THE BLOG

Let HSBC Go, We Don't Need Them

15/02/2016 23:18 GMT | Updated 15/02/2017 10:12 GMT

So the Hong Kong and Shanghai Banking Corporation have decided to stay put in the UK. Should we start the celebrations? Or perhaps we should put the champagne on ice. Because, wait for it, yes trickle-down economics doesn't actually work.

We constantly have neoliberal ideals rammed down our throats. We need these banks and corporations because they create jobs, growth and economic prosperity. We all benefit from their presence bla bla bla. The reality, as with most edicts of the establishment, is of course the other way round. It is the banks and corporations, which benefit from us the people and in fact exploit us.

HSBC announced last April that they were reviewing whether to move back to Hong Kong. In the wake of the election victory, the Conservatives have adopted a more emollient approach. They announced that the days of bashing bankers are over. Wait a second. Did I miss that week? Heck, the banks have made record profits and bonuses since the crash whilst the civvies have borne the brunt of austerity.

Since the election, Osborne has replaced the more pugnacious head of the main financial watchdog Martin Wheatley and has watered down the bank levy. The bank levy reduction means that HSBC's tax bill will drop from around £1 billion down to the £300 million mark. Heck that's a hell of an incentive to stay. The incredible thing to note here is that HSBC have effectively put a gun to the temple of the government and blackmailed them into changing their policy.

Add to this that the Financial Conduct Authority or FCA has quietly dropped a review into the HSBC tax scandal involving its private Swiss banking arm. The FCA has also dropped a review into banking culture. A spokesperson stated that there was nothing to investigate and therefore nothing to drop on both occasions.

Hilariously, HSBC cited the high-quality regulatory regime in London as one of the reasons behind their decision to stay put. This corporate speak translates loosely into a toothless regulator, which has shelved two reviews and a supine government, which has more than halved their tax bill. It is actually the light-touch deregulated environment of the UK, which is the reason they have opted to remain. Along, of course, with the volatile economic and political situation in China.

A headline in Monday's Financial Times just about summed up the farcical situation. It read, 'HSBC buries City's feud with UK'. So let me just get this straight. That's the City of London's feud with the United Kingdom. A discrete admission that the City is effectively an independent territory, a law unto itself. A feudal fiefdom, dating back to medieval guilds, beyond the reach of Westminster. Which it is. It has its own Lord Mayor. Its own police force. It is a secretive tax haven. And it is at the centre of a spider's web of illicit global financial flows and a series of concentric rings of peripheral tax havens.

HSBC stated that they have not directly lobbied the government. Of course not. They don't need to. We're talking here about banks that are too big to fail. Too big to prosecute. And too big for the government to stand up to.