A YEAR ago, I wrote to Prime Minister Gordon Brown, before we knew everything we know now, about the vainglorious spending habits of the bank boards and executives bailed out by the Government. But we knew enough to work out that the non-executive board members couldn't have been as vigilant in overseeing and guiding the bank executives as they should have been.
I told the PM of my disappointment that Scottish Secretary Jim Murphy had said only experienced people would be appointed to the boards of banks rescued with public money. I wrote that while I appreciated the need for experience at board level, "it s
hould not be forgotten that the present situation was brought about by experienced bankers. It therefore seems sensible to use this opportunity to introduce a new, and wider, perspective into the banks' strategic thinking and planning".
That seemed self-evident, but the need for fairness presented an even stronger case for government appointees who were not part of the charmed circle of financial services insiders. As I wrote to Gordon Brown last October the new shareholders – taxpayers – may not have requested their money to be used to bail out the banks, but since it was, it seems perfectly reasonable for them to represent the public interest on the boards.
After offering to serve without payment on a board, an offer he could refuse, and did, I concluded by urging him to make banking practices "more in tune with the ideas of transparency and public accountability in all organisations that influence the life of every family in the land".
A year later, with the benefit of knowing the extent of the selfishness and greed that permeated operations at the policy-making level of the banks we had all boasted about and trusted to lead the Scottish economy into the new financial order of the 21st century, was I right, or was I right in calling for some new faces round the boardroom tables?
As is now evident, the people running the part-nationalised banks have reverted to type. It scarcely matters how many millions of pounds RBS has set aside for bonuses, it's the distaste that the new bosses should be doing the same old thing. Other public sector workers, untainted by the charges of failure and self-interest levied at banking executives, face redundancy, not rich rewards for managing banks some politicians believe are now too big to be allowed to fail.
In the name of democracy, this has to be sorted. Banks are not publicly-owned services, with a primary responsibility to serve the people, without profit being accrued unless it's for the sole purpose of investing in providing a better service.
Private businesses are different. They're owned by their shareholders, who've risked their own money and who're entitled to expect a reasonable return on their shares. Decent private business is aware of its responsibility to contribute to the wellbeing of the community in which it operates, as did traditional Scots banks. If the rewards are too rich, and the responsibility too grudging the banks forfeit their special status in relation to other private business.
A different measurement of worth has been applied to banks compared to the government inaction, that characterised the demise of other previously successful companies, like Woolworths, and many less well-known names . . . a case of "never mind the quality, feel the width".
Once again, a year ago, amongst others, I queried the wisdom of having every bank a big bank, and on a less philosophical note, suggested that the merger of Lloyds TSB and HBOS contravened EU competition rules.
Experienced people in our still-successful financial services companies assured me it is best to have some big banks leavened by some smaller, specialist banks, that stick to doing what they each do best, like lending to small businesses or lending to house buyers.
But seduced by the notion that size is everything, Gordon and Alistair brushed aside objections to the Lloyds TSB and HBOS merger, and whether knowingly or not, sold the Lloyds' shareholders short by failing to subject the merger proposal to proper checks.
Those who queried whether Lloyds shareholders had been deprived of relevant information, before they voted on the merger, regarding HBOS participation in the sub-prime mortgage market, were seen as Luddite spoilsports.
The only people still spinning that line are employees of the Labour Party's PR and thought control machine, whose received wisdom is that only a UK Labour government could have saved the banks, that would have sunk without trace had there been an independent Scottish government, of whatever political hue.
Before doodling out loud about which currency an independent Scotland will have, the SNP should take this head-on . . . as it looks like Westminster certainly won't.
