Barclays is scrapping its controversial tax advisory business in a bid to improve the bank's reputation and improve ethics standards at the bank.

In a speech to be delivered tomorrow Barclays CEO Antony Jenkins will announce that the structured capital markets (SCM) business unit is to go. This division is responsible for advising big business on tax policy and structuring.

The bank released parts of the text covering future strategy on Sunday, with Jenkins saying: 'The old ways weren't the right way to behave nor did they deliver the right results - for banks themselves or for wider society ... banks that fail to change will become failing banks.'

Jenkins will say: 'There are some areas that relied on sophisticated and complex structures, where transactions were carried out with the primary objective of accessing the tax benefits. Although this was legal, going forward such activity is incompatible with our purpose. We will not engage in it again.

As well as a commitment to avoiding transactions whose primary objective is to access tax benefits, Jenkins will outline a new set of binding tax principles that will dictate the mandates in which the bank's executives are permitted to be involved.

Lord Lawson, former chancellor and member of the e Parliamentary Commission on Banking Standards, has accused Barclays of engaging in 'industrial scale tax avoidance'.

According to Reuters Lawson said parliamentarians had been told privately that SCM made annual profits in the 'high hundreds of millions' of pounds and sometimes 1bn. However Barclays chairman David Walker told him the scale of the business was 'much smaller than suggested'.

A large part of Jenkins's speech is expected to be about improving standards and culture at the bank following scandals such as the rigging of the Libor rate. He is also expected to unveil plans to boost profitability by cutting some operations and slashing costs, which could see 2,000 investment bank jobs axed.