We’re still pay­ing for Gor­don Brown’s mis­takes

The Sunday Post (Newcastle) - - POLITICS - By Ian Fraser FI­NAN­CIAL JOUR­NAL­IST Ian Fraser is au­thor of Shred­ded: Inside RBS: The Bank That Broke Bri­tain

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.

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