people running the show with minimal to no democratic mandate in the blind hope they do a better job? There are far more interests in the EU than the UK and as a result, the majority of decisions are decided by individuals not working in our interest.

I never knew having decisions made by largely un-elected individuals within the confines of our nation state (the UK) was basic stuff. Your disregard for democracy is astonishing. As I said in my last post though, it depends if you still see the United Kingdom as a separate nation state or whether we're just one big country called Europe.

 

[yorksrob]

Who owns a company is somewhat irrelevant when the vast majority of the tax produced by said company is collected in Britain, and the vast majority of the valuable economic output is equally in this country.

If that's the case, why are you so worried about the headquarters of HSBC moving?

The idea that it doesn't matter who owns the company has been peddled by the free marketeers, but the real world doesn't work like that. The owners of the company will be influenced by the decision makers in their own countries. Satellite operations in external countries will always play second fiddle. Who do you think will get downsized when the inevitable redundancies get made.

 

[TheKnightWho]

I've heard it all now. Governing our own country is referred to as an 'abstract notion of democracy'. It's my view that no other individual should make/dictate our laws unless they have been voted by us, the country. I understand your argument that the general populous can't be trusted to elect the right people to run the country but are you really arguing the alternative of people running the show with minimal to no democratic mandate in the blind hope they do a better job? There are far more interests in the EU than the UK and as a result, the majority of decisions are decided by individuals not working in our interest.

I never knew having decisions made by largely un-elected individuals within the confines of our nation state (the UK) was basic stuff. Your disregard for democracy is astonishing. As I said in my last post though, it depends if you still see the United Kingdom as a separate nation state or whether we're just one big country called Europe.

I'm arguing that the people who should make the decision should be the people we've elected, who are by far in favour, because the majority realise that it's in the economic interests of the country. This isn't a few billion here or there we're talking about.

And yes, it is an abstract notion of democracy when we don't apply this logic to the vast majority of other areas of government. Or is it undemocratic that we have delegates at all? Plus it's a complete myth that there's no democratic mandate: the UK literally sends people to work for its interests, and it's not an either/or thing: there are plenty of decisions (indeed, almost all) that are in the interests of both parties. To argue that it's a blind decision and that we just have to have faith completely misses the point. It's not this us vs. them thing, and it never has been: it's indicative of our island mentality that we as a nation can't seem to understand the concept of mutual beneficiaries...

If that's the case, why are you so worried about the headquarters of HSBC moving?

The idea that it doesn't matter who owns the company has been peddled by the free marketeers, but the real world doesn't work like that. The owners of the company will be influenced by the decision makers in their own countries. Satellite operations in external countries will always play second fiddle. Who do you think will get downsized when the inevitable redundancies get made.

Who owns a company and where a company is based is not the same thing.

 

[yorksrob]

Who owns a company and where a company is based is not the same thing.

True, however, my point was made about British companies sold to foreign companies and ending up based overseas as a result. Ultimately, this leads to exactly the same worries about employment and de-skilling prompted by HSBC threatening to leave, only more so.

I just find it odd that when HSBC threatens to move it's HQ, we're all quaking, yet when a technological or even a traditional manufacturing company gets bought out involving job losses, it's apparently no big deal because the City boys say so.

 

[TheKnightWho]

True, however, my point was made about British companies sold to foreign companies and ending up based overseas as a result. Ultimately, this leads to exactly the same worries about employment and de-skilling prompted by HSBC threatening to leave, only more so.

Perhaps, although in practice a previous company HQ would become a national HQ for the UK, or a regional HQ for the surrounding countries. Or at least, that's almost always what happens when a company gets bought out.

In this case, this is a company actively making the choice to move, which is a different thing entirely.

 

[DownSouth]

The idea that it doesn't matter who owns the company has been peddled by the free marketeers, but the real world doesn't work like that. The owners of the company will be influenced by the decision makers in their own countries. Satellite operations in external countries will always play second fiddle. Who do you think will get downsized when the inevitable redundancies get made.

How do you suggest that works for a corporation such as HSBC Holdings where the shareholders are spread all around the world?

What about the shareholders of the shareholders? Are you going to obsess about that too?

Do you not think that the location of significant operations (including the global headquarters) would carry more weight than the location of shareholders?
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Perhaps, although in practice a previous company HQ would become a national HQ for the UK, or a regional HQ for the surrounding countries. Or at least, that's almost always what happens when a company gets bought out.

And in the case of secondary industries, often international ownership can actually lead to increased operations as they become part of a global business operation.

In this case, this is a company actively making the choice to move, which is a different thing entirely.

This would be moderately bad if it was a secondary industry where it is subject to competition, the pace of R&D, fluctuating costs and labour policies.

That it is a company in the service industry flagging their intention to shift their operations over declining confidence in the economy is really bad.

 

[TheKnightWho]

Especially when this is one of the largest banks in the world, and the largest bank in the UK. This is not comparable to Cadbury's being bought out by Kraft!

 

[Jonny]

Well, if the company is at risk of being selectively over-taxed (because it's a bank) and it is at risk of not being able to recruit talent because it is in the most expensive (to live) area of the UK, and running up against 50% marginal income tax (as several political parties, who may get elected in the next few weeks would do) and 2% personal National Insurance, as well as Employer's National Insurance contributions, then it is hard to blame them for 'wanting out'.
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Civilisation needs taxes to help the needy.

That's as maybe, but with a bloated public sector (up to 50% of GDP in recent years) it is time to 'shrink the beast'. Besides, much of the strain on the NHS is largely down to people drinking too much, smoking too much (or should that just be smoking) and a combination of eating too much and not getting enough exercise. The problem is that the system gives no incentive to avoid such behaviour.

As well as that, why is under-18 education almost universally subsidised? Sure it is a good idea in principle but the parents should pay where they can afford to do so. Sadly none of the political parties will go there (Maggie tried in 1982 but the idea didn't make it out of the cabinet room).
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That it is a company in the service industry flagging their intention to shift their operations over declining confidence in the economy is really bad.

Agreed, that is why I am concerned re: the election, that a certain Mr Miliband would cause more harm than good. Labour's offer at this election is too good to be true.

 

[DynamicSpirit]

I've heard it all now. Governing our own country is referred to as an 'abstract notion of democracy'. It's my view that no other individual should make/dictate our laws unless they have been voted by us, the country.

We elect MPs to Parliament, and that Parliament had final authority for making laws (although in practice, the details of all laws will be worked out by civil servants).

We similarly elect MEPs to the European Parliament, and those MEPs deal with policy and those rules that the UK Parliament has in effect delegated to the EU (though, again, in practice, the details tend to be worked out by civil servants).

Your post gives the impression that you believe this process is right and democratic when done at Westminster but somehow wrong (even though it's basically the same process) when done in Brussels. Care to explain why?

 

[TheKnightWho]

Well, if the company is at risk of being selectively over-taxed (because it's a bank) and it is at risk of not being able to recruit talent because it is in the most expensive (to live) area of the UK, and running up against 50% marginal income tax (as several political parties, who may get elected in the next few weeks would do) and 2% personal National Insurance, as well as Employer's National Insurance contributions, then it is hard to blame them for 'wanting out'.
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That's as maybe, but with a bloated public sector (up to 50% of GDP in recent years) it is time to 'shrink the beast'. Besides, much of the strain on the NHS is largely down to people drinking too much, smoking too much (or should that just be smoking) and a combination of eating too much and not getting enough exercise. The problem is that the system gives no incentive to avoid such behaviour.

As well as that, why is under-18 education almost universally subsidised? Sure it is a good idea in principle but the parents should pay where they can afford to do so. Sadly none of the political parties will go there (Maggie tried in 1982 but the idea didn't make it out of the cabinet room).
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Agreed, that is why I am concerned re: the election, that a certain Mr Miliband would cause more harm than good. Labour's offer at this election is too good to be true.

Regarding your education tax:

These things are already paid for through taxes. It makes no sense to make parents pay directly, as it'll just result in people slipping through the cracks and not getting educated (as well as the problem of the squeezed middle) without actually making any difference to the economy whatsoever.

 

[richa2002]

We elect MPs to Parliament, and that Parliament had final authority for making laws (although in practice, the details of all laws will be worked out by civil servants).

We similarly elect MEPs to the European Parliament, and those MEPs deal with policy and those rules that the UK Parliament has in effect delegated to the EU (though, again, in practice, the details tend to be worked out by civil servants).

Your post gives the impression that you believe this process is right and democratic when done at Westminster but somehow wrong (even though it's basically the same process) when done in Brussels. Care to explain why?

The fundamental difference as I've said is that I consider our nation state to be just the United Kingdom and as a result, no-one outside this country has any right to decide/influence our laws. Parliament is made up of MPs elected by us and represent us. As a result, it is democratic as far as I'm concerned. The European Parliament is largely made up of those who not elected by anyone in this country.

Once again I state, this is all about if you consider the United Kingdom as being a separate nation state which governs itself or being part of a larger European state. If it's the latter then naturally you won't have any problem with a French MEP for example having just as much influence as a British one. I believe it is wrong that any position of law making has been handed over to a European level where this is the case. All I ask is that we as a population are given a vote as to whether we give away our national sovereignty to the EU or not.

 

[Peter Mugridge]

Especially when this is one of the largest banks in the world, and the largest bank in the UK.

It's also the only big bank that didn't need bailing out.

 

[TheKnightWho]

The fundamental difference as I've said is that I consider our nation state to be just the United Kingdom and as a result, no-one outside this country has any right to decide/influence our laws. Parliament is made up of MPs elected by us and represent us. As a result, it is democratic as far as I'm concerned. The European Parliament is largely made up of those who not elected by anyone in this country.

Once again I state, this is all about if you consider the United Kingdom as being a separate nation state which governs itself or being part of a larger European state. If it's the latter then naturally you won't have any problem with a French MEP for example having just as much influence as a British one. All I ask is that we as a population are given a vote as to whether we give away our national sovereignty to the EU or not.

Governments and nations are not the same thing. The UK is part of loads of supranational organisations that influence or "decide" our laws:

EU
ECHR (importantly not part of the EU)
UN
NATO
Numerous alliances, notably the "special relationship"
etc.

To act like the EU is some horribly undemocratic organisation because it's supranational and to ignore the numerous other things we're part of because they apparently have no right to govern over us just utterly ignores the reality of the situation - all of those organisations influence and in some cases write UK law, and we always have a veto on certain high-profile issues. Frankly, being a nation has literally nothing to do with the state or government: we have several nations inside the UK, just as numerous other countries do also such as China, Russia, the US, Canada, Brazil, South Africa etc. etc. etc.

And on having influence: you forget that not all MEPs debate on all issues - otherwise how do you think Scotland coped in the UK for hundreds of years before devolution? It's important to note that even the possibility of the UK leaving is going to be awful for the economy as businesses flee, and frankly with all this talk of democracy I've still yet to hear of any laws that these people object to so much. It's always talk of bendy bananas or metric - which are irrelevant - issues where the UK was clearly in the wrong anyway - such as the cod wars - or issues that the UK wouldn't get away from anyway by leaving the EU - such as the ECHR or immigration and freedom of movement, which we already have an exemption on.

 

[richa2002]

The EU is massively more involved with laws and regulations than those other organisations you mention. Rather importantly too, rhe ECHR, UN or NATO don't open our borders to the rest of Europe with uncontrolled immigration.

I don't understand how we have an exemption from immigration and freedom of movement apart from Schengen?

I'm sorry but it's a matter of democratic principle. I don't care if the laws are beneficial or not. If they are then we can make them ourselves with a more democratic mandate.

 

[DownSouth]

Especially when this is one of the largest banks in the world, and the largest bank in the UK. This is not comparable to Cadbury's being bought out by Kraft!

Even Cadbury's operations in the UK were too big to be asset stripped, they clearly bought it with the intention to operate it as a going concern.

An example of the opposite would be the rail vehicle building industry in the UK, which consisted of a bunch of small companies (yes, even BREL was not a huge player on a European or global scale) that were snapped up as a way for the big players to get a foot in the door of a good seller's market. The subsequent decline of UK-based operations was due to those inefficient parts being closed and the slack taken up by the European plants large enough to have an economy of scale.

 

[TheKnightWho]

The EU is massively more involved with laws and regulations than those other organisations you mention.

I don't understand how we have an exemption from immigration and freedom of movement apart from Schengen?

I'm sorry but it's a matter of democratic principle. I don't care if the laws are beneficial or not. If they are then we can make them ourselves with a much more democratic mandate.

No, it really isn't. And you've still not addressed the fact that we have a huge say in the laws that affect us. Romanian MEPs don't vote on issues that mostly affect the UK, and on issues that affect everyone it is entirely possible to get solutions that benefit everyone and to get bespoke situations - these happen all the time!

Or do you think issues just disappear when we leave the EU? That French farmers stop outcompeting British ones, or that refugees are going to stop trying to sneak in? The reason we can't deport them and do what UKIP wants, for example, is the ECHR. Indeed, an enormous amount of our immigration policy is dictated by what we're constitutionally bound to do - by an organisation created by British lawyers to ensure English common law had a large influence in European matters! This talk of uncontrolled immigration is a perfidious creation by right-wingers who don't seem to understand that it's got very little to do with the EU - and that our exemption from Schengen is exactly what allows us to be able to control our borders in exactly the same way we would control them if we left because we would still be in the ECHR. Those immigrants wouldn't go away if you suddenly tried to shut the borders or massively limit them either.

And if it's a matter of democratic principle, then you can entrust your elected representatives to do it. They manage with everything else - or would you prefer to have referenda on the UN and NATO, which do indeed dictate a large amount of our spending considering they're concerned with the defence budget? Or indeed on every minutiae of government that the average person has no clue about? The average person elects representatives to enact broad ideology and not specifics, after all.

Oh, and one last thing - if we suddenly left the EU you're going to have a very big problem with UK nationals living in the EU. I love how everyone forgets about them, even though they number 1.8m people - almost exactly the same as the number of EU immigrants to the UK.

 

[ExRes]

I assume that anyone saying 'hurrah' to a possible HSBC departure are not employed by them, don't have relatives employed by them, don't know anyone employed by them and don't give a toss for the futures of any HSBC employees or employees of companies that depend on HSBC for their income, not everyone employed by HSBC banks offshore and orders a new Porsche every year believe it or not

 

[Jonny]

Regarding your education tax:

These things are already paid for through taxes. It makes no sense to make parents pay directly, as it'll just result in people slipping through the cracks and not getting educated (as well as the problem of the squeezed middle) without actually making any difference to the economy whatsoever.

The upside is that it would remove much of the annoyances in the tax system - having money sent to sectors of society that the tax payers don't care for. After all, having children is practically voluntary (contraception is gratis on the NHS) and perhaps the squeezed middle would be able to avoid the squeeze by not having children in the first place.

 

[AM9]

The position of anti-EU proponents is bizarre. In addition of all that has been said about the democratic principle operating at all levels, there are significant restrictions and rules that we are bound to where we have NO democratic voice, particularly where the US is involved.
One high profile issue at the moment, (it keeps popping up from time to time) is that of extradition. Why don't we demand equal rights in the process? After all, the US legal system is supposed to be as fair (or unfair) as ours so what have the Americans to lose?
Strangely enough, these anti-EU libertarians don't seem to make much fuss about our complete lack of democratic rights there.