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Barclays Bank Row – Lessons for Communications

The revelation on Friday that Barclays Bank paid only £113m in UK Corporation Tax in 2009 caused widespread outrage.  This was then followed on Saturday by activists launching a campaign of sit-ins at Barclays branches further drawing attention to the issue.

From a Crisis Management point of view, the most extraordinary aspect of this whole incident has been the lack of communications from Barclays itself.  Given that Barclays has known since the 12th of January (when Bob Diamond appeared before the Treasury Select Committee) that this information was going to be made public; one would have expected that they would prepare a robust defence of their position.  However, they have been almost silent, and the comments that they have made such as “Any link between Barclays Group profits and the amount of tax paid to the UK government is inappropriate – there is no direct correlation between the two” do not provide any useful information.

Meanwhile, the BBC has calculated (based on Barclays’ financial reports) that the bank in fact paid an “Effective Corporation Tax rate” globally of 23% in 2009 and 25% in 2010: both quite close to the UK Corporation Tax rate of 28%.  Why did Barclays not present figure like these to try to reduce people’s anger?  One of the keys to successful communication during an incident or crisis is to establish yourself as a useful and credible source of information: if you don’t, the media and other interested parties will simply go elsewhere.  Unusually, in this example, the BBC itself has filled the vacuum left by Barclays and presented quite a positive picture on their behalf; however, it is generally unwise to rely on others to perform this role for you.