Slap in the face for victims of bank rip-offs
Campaigners’ fury over tax-avoiding lawyer made head of City watchdog
CAMPAIGNERS warned of an Establishment stitch-up last night over the appointment of a taxavoiding lawyer as head of the City watchdog.
Victims of bank rip-offs calling for reform said they would not trust the Financial Conduct Authority if Charles Randell became chairman.
They said his involvement in a notorious tax-avoidance scheme called Ingenious Film Partners 2 cast doubts on his ability to hold the City to account.
Critics also raised doubts about the actions of Treasury mandarin Sir Tom Scholar, who oversaw Mr Randell’s appointment but decided not to tell Chancellor Philip Hammond about his tax affairs.
The appointment was criticised by victims of wrongdoing by major lenders, and by entrepreneur Lawrence Tomlinson, who wrote a damning report on a toxic business banking unit at Royal Bank of Scotland.
Its Global Restructuring Group falsely claimed many of the thousands of small firms it was meant to be helping were failing, before driving many into the ground.
Those involved in the scam made a fortune in fees and kickbacks, but destroyed many small firms. Former clients want to see the FCA prevent further abuses.
Mr Tomlinson said: ‘Businesses affected by bad banking practice need a strong and decisive regulator who is unafraid to challenge large city institutions, holding culprits to account.
‘I hope Randell’s past involvement in the City does not impede his judgment and create cultural bias on the side of the finance sector. His statements on his plans as chairman have been commendable, but can a leopard ever really change its spots?
‘He has, after all, been part of the entrenched elite in the City.’
It emerged this week that Mr Randell ploughed more than £ 100,000 into the Ingenious scheme, which let backers limit tax bills by taking advantage of deductions for film producers.
He claims his financial adviser told him the taxman had given it approval, but in 2013 HM Revenue & Customs wrote to him to warn about its concerns. Giving evidence to MPs on the Treasury Select Committee, Mr Randell said he immediately parted company with his advisor and paid £114,000 demanded by HMRC.
The former partner at the law firm Slaughter and May, who reportedly earned £500 an hour from taxpayers for working on state bank bailouts during the financial crisis, explained what had happened to head-hunters who approached him about the FCA job, and asked them to pass this on to the Treasury.
But mandarins overseen by Sir Tom – who was responsible for David Cameron’s efforts to renegotiate Britain’s EU membership before the Brexit vote – decided to interview him anyway. They gave him the job, which was then rubber-stamped by Nicky Morgan, chairman of the Treasury Select Committee, after grilling him herself about his tax affairs.
But campaigners who are fighting for banking reform insisted last night that a rethink was desperately needed.
Nikki Turner, whose business was destroyed by rogue bank staff, now runs the campaign group SME Alliance.
She said: ‘ I’m really shocked. As arrogant as these people are, they must realise that their credibility has gone right out of the window.
‘They’re already on such fragile ground, because most victims don’t trust the FCA anyway, and to put someone like this in charge is a slap in the face to the small business world and to all consumers.
‘It’s just another case of do what I say, not what I do, and if they wanted to build any trust they wouldn’t go ahead with it.’
Anthony Stansfeld, the Police and Crime Commissioner for Thames Valley Police, which prosecuted a gang of rogue bankers who wrecked businesses for profit, added: ‘Mr Randell is another Treasury plant who was put in there by civil servants who didn’t tell the ministers.
‘There’s a tremendous incentive not to rock the boat, and that permeates the whole system at the moment.’
A Treasury spokesman said: ‘Charles Randell has extensive experience in UK financial services regulation and is the best person for the job.’
The FCA declined to comment last night.