RBS . . . Osborne’s Having a Laugh!

So, our illustrious chancellor has sold off the first tranche of our shares in Royal Bank of Scotland with a mere £1 billion in losses. (It could be £1.5bn when the actual share price is known on Tuesday). Bet the hedge funds who scooped them up won’t be making any losses. Then again they wouldn’t have been suckered into this odious deal in the first place!

But the real truth of this abusive scam is much worse. We paid £45bn for a bankrupt company that had achieved the largest annual loss in UK corporate history! It was bankrupt when we bought it and it is still bankrupt now, along with all the other private banks. At this week’s prices we will get roughly £30bn back for our outlay of £45 bn, making our losses not £1bn but £16bn . . . all on a company that is worthless!

In the chancellor’s annual Mansion House speech in June 2013 he stated about the sale that – “getting the best value for the taxpayer, maximising support for the economy and restoring them to private ownership” and “Now is the time for RBS to rebuild itself as a commercial bank, no longer reliant on the state, but serving the working people of Britain.”

Does he really believe we are a bunch of Muppets? “Serving the working people of Britain”. Banks have never served us but only screwed us with mountains of debt! How it “maximises support for the economy” when it is bankrupt and returning to the same pool as all the other equally bankrupt banksters is beyond me. Greece and a growing number of other countries will tell you none of the banks are doing their economy any favours!

Then there’s the governments media propaganda machine, who tell us Osborne took advice from James Leigh-Pemberton, head of UK Financial Investments, the body who look after taxpayer stakes. Formerly educated at Eton, he is the son of Robin Leigh-Pemberton who was Governor of the Bank of England from 1983 – 1993. All smells a bit incestuous to me . . . Just saying!

Only a few weeks ago we were told that this sale had the blessing of both the Bank of England (a private financial company) and independent adviser Rothschild. Does this revised information suggest the PR machinery had its knuckles rapped for putting a Rothschild and the Bank of England in the spotlight on such a dodgy deal?

I raise this because the Guardian have reported that the letter from the Treasury recommending the sale was signed by the ‘second’ permanent secretary in the absence of the most senior civil servant in the Treasury, Nick Macpherson. Has this canny mandarin decided to distance himself from such an abusive deal? . . . You decide.

But this, of course, is what ‘Austerity’ is all about. We are made to watch helplessly as our national assets are sold off at rock bottom prices, purportedly to pay the odious debt that all of these very people and institutions have saddled us with in the first place. What really rattles my cage is that RBS was bankrupt when we bought it and has flagrantly continued its dubious business practices, supported by our money.

Fred Goodwin, the man responsible for the collapse of the bank walked away with outrageous benefits that included an annual pension of £555,000 (subsequently reduced to £342,500) and an estimated tax free fund of £2.7 million. To this day he has shown no remorse whatsoever for his aggressive greed and incompetence.

His successor, Stephen Hester, was no better, overseeing senior executive’s demands for a £1.5bn bonus when the company had just made a £1.1 bn loss. Under his watch there was a loss of 34,000 jobs and a disastrous upgrade of the banks computer system which cost £125 million to cover customer compensation and a further £56 million in fines.

For this ‘expertise’ he received an annual salary of £1.1 million, taking home £1.5 million in bonus and pension payments in 2010. Leaving in 2013 he took with him in excess of £1.6 million as his ‘separation’ package.

The financial cost to the taxpayer for all of this incompetence is bad enough but our noses have been rubbed in it through a complete lack of any regulatory infrastructure or morality, by senior banking staff, regulators or government, in protecting our investment.

The 24% who voted the ‘Eton Mess’ into a majority government did so in support of ‘Austerity’ measures. RBS is a salutary lesson to them and the rest of us that we are now being treated as a joke. I don’t know about you but that leaves a very unpleasant taste in my mouth.

 

Until the next time

 

Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes