It's hard to let go, but RBS needs be returned to market

Let’s get out of this business, and invest in something more worthwhile, writes James Ratcliff.

I was humiliated last night. After dinner in a favourite restaurant I handed my card to the waitress and had the gut-wrenching experience of being told it had been declined.

After a second failed attempt, I fished out another credit card—one I rarely use—typed my dog’s birthday into the card-reader, and crossed my fingers. Fortunately, it worked and we were allowed to leave without having to do the washing up.

Of course, I bank with Natwest, and I ought to have gotten used to this by now. It certainly proves one thing—you really cannot rely on a single bank.

Payments services are not yet a human right, and banks long ago gave up trying to treat their current account holders with respect. The onus is on us not to let them embarrass us in restaurants and encourage people to use premium rate phone lines when we need their help

In this climate, it is no surprise that credit unions—resolutely local lending and savings organisations—are seeing a resurgence

This latest payments fiasco comes the same day that Bank of England governor Mervyn King told us that we, as majority stakeholders, need to cut our losses in Natwest’s parent company RBS.

"RBS is worth less than we thought and we should accept that and get back to finding a way to create a new RBS that could be a major lender to the UK economy,” he said.

This effectively means separating the bank’s retail and investment arms, but the question remains, how do you create a major lender to the UK economy if you’re going to pare it down to its core retail operations? It hasn’t really worked for Northern Rock.

It is a balancing act. RBS clearly needs some fairly drastic pruning—through its Citizens Bank subsidiary we own and run 1,200 bank branches in the US, which seems a bit extravagant for a state-owned lender. And that’s not to mention RBS’s much-derided investment operation. However, a bank does require scale in order to work on anything other than a very local level.

King was clear in his view that this balance is not unachievable. “I do not believe it’s beyond the wit of man to devise a plan to restructure RBS [and] divide it into a healthy well-capitalised bank capable of lending to UK economy,” he said. “It does mean accepting there are activities that are likely to generate continued losses, and need to be separated from the healthy bank – in that sense it would a be a good bank/bad bank split.

"The whole idea of a bank being 82 per cent-owned by the taxpayer, run at arms' length from the government, is a nonsense. It cannot make any sense.

"I think it would be much better to accept that it should have been a temporary period of ownership only, to restructure the bank and put it back. The longer this has gone on the more difficult it has become to return RBS to the market.”

Definitely not a bad idea, let’s get out of this business, and invest in something more worthwhile.

But, while I know it’s never a good idea to throw good money after bad, I wonder if we could stretch to buying the bank a few new computers before we get rid of it. At least then Natwest customers will actually be able to access their money when they need it, and we will have achieved something.

Photograph: Getty Images.

James Ratcliff is Group Editor of  Cards and Payments at VRL Financial News.

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The most terrifying thing about Donald Trump's speech? What he didn't say

No politician uses official speeches to put across their most controversial ideas. But Donald Trump's are not hard to find. 

As Donald Trump took the podium on a cold Washington day to deliver his inauguration speech, the world held its breath. Viewers hunched over televisions or internet streaming services watched Trump mouth “thank you” to the camera, no doubt wondering how he could possibly live up to his deranged late-night Twitter persona. In newsrooms across America, reporters unsure when they might next get access to a president who seems to delight in denying them the right to ask questions got ready to parse his words for any clue as to what was to come. Some, deciding they couldn’t bear to watch, studiously busied themselves with other things.

But when the moment came, Trump’s speech was uncharacteristically professional – at least compared to his previous performances. The fractured, repetitive grammar that marks many of his off-the-cuff statements was missing, and so, too, were most of his most controversial policy ideas.

Trump told the crowd that his presidency would “determine the course of America, and the world, for many, many years to come” before expressing his gratefulness to President Barack Obama and Michelle Obama for their “gracious aid” during the transition. “They have been magnificent," Trump said, before leading applause of thanks from the crowd.

If this opening was innocent enough, however, it all changed in the next breath. The new president moved quickly to the “historic movement”, “the likes of which the world has never seen before”, that elected him President. Following the small-state rhetoric of his campaign, Trump promised to take power from the “establishment” and restore it to the American people. “This moment," he told them, “Is your moment. It belongs to you.”

A good deal of the speech was given over to re-iterating his nationalist positions while also making repeated references to the key issues – “Islamic terrorism” and families – that remain points of commonality within the fractured Republican GOP.

The loss of business to overseas producers was blamed for “destroying our jobs”. “Protection," Trump said, “Will lead to great strength." He promised to end what he called the “American carnage” caused by drugs and crime.

“From this day forward," Trump said, “It’s going to be only America first."

There was plenty in the speech, then, that should worry viewers, particularly if you read Trump’s promises to make America “unstoppable” so it can “win” again in light of his recent tweets about China

But it was the things Trump didn't mention that should worry us most. Trump, we know, doesn’t use official channels to communicate his most troubling ideas. From bizarre television interviews to his upsetting and offensive rallies and, of course, the infamous tweets, the new President is inclined to fling his thoughts into the world as and when he sees fit, not on the occasions when he’s required to address the nation (see, also, his anodyne acceptance speech).

It’s important to remember that Trump’s administration wins when it makes itself seem as innocent as possible. During the speech, I was reminded of my colleague Helen Lewis’ recent thoughts on the “gaslighter-in-chief”, reflecting on Trump’s lying claim that he never mocked a disabled reporter. “Now we can see," she wrote, “A false narrative being built in real time, tweet by tweet."

Saying things that are untrue isn’t the only way of lying – it is also possible to lie by omission.

There has been much discussion as to whether Trump will soften after he becomes president. All the things this speech did not mention were designed to keep us guessing about many of the President’s most controversial promises.

Trump did not mention his proposed ban on Muslims entering the US, nor the wall he insists he will erect between America and Mexico (which he maintains the latter will pay for). He maintained a polite coolness towards the former President and avoiding any discussion of alleged cuts to anti-domestic violence programs and abortion regulations. Why? Trump wanted to leave viewers unsure as to whether he actually intends to carry through on his election rhetoric.

To understand what Trump is capable of, therefore, it is best not to look to his speeches on a global stage, but to the promises he makes to his allies. So when the President’s personal website still insists he will build a wall, end catch-and-release, suspend immigration from “terror-prone regions” “where adequate screening cannot occur”; when, despite saying he understands only 3 per cent of Planned Parenthood services relate to abortion and that “millions” of women are helped by their cancer screening, he plans to defund Planned Parenthood; when the president says he will remove gun-free zones around schools “on his first day” - believe him.  

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland