We’re still paying for Gordon Brown’s mistakes

When Alistair Darling said he would do whatever it takes to save RBS from collapse in October 2008, neither he nor his boss Gordon Brown had any real idea of the extent of the bank’s difficulties or how toxic it had become.

This has underpinned everything that has gone wrong with RBS since.

It meant the UK Government wound up paying way over the odds for its stake in RBS – £45.5bn for something that was essentially worthless.

This in turn explains why reprivatising the bank at a profit has proved so elusive.

The Government’s lack of knowledge about RBS’s true state also meant that, instead of being sacked, pilloried and perhaps, dare I say it, prosecuted, executives, including former chief executive Fred Goodwin, were permitted to swan off into the sunset with their pensions and past bonuses intact (though Goodwin was later stripped of his knighthood).

It also ensured that Brown’s government failed to impose meaningful conditions on the bailout.

They probably believed that after some emergency surgery and a blood infusion the patient would soon get back to business as usual.

However the diagnosis was seriously flawed.

RBS remains in the eyes of many an untrustworthy and immoral institution and taxpayers are unlikely ever to see a return on their investment.