Maxing Out The Credit Card of Trust

The facts. The taxpayer owns 83% of the bailed-out Royal Bank of Scotland. Last year the bank made a loss of more than £1 billion. Stephen Hester, the chief of the Royal Bank of Scotland, this year was paid £1.2 million salary, a £2 million bonus (claimed annually) and £4.5 million in company shares: a pay packet this year of £7.7 million. Alongside Mr Hester, 323 other senior staff within the company were awarded £325 million this year. This in a year when the cost of banking reforms, the measures to increasingly force banks to behave more responsibly, have been passed straight onto shareholders and customers.

There are two major issues with this. The first is the way banks pay their senior staff and executive members. The issue is regularly raised by the public but the banks, sealed in a financial world of their own, seem not to hear their customers’ disgust and outrage. No one person within a company - even one making profit, which RBS isn’t – is worth £7.7 million in one year. His decisions couldn’t be considered so skilful as to justify that amount of money: there are others who could replace him and would replace him for far less. Even if he worked every hour of the year in that year he still wouldn’t be worth that amount. It is obscene. What is worse is the fact that the money going into his bank account comes directly from our pockets. The taxpayer owns 83% of the company, yet has little say over what this man can pay himself. The taxpayer, in these lean times, should be getting every penny of that money back and RBS should be running back under its own financial steam. We are being scammed. We are being screwed.

The second issue is that the disturbing deal identified above was sanctioned by our very own government. David Cameron, Nick Clegg and George Osborne - who keep telling us how desperate the economic situation in the country is and how they are bringing the banks back to better practice – have signed off on this deal. They are happy for it to proceed, even given that the taxpayer is a 83% shareholder in the company. How little must the Coalition Government think of the electorate to allow this to happen, when they should know how powerfully we feel about the issue. The public hold the banks accountable for their part in the ‘financial crisis’. Although, it is looking increasingly like the crisis is not as pressing as the electorate were led to believe by the government, if they can voluntarily finance wars and afford to allow senior bank staff to be paid in such a fashion. Yet again, the government is demonstrating how stupid they think the electorate is. It believes it can continue to reward the establishment it truly represents, at the same time as fooling us into thinking they are taking our concerns seriously.

There are only really two forms of protest left against this kind of reckless behaviour. The banks aren’t listening. The Coalition Government isn’t listening. They won’t be able to ignore numbers, however. Nothing grabs the attention of a banking executive or politician more than a graph with a sharp downward trend. If people deplore this kind of behaviour and know of it happening in the bank that holds their money, then they should move their funds to a bank that behaves more responsibly and listens to its customers. Similarly, if the Coalition Government is insulting our intelligence – saying one thing but doing another – then this breach of trust should result in large numbers of people who voted for the two constituent parties making up that coalition, not voting for them again. Only this way will both banks and governments listen and behave in line with our expectations. Only this way - in the creation of a cautionary tale - will banks and governments be forced to behave better in the future.