It was the kind of mandate tyrants made certain was delivered by their subjects.
It was the kind of mandate tyrants made certain was delivered by their subjects. On the first vote, 99.28% gave their total support, rising to 99.36% on the second. But the poll was not in the iron grip of a dictatorship. Rather, it took place yesterday, freely, in the General Assembly building of the Church of Scotland and concerned the future of a once-mighty engine of global capitalism, Edinburgh-based Royal Bank of Scotland (RBS). Nothing was more indicative of the dire straits RBS had sailed into than the near- unanimous approval by shareholders of a £20bn government bail-out.
The rescue package is likely to result in the bank losing its independence for the first time in a history stretching back more than 300 years, with the government expected to take control of a near-60% stake in the business. It is little wonder private shareholders, who have seen the value of their investment in RBS plummet, demand an act of contrition from Sir Fred Goodwin, the former chief executive, and Sir Tom McKillop, outgoing chairman, for their part in a profoundly reckless expansion and investment strategy that brought the bank to the brink of collapse.
In the event, both men said sorry, Sir Tom's apology being more freely forthcoming than Sir Fred's (between them they uttered the S-word five times). Sir Tom spoke of the need for a new chapter in the RBS story to begin. If, indeed, an episode has closed it was a shameful one. On Sir Fred's watch RBS turned out record profits but went on to make the first loss in its history. Whither the bank now? Stephen Hester, Sir Fred's successor, believes that phase one in the new story (the crisis) is coming to an end. Phase two entails negotiating a recession.
That is hardly reassuring for the many thousands of RBS staff facing an uncertain future but who are largely blameless for the predicament in which they find themselves (what value an apology or two in their predicament?). According to Mr Hester, RBS still aims to grow (in a responsible, prudent fashion, it is to be hoped) but with thousands of jobs likely to go as the bank scales back on its activities, the uplands look neither broad nor sunlit in a foreseeable future of contraction and lowering economic clouds.
There is also the question of whether RBS can regain control of its destiny (and whether it deserves to). This cannot be taken for granted. The greater the stake the government (the state) takes, the more the prospects of the bank remaining independent must be questioned. In this context, it is worth recalling that the government took a 35% stake in British Energy, having stepped in to rescue the business in 2002. That stake is in the process of being unwound for the taxpayer by the proposed sale of British Energy to EDF of France. No British banking player is in a position to take over RBS. So it is possible that ownership of RBS could transfer abroad, depending on the government's intentions (there are strategic considerations that militate against this). None the less, it is shocking that, in a matter of calamitous months, this could be considered a possibility for a once-mighty, independent Scottish and global institution. Saying sorry somehow seems inadequate.
