Government tax adviser 'sorry' for banking role during Libor crisis

Houses Of Parliament

The former head of the British Bankers’ Association has repeatedly told MPs she was sorry that she ended up at the lobby group at the time of banking crisis and the Libor rigging scandal.

Angela Knight, the former Conservative MP who ran the BBA between 2007 and 2012, faced questions on Tuesday from the Treasury select committee about whether her tenure at the association was a credibility issue for her. She disagreed.

MPs on the committee were taking evidence about her appointment as chair of the Office of Tax Simplification after a two-year stint at Energy UK. “I found myself in charge [at the BBA] at the time of the biggest banking crisis in history. I did what I could in the face of a hurricane,” she said. “If someone who does a difficult job and finds themselves in a very tricky position does what they can, is thereafter told, ‘You can’t do anything else,’ you’ll never get anybody to do a difficult job again. I tried my best.

“I am so sorry I ended up at the BBA during the banking crisis. I’m so sorry it chose me to be its target. I’m so sorry it took a trade association into a different era. I’m so sorry I never persuaded the authorities to take over [setting] Libor [rates] earlier and I’m so sorry the banks brought about [the] financial disaster they did.”

Knight admitted that she wished she had been stronger in dealing with the problems that were uncovered with Libor, the regime for inter-bank interest rates, which at the time the BBA administered. Knight had wanted the Bank of England to have observer status over Libor.

She also said she had disagreed with the judicial challenge mounted by the banking industry over compensation for the payment protection insurance (PPI) scandal. The challenge was brought to a sudden halt shortly after Lloyds Banking Group started paying out compensation in May 2011. The mis-selling scandal has proved to be the most expensive in history, incurring fines and costs of £26bn and rising.

Knight said she had wanted to resign over the PPI situation, but was asked to stay longer. She was prepared to quit her new role if there was political inference, she told the MPs.

During the financial crisis – which erupted within months of her taking charge at the BBA – Knight was regularly forced to defend the banking industry. She gave more than 800 broadcast interviews and made over 1,000 speeches.

The Treasury committee said it would publish a report following Knight’s appearance. “A report on the committee’s consideration of her personal independence and professional competence in the context of this role will be published in due course,” it said.

Knight told the committee she had been encouraged to apply for the two-day-a-month role at the tax body as it was an organisation interested in promoting women into senior positions. “The OTS is not an organisation that decides on tax,” she told the committee, adding that it was not set up to tackle tax avoidance and evasion.

Last month, research by Reuters found that five major banks had not paid any corporation tax in 2014 in their UK arms. Other multinationals have also been found not to paying as much tax as might be expected. Knight was asked to look at whether the OTS had a role to play in tackling this area, and said she was appalled at stories about avoidance.

Powered by Guardian.co.ukThis article was written by Jill Treanor, for theguardian.com on Tuesday 12th January 2016 16.42 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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