Immorality alive and well in banking sector

Standing up for poor people and against poverty was something Cardinal Tom Winning did with aplomb.  He was always at his most sure-footed when castigating the greedy and the uber-wealthy for not paying their fair share.  Somewhat belatedly, Cardinal Keith O’Brien has realised this is safe – or at least, safer – territory from where to make forays into public policy.

“Don’t just protect your very rich colleagues in the financial industry, consider the moral obligation to help the poor of our country” was his call to the Prime Minister, David Cameron.  The remarks were made as part of an appeal to introduce the Tobin tax which taxes financial transactions and redistributes the income to some of the poorest here and abroad.  His timing was prescient.

Yesterday, the Sunday Times published its annual rich list.  Scotland now has five billionaires and 74 Scots joined the rich list this year, compared to 70 last year, highlighting how far and fast the gap between rich and poor has grown and is growing.  Inequality is rampant and it’s sobering to realise that the top 100 stops at £52 million:  there are many thousands more worth seven and eight figure sums.

It’s not just individual behaviour that is immoral:  the culture of greed is forged and reinforced in many corporate spheres and institutions.  The David and Goliath battle heading for the UK Supreme Court involving the Lloyds TSB Foundation for Scotland and Lloyds Banking Group points this up in sharp relief.  The foundation is a charitable grant-making trust which, through a legally binding covenant arrangement with the TSB and then the Lloyds TSB group, is entitled to a percentage share of the bank’s gross profits to be redistributed to good causes.  Over the years, this money has found its way into our poorest communities, mitigating against the symptoms of poverty while also being applied to finding some solutions.  Though its funding priorities and actions, it grasps the need to redistribute its wealth to the least well-off, working hard at reaching those most disadvantaged communities, individuals and organisations.

Crucially, the Foundation is independent of its financier, with its own trustees.  It decides what it will fund, when, how much and to whom.  The merger of Lloyds TSB and HBOS at the height of the financial crisis – in order to save the latter from failure – created the giant that is Lloyds Banking Group.  Little did we taxpayers who own 40% of the banking group realise that we had created a monster too.

It didn’t like that it couldn’t channel this money where it wanted to.  It didn’t see why it should continue to pay over a share of gross profits, preferring instead to provide funding after tax.  The difference?  Well, pre-tax the Foundation was entitled to receive millions;  post-tax and other liabilities, its grant amounted to under £40,000.  It didn’t like that it could not influence the funding priorities nor have its own people on the Board of the Foundation.  In short, it wanted control and to exert its influence.  And it wanted to rein in how much of its profit went to charities:  under the old HBOS Foundation, nearly £10 million annually was disbursed largely across Scotland and Yorkshire.  Since the creation of the bigger group, a new Bank of Scotland Foundation has been established and is given £1million every year to spend in Scotland.  Paltry in comparison.

The Board of the Lloyds TSB Foundation in Scotland has refused to cave into the bank’s bullying.  It took Goliath on and won on appeal to the Court of Session.  Has the bank – the bank which last year paid out £2.5 million in pay and perks to its top executive and has had to set aside £3.2 billion in anticipation of claims against it for mis-selling customers payment protection insurance – decided to accept its medicine?

No.  It is appealing to the Supreme Court.  It is costing millions in legal fees and meanwhile, the £3.5 million due to the Foundation is frozen.  The case has now dragged on three years, three years in which the Foundation could have disbursed that money to small charities all across Scotland, helping our communities get through the current hard times.

As a result of the banking group’s actions, the Foundation finds itself in limbo.  Its Chief Executive, Mary Craig, suggests that questions must now be asked “as to why a major institution of its size, owned in part by the taxpayer, feels the need to pursue a charitable organisation in this way. Three judges, including the Lord President, Lord Hamilton, ruled unequivocally in favour of the Foundation at the end of 2011….If we don’t have that income, we will be limited in what we can give by way of grants for the foreseeable future.“

And she urges the bankers “to show their support for Scotland’s communities by withdrawing their appeal. I would also urge others to ask what lies behind this decision which is, at best, misguided and, at worst, ill-judged, oppressive and unnecessary.”

Will they listen?  I doubt it.  As Cardinal O’Brien’s intervention this weekend makes clear, there is immorality operating at the heart of our political and economic culture.  Lloyds Banking Group’s actions against the Lloyds TSB Foundation – and by default, against Scottish charities and their beneficiaries – demonstrates this in spades.

Alex Salmond suggested that Cardinal Winning would be remembered “as a fearless fighter for the poor and dispossessed”.  We need more such fighters.  To take on the might of the financial institutions, to challenge the wealthy to pay their dues, to insist upon fairness.

We need more like Mary Craig and the Lloyds TSB Foundation for Scotland.  And far fewer like Lloyds Banking Group.

 

 

Scotsman’s shocking distortion of sleaze scandal

Another government, another sleaze scandal.

And we all roll our eyes wearily and say we expected no better from the Millionaires Club who just gave their wealthy pals a big tax boost.

This is a scandal created and set in Toryland.  £250k for three courses with Dave and Sam.  Nice to see the PM’s wife thrown in to seal the deal.

So how come the headline screaming from pages 4 and 5 of today’s Scotsman is “Sleaze:  dinner with SamCam and “mad Scotsman” Salmond“?  It is a gross distortion of what the report and story is actually about.

This headline suggests that the sleaze scandal involved the First Minister directly, that somehow Alex Salmond was complicit in this, that somehow – inexplicably – he had cut a deal with Cameron to get on this nice little earner.  The mind boggles, frankly.

But it is utterly wrong.  How Scotland’s First Minister ended up embroiled in this saga is because Peter Cruddas, the Conservatives’ former co-Treasurer, who was caught in the sting offering access to the Prime Minister in return for a six figure sum, was trying to impress his erstwhile donor.  In order to prove his credentials and his ability to mix it with the toffs at the top of the Tory party, Cruddas was caught on camera joshing that he and the Prime Minister had “jokingly referred” to Alex Salmond as “the mad Scotsman“.

Rightly, the FM has written to the PM suggesting that he explain himself.  Such behaviour and name-calling is unbecoming – or at least, getting found out is what is problematic.  This throwaway remark might just get David Cameron into a whole lot more bother, and rightly so.  If he thought of trying to make this one go away quickly, he reckoned without the tenacity of an SNP Government which never knowingly undersold the opportunity to remind the Scots of the awfulness of thon yins at Westminster.  Frankly, if this is how they think and talk about our First Minister in private, then they deserve all they get.

But it is the fact that editorially, the Scotsman chose to use the opportunity of Alex Salmond being mentioned in dispatches to attempt to give the impression that this episode of sleaze involved the First Minister.  How sly.

Ultimately, no party has completely clean hands on the matter of political donations.  The SNP had its knuckles rapped for auctioning dinner at Holyrood with the FM as a fundraiser.  A seemingly innocuous little ruse to raise money created the perception rather than the reality of sleaze.  In truth, only the most ardent SNP supporter would see this as something worth parting with hard cash for.  In years of relying utterly on private donations, this is the only episode to blot the SNP’s copybook.  Labour, Lib Dems and the Conservatives should be so lucky.

Despite vigorous attempts by them – especially Labour – to join the dots between Brian Souter’s largesse and his business and personal interests, they have failed.  Simply, because they cannot be joined.  What the muck-rakers have failed to realise is that Souter was a donor and supporter long before the SNP became fashionable.  The sneering at his offer in the 2011 election campaign to donate half a million pounds if ordinary members could match it pound for pound ignored the fact that match it they did.  And then some.

The truth about SNP funding is much more prosaic:  there are very few large cash donors and the success of its fundraising efforts in recent years owes much to making a virtue out of necessity.  When no one would touch the party with a bargepole, it relied solely on Obama-esque fundraising, gathering in lots of little amounts from its members.  Long before it became fashionable, small schemes spread throughout the party were initiated to spread the pain and maximise the gain.

Having never had to rely on big sums, it learned to make do with lots of little amounts instead – unlike the other parties, who have struggled when big funding streams have dried up.  Up to their necks in hock to their overdrafts, the major Unionist parties have become ever more desperate in their need to raise the readies.  Hence, this latest imbroglio.  Unless and until a shift is made to public funding of political parties, such scandals will continue to dog the image of politics on these islands.  And democracy will suffer.

But none of this excuses nor justifies the shocking attempt to embroil the First Minister in this episode.  The fact that the headline has disappeared from the online version of the Scotsman and been replaced with a more appropriate and indeed, truthful treatment speaks volumes.

No matter, the damage has been done.  A dwindling readership the Scotsman might have but still, over 30,000 people in Scotland opened their newspaper today to be given the impression that the First Minister was involved and that the SNP was also offering cash for access to major donors.

Nothing could be further from the truth.  Here’s hoping that appropriate missives have been dispatched from the party’s lawyers.

Turning the constitutional debate upside down

Anyone who disappeared to foreign climes at the start of half-term last weekend might be forgiven for thinking they’ve arrived back in a different country.

This time last week, the Conservatives and Labour parties were busy warbling their way through a No pasaran type ditty in relation to the constitutional debate.  This far and no further, or to quote the Scottish Conservative leader, Ruth Davidson MSP, the Scotland bill (which may or may not still be wending its way through Westminster) represents a “line in the sand”.  The inference is, of course, that the Tories are not prepared to devolve anything more to Scotland than what is already in that bill.

Indeed, last weekend, we were still labouring under the misapprehension that Ms Davidson and her Scottish Labour counterpart, Johann Lamont MSP, were leading the constitutional debate for their respective parties.

That was until Mr Cameron ventured North and delivered a speech which has fair set the heather alight.  Suddenly, the debate has been turned on its head.  Suddenly, the Prime Minister is prepared to consider giving as yet undefined and unstated powers to Scotland, continuing the process of devolution.  Assembled hacks gasped and gushed.

And now, former Chancellor of the Exchequer, Alistair Darling MP, has suggested that Scotland should become responsible for raising money as well as spending it.  Apparently, without his tongue in his cheek, Mr Darling reckoned devolving income tax would be pretty easy to do.  Now that he wants it to happen of course;  it was a different story, oh about a fortnight ago.

They might deny it, but this smacks of a pincer movement, orchestrated and apparently being led at UK level.  Which washes the Scottish leaders up on a beach some way beyond the line in the sand that was previously drawn.  I’m sure they’re wondering, like the rest of us, what kind of freak wave it was that caused them to land there.

It’s good that the debate has shifted so far and so quickly.  For one thing, the Unionist parties have woken up to the fact that the Scottish people want more, much more than they were initially offering.  Moreover, given the tenor and tone of Cameron’s speech and of the interventions Alistair Darling has made in recent months on a range of issues, at last, we have sparring partners who might give the First Minister a run for his money.

But where does that leave the Scottish Conservative and Labour leaders?  Putatively in charge of anti-independence campaigns for their own parties but facing the prospect of marauding alpha males marking their territory whenever the fancy takes them.  That’s not a good place to be and both parties’ Spring conferences will now be much more interesting as a result.

Of course, nice speeches and interviews promising jam tomorrow are all very well but they’re not likely to carry the day.  According to those nice men from the Union, we can have more control over some things in our life but not just yet.  Not until we vote no to independence, then they’ll be more than happy to have a think about it and give us some more powers.

Problem is, can we trust them?  After all, they’ve got form.  Some of us have long enough memories to remember empty promises before.  And even if we don’t, well every journalist in the land has filled in the gaps for us in the last few days.  1979, Lord Home.  Vote against home rule and we’ll give you something better.  Pah.

In any event, if this lot really meant it, couldn’t they have done it before now?  After all, Scottish people have been indicating for a few years that they’d like more please.  To some extent, it’s ancient history.  We are where we are, this week at least.  Which is pretty confusing for some.  Not least the SNP.

This time last week, they were the ones on the front foot.  Pushing against the intransigence of the coalition UK Government on procedural matters, subtly (and at times, not so subtly) hinting that “they” were being anti-Scottish, refusing to allow “us” to have this debate and referendum on “our” terms.  But in the topsy-turvy world we now appear to inhabit, that has changed.  What, after all, is anti-Scottish about offering the people what it is they say they want?  We’re listening to you is the message, “we’re” the ones who can deliver what you want, not “them”.  Suddenly, who is “us” and “them” is not quite so clear.

And here’s another neat twist.  For weeks now, the SNP has been bombarded with questions from all quarters.  Tell us about independence they cry, what does it mean?  Will we still be able to buy stuff?  Will they let us in or throw us out of Europe?  Will there still be an army?  What about Queenie?  Some of us actually want to know about more prosaic, everyday stuff, that, like, matters, but we’ll pass on that for now.

But doesn’t it sound familiar?  Who did we hear asking for some detail all of a sudden?  Ah yes, that would be the First Minister.  It’s not good enough to proffer more devolution without spelling out what that consists of.  And he managed to utter this with absolutely no hint of irony whatsoever.

See?  Who’d have thought that in a few short days, we would have travelled up and down and all around in the debate.  But at least, we do now have a debate.  The status quo is no longer what it was. The choice – when we get there – is undoubtedly going to be between some level of increased devolution and independence.

Devo plus, devo max, indie lite, full fat indy.  These are the options before us:  all we need to know now is what any of them actually means.