Public interest? Don't bank on it

MICHAEL FORSYTH, the last Tory Secretary of State for Scotland, asked the presenter of the TV show we were on if he could be described as a politician, rather than as he now is... a banker. Somewhat sheepishly for a man judged a wolf in wolf's clothing, he explained: "It's 'hang a banker' week."

Has the banking crisis really had the effect of causing banking bosses to see themselves as others see them? Have chief executives, for example, realised how customers view million-pound bonuses?

The haggling over kiss-off terms for high-flyers who fell to earth with share prices suggested leopards hadn't changed their spots. But the Prime Minister and the Chancellor performed an impressive political U-turn.

Whether the part-nationalisation of the banks resulted from a collective epiphany in Downing Street, or appeared the only way out, was unclear. But the spin doctors elaborated on a version of "the only way" thesis: Gordon the great and Alastair the altruistic acted swiftly and decisively and produced the formula to avoid global banking collapse.

Allowing for such exaggeration, the Prime Minister and his Chancellor looked almost confident their rescue package would succeed when they walked, American presidentially, into the Downing Street press conference.

Gordon Brown gave reasons for taking a 40 per cent share in HBoS and Lloyds TSB, but he didn't say whether this is dependent on the two banks' shareholders voting for the new terms of the merger, or quantifying the percentage share for each bank.

He announced taxpayers would have a 60 per cent shareholding in RBS, but said nothing about how their interests would be protected on the board, other than to say three new non-executive directors would be nominated. According to Jim Murphy, the new Scottish Secretary, and to Owen Kelly of Scottish Financial Enterprise, the intention is to appoint experienced "insiders".

He said they shouldn't be influenced by public policy considerations. But hasn't this crisis been brought about under the stewardship of banking insiders?

Shouldn't the banking industry be aware of its public responsibilities?

Don't taxpayers have the right to expect that someone at board level will represent their interests?

Perhaps because people were so relieved to see the political big beasts taking decisive action, key questions weren't asked.

For example, why hasn't the Government asked the Monopolies and Merger Commission if the proposed HBoS/Lloyds TSB merger breaks competition laws?

Three weeks ago, the PM and Chancellor waived this because saving HBoS was an "emergency". We now know HBoS is not in immediate danger of going out of business, thanks to the taxpayers' pounds in the petty cash kitty. But the potential size of a merged bank might militate against the taxpayers' interests because it will weaken inter-bank competition for their business.

Also, a niggling question that hasn't been answered: how can it be that three weeks ago, the PM and the Chancellor gave government approval to the Lloyds TSB rescue takeover of HBoS, presumably because they believed Lloyds TSB had the necessary capital to do so, yet Lloyds is now to be propped up by the taxpayer, like the "failing" HBoS and RBS? Is the government exerting pressure on Lloyds shareholders to nod through the merger?

Another omission from Gordon Brown's statement was any reference to how these changes in banking ownerships would impact on employment in the sector.

Taxpayers are bailing out the banks: will retail staffing levels, for example, be adversely affected by the proposed merger? Will employees whose jobs are lost, and who have mortgages with their employers, face losing their homes, also? And how many jobs are at risk amongst suppliers of goods and services to the banks?

This, and the likely loss of HQ functions from The Mound and the critical mass of top-level decision-makers attracted here because of the corporate functions, is why I've offered to be one of Gordon Brown's nominees to represent taxpayers' interests on the new board, should this questionable merger go ahead. It's still possible shareholders will vote against it... particularly if Lloyds shareholders discover the Government is the majority shareholder in HBoS.

This is in a unique region because of the numbers of people employed in the financial sector. Someone has to promote and defend these interests when decisions are being made, particularly when companies will look for operational savings during recession.

I'd be willing to do this without remuneration – it's that important for the people in Lothians, and the Scottish economy.