BARCLAYCARD TOO EXPENSIVE

Barclays promised that free banking is here to stay. The pledge came amid speculation many banks are planning to reintroduce charges on current accounts if watchdogs make them cut fees in other areas. Barclays reported a 35% rise in full year pre-tax profits to a record £7.14billion which was due mainly to a strong performance at investment banking arm Barclays Capital, with less than a fifth coming from providing banking services to individual Britons.

John Varley, chief executive, said, "The UK is pretty much unique in the developed world for offering free banking, that works to the advantage of the overwhelming majority of customers. We’re committed to delivering that to our customers because we think it is something they value greatly. The cost of banking in the UK, if you have a credit balance on your account or an agreed overdraft, is very low. If you look at value for money, the proposition offered by British banks is very good."

Mr Varley said Britain was lucky in having such a profitable banking sector and added, "It's good for ths country to have a good self-confident banks like Barclays, we employ about a million people here. As a result of our success in 2006 we pay a lot of tax. Our tax charge in 2006 will be about £2billion, think how many hospitals and schools and roads you can build for £2billion. Add in the tax paid on salaries and that number is far bigger." (Source: The Sun, Feb/07)

The chief executive of Barclays Bank admitted he does not use a Barclaycard to borrow money because it is too expensive. Appearing before the Treasury Select Committee, Matthew Barrett was criticised for the fact that while interest rates had fallen by more than two thirds since 1992 to just 3.5%, interest charged on a Barclaycard had come down from 24.6% to 17.9%. Asked by the chairman of the committee John McFall, Labour MP for Dumbarton, what he considered an excessive rate of interest, he replied, "I think if I had to pay more than I can get elsewhere in the market, I would consider going elsewhere."

Committee member George Mudie, Labour member for Leeds East, then asked if that meant Mr Barrett had a Cahoot card in his wallet as they charged interest at just 8%. Mr Barrett replied, "I don't borrow on credit cards because it is too expensive." The committee, which was investigating the transparency of credit card charges, also heard evidence from the chief executives of Lloyds TSB, Royal Bank of Scotland, HBOS and MBNA European Bank. MPs welcomed the new Summary Boxes which card issuers have agreed to introduce on adverts giving details of all charges and interest rates.

Barclaycard defended the comments of the chief executive. They issued a statement which said: "Matt Barrett's comments were made in the context of a debate about people facing long-term problems with debt. In the context of people facing long-term debt, credit cards are not the answer. Most people recognise that credit cards are not the cheapest way to borrow money in the long-term - they are a short-term borrowing tool offering complete flexibility and convenience."

Barclaycard has been accused by the Consumers' Association of misleading customers over a credit card offer. The group says the offer fails to make clear that the 0% interest on balance transfers is only available if the card is used to make purchases. The Office of Fair Trading (OFT) told Barclaycard to scrap a previous advert for the offer on the grounds it was "highly misleading." Barclaycard said the new adverts had been drawn up with the help of the OFT.

The Consumers' Association has written to the Advertising Standards Authority (ASA) urging it to take action against Barclaycard. The deal offers people a 0% interest rate on balance transfers until they have paid them off so long as they spend at least £50 a month on the card. The new debt is charged at a typical interest rate of 14.9%. If the card holder fails to spend at least £50 a month on the new card, interest at 6.9% is charged on the sum of the balance transfer.

Barclays chief executive Matt Barrett was criticised by the parliamentary Treasury Select Committee for its 0% credit card offer. One member of the committee went as far as describing the marketing tactics employed in attracting new card business as "a bait and a trap". Ashleye Sharpe of the Consumers' Association said that the new revamped 'Just the facts' advert still failed to alert customers to interest charges. "We are very disappointed to find that Barclaycard is still misleading consumers about the true cost of this deal,"

Ms Sharpe said, "This kind of marketing is corporate cynicism at its worst." In response, Barclaycard attacked the Consumers' Association for not having done its homework. "The Consumers' Association seems to be the only organisation that thinks this advert is misleading," Ian Barber, Barclaycard spokesman said. "We went through the advert with the OFT and the brochure mentions, no less than 10 times, that customers need to spend £50 a month to obtain the 0% balance transfer rate," Mr Barber added.

For over two decades, the Narmada Valley in central India has been the site of one of the country's most famous civil disobedience movements. Small farmers, tribal groups and fisherpeople refused to vacate their land for a series of 30 large dams, that would flood one of India's most productive agricultural regions and lead to the forcible displacement of an estimated 2 million people.

The Trans-Thai-Malaysia Project in southern Thailand has been overwhelmingly opposed since its inception by local people, who believe that the project will pollute the marine and local environments and rip apart the society in affected fishing villages.

Since 2000, the government has resorted to violence, intimidation, harassment, arrests, legal fraud, illegal detentions and threats of force to try to push the project through. Defying this violence, local opponents have peacefully occupied land near the gas separation plant construction site for nearly two years. Despite this massive community opposition, the human rights issue and the environmental impacts, Barclays Bank is financing both projects. (Source: Corporatewatch)

Barclays chief executive Matt Barrett, who told MPs he didn't use Barclays credit cards because the interest rate was too high, saw his pay package increase to £3.8million. The 59-year-old Canadian received £1.1million pay, a £1.9million bonus and £831,000 in share options. Another £990,000 was paid into Barrett's pension fund, as profits at the bank rose 20% to £3.8billion in 2003.

Eddy Weatherill, chairman of the Independent Banking Advisory Group, said, "This is a massive slap in the face for consumers. People are getting pig sick of this kind of greed. It's like sticking two fingers up to customers." Barclays said, "The reason Matt's pay is up so much is that we had an exceptional year." Well yes, you could say £3.8billion is pretty good!