Is it a case of one rule for bankers?
Dear Sir, — Many readers will recall that late last year Royal Bank of Scotland refused to extend credit to Thomas Cook, a large holiday business struggling to pay off debt and as a result it failed. This failure resulted in the largest repatriation of people in peacetime at some cost to taxpayers and thousands of UK job losses.
Given that Royal Bank of Scotland was bailed out by Labour under Gordon Brown to the tune of £50bn in 2009 it is somewhat ironic that the same bank refused to extend a relatively modest line of credit to Thomas Cook in order to help it stay in business and restructure its debts.
My first question, what kind of a Labour party bails out banks? Second question, when does this Conservative Government expect the taxpayers’ £45bn to be repaid by Royal Bank of Scotland? To add insult to injury, while RBS has been under Conservative control, it has paid bonuses to managers, topped up the gold-plated employee pension scheme and turned a blind eye to what MPs described in January 2019 as a whitewash of the treatment of business customers.
Oh and if you accidentally overdraw with RBS they charge customers 39% interest! Word now reaches me via The Financial Times that the regional airline Flybe is seeking £100m of Government support to rescue it. Of course this time it’s different because the owners/controllers of Flybe are Sir Richard Branson and millionaire hedge fund manager Mr Farrell who both clearly need your money, dear reader.
Hedge fund manager Mr Farrell is also an Old Etonian, patron of the arts, on friendly terms with the co-chairman of the Conservative Party Ben Elliot and a nephew of the Duchess of Cornwall.
Will it be once again one rule for bankers and hedge fund managers but quite another set for readers burdened with UK taxes, debts and overdrafts? — Yours faithfully,
Why yes: it is one rule for bankers and another set for readers. Flybe was indeed bailed out. In its (weak) defence the Government said the deal was not about protecting the airline but distant places connected to the rest of Britain: Flybe is the main operator at smaller and more isolated airports, operating 95% of all scheduled services from Southampton and 80% from Belfast City airport and Exeter.
Flybe concentrated on less busy and less profitable routes, which as The Economist put it, “turned out to be, unsurprisingly, unprofitable”. The Government has allowed Flybe to defer payment of its bill for Air Passenger Duty for an unspecified period, boosting its cashflow by up to around £100m, said The Economist. Willie Walsh, head of British Airways, called it “a blatant misuse of public funds”.