WHEN evidence emerged of large-scale tax evasion through a Swiss
subsidiary of HSBC, it was natural that fingers would point at the
bank's former chairman and chief executive, Lord Green of
Hurstpierpoint, an Anglican priest since 1988. For one thing, he
had accepted a post as trade minister in David Cameron's
Government, thus making him fair game for political criticism. For
another, he published a book on business ethics, quoted by The
Guardian this week, in which he argues that "Values go beyond
what you can get away with," and that responsibility for companies'
ethical behaviour rests "with their boards, of course".
The 2013 accounts for the Church Commissioners, the most recent,
show that HSBC ranks fifth in the list of investments, a holding of
£39.4 million. Yet there is a real question whether banking can
continue to be regarded as an ethical investment. Many of the large
banks are currently setting aside funds to pay fines or
compensation, having been found guilty of indulging in practices
that crossed the line from unethical to illegal. Yet the concept
that banks are too big to fail continues to protect them from
excessive scrutiny. Peter Selby, a former Bishop of Worcester,
wrote two years ago: "We have trusted the banking system with far
too much of our well-being, and placed our hopes on money that the
system generates for its own profit. The result has been gambling
and usury rather than a just and sustainable future" (Comment,
28 June 2013). Other countries, among them France and Spain,
have recovered more tax than the UK has from customers of the Swiss
bank since details were first leaked five years ago. The
parliamentary public accounts committee will want to ask Lord Green
about what he knew of the activities of the Swiss bank, and the
8500 British customers who deposited £14 billion there during his
time in charge. But it is also likely to summon a former head of
HMRC, David Hartnett, who brokered an amnesty with British overseas
tax evaders (and who subsequently took a job with HSBC).
The culpability or otherwise of one or two individuals seems to
be of little significance when viewing the banking sector as a
whole. Yet the Banking Standards Commission focused on personal
responsibility when it reported in 2013. Archbishop Welby, a member
of the Commission, said: "At the heart of good banks are good
people. And if we want to have good banks, we have to believe in
fallible people. . . If we believe in fallible people, we will . .
. recognise that human beings are both more fallible than a
systemic regulatory system will allow, and have greater potential
than our pessimism might permit." In the absence of a confession,
let us assume Lord Green is a good person. The implication, then,
is that his bank was not only too big to fail: it was too big to
manage. When millions of pounds of tax revenue are at stake, this
is an unacceptable position for a government and an industry to
find themselves in.