Uncivilisation

Could your neighbours be fiddling a few pounds each week from Social Security? Would you get on the phone and denounce them to the authorities? That’s what our government tells us to do, on the basis that it’s wrong to fiddle the taxpayer.

How strange that fiddling a few millions, or billions, of pounds doesn’t carry the same stigma. It all depends what you mean by ‘fiddle’, of course. To my mind, bankers who gambled recklessly with investors’ and shareholders’ cash, lost, and then expected taxpayers to rescue them, have been fiddling – misappropriating money that did not belong to them, metaphorically fiddling while Rome burned.

The last straw for me was the case of Fred Goodwin’s tax. Not the laugh-in-your-face £703,000-a-year pension, although it is justifiable only in an upside-down world of reverse ethics, where the rich are deemed deserving and the poor have only themselves to blame for their plight. This argument blames the poor for failing to get themselves into positions where they can take what they like from the nation’s treasuries. No, in the case of Fred Goodwin, ex-chief executive of the now almost completely nationalised Royal Bank of Scotland, it was the revelation that the bank paid his personal tax of £1.8 million on a lump sum he withdrew from his pension fund.

The bank paid. That means, investors and shareholders paid. My 90-year-old mother, a shareholder, and thousands like her, paid. What moral right did the oh-so-generous directors have to decide that ‘the bank’ would pay Fred Goodwin’s personal tax bill?

I do not know if their decision was legal or illegal according to the small print of the relevant regulations, but I do regard it as unethical. If it was ‘legal’ then there is a chasm between law and morality, and we are in deep trouble as a nation.

This begs the question of how, in a globalised economy, a single nation can apply ethical principals to business, when ethics are ignored throughout much of the rest of the world as companies scramble for profits, and directors enrich themselves, whatever the cost to the wider community?

Maybe we should take a hard look at questions of business ownership. Is it co-incidental that the Co-operative Group, perhaps the most ethically aware large business in the UK, is wholly owned by members? Will there be a new dawn for mutuality?

Short memories are, perhaps, the major barrier. Remember all the mutually owned building societies that members voted to float on the stock market, all through the 1990s? Abbey National was first, in July 1989. Subsequent demutualisations included Alliance & Leicester (April 1997), Halifax (June1997), Northern Rock (October 1997), and Bradford & Bingley (December 2000). They all converted into banks. The demutualised Halifax bought the Birmingham Midshires building society in April 1999. Lloyds TSB purchased the Cheltenham & Gloucester society (August 1995). Bank of Ireland bought Bristol & West (July 1997). The Woolwich demutualised in July 1997 and three years later, in October 2000, was bought by Barclays.

Banco Santander of Spain acquired Abbey in 2004, adding Alliance & Leicester and Bradford & Bingley Savings in 2008 (Bradford & Bingley Mortgages having been nationalised). Northern Rock was nationalised in February 2008. Halifax, which had merged with Bank of Scotland to form HBOS, was a hair’s breadth from collapse when the prime minister engineered a take-over by Lloyds TSB, with the outcome that by March 2009 the state owned about 77% of the newly minted but debt-ridden Lloyds Banking Group.

Demutualisation was a disaster. Building society members were persuaded for a few thousand pounds apiece to relinquish their ownership. It’s all ended in tears, and not one of the demutualised societies remains independent.

Short-term individual gains versus long-term benefits to society? In future can we rise above the Goodwin Factor? That means a universal code of ethics, for bankers as well as for social welfare claimants, and a commitment to mutual ownership strong enough to resist the temptation of a pocket of jingling coins.

Let’s face it, today many of our banks are social welfare claimants. There mustn’t be one rule for them and other, harsher rules for individual citizens who fall on hard times.