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BASIC capitalist rules of engagement dictate that the Royal Bank of Scotland should have been allowed to collapse when its management ran it into the ground, but it was bailed out by the public, by the taxpayer.
This act alone set RBS apart from countless manufacturing companies — or even entire industrial sectors — that were adjudged unprofitable and allowed to die, no matter the effect on workers, families and entire communities.
In fact, the banking bailout initiated by New Labour prime minister Gordon Brown wasn’t confined to a single bank — the entire private banking system was salvaged by the state.
Quantitative easing extended by the Bank of England was effectively a massive and largely free injection of funds into the banks to steady the ship and provide the means for profitable lending.
Although they took the taxpayer lifeline willingly, this didn’t persuade the recycled bank managements that they owed any debt to the public interest in terms of a liability to assist small businesses or would-be homeowners.
No, their quest was maximum profit, so they prioritised credit card expansion, using public cash received at minimal interest to offer credit at APR rates of up to 30 per cent.
And guess what? All the banks that were in the slough of despond are once again profitable and it’s all down to top management genius, all fully deserving of bumper salaries and bonuses, just like the old days.
Even RBS bosses want their turn at the trough, relishing the unconditional nature of the government handouts they received.
Their determination to close 259 bank branches, causing 800 job losses in England and Wales and casting local communities adrift, sums up their utter lack of concern for anything but the bottom line.
John McDonnell is right to demand that Philip Hammond step in and use the government’s majority shareholding to curb this selfish greed — but he won’t.
That will be a task for the next Labour government.
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