Julian Knight: Who to blame for the cuts? Look in the mirror

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The Independent Online

'It's all the banks' fault." This is a familiar refrain trotted out by politicians, journalists and many men or women in the street.

It was in repeated use this week with the news of the true cost to the Irish people of bailing out Anglo Irish Bank. Perhaps as much as a decade of austerity lies ahead for the Irish as they desperately try to get their budget to balance, and even that may not be enough. I have long thought that the Irish government deserves a lot of credit for having faced up to its problems earlier than most (whereas the Portuguese and the Spanish and Ed Balls in the Labour Party are still deficit deniers). History will be kind to the present Irish government, although not to the electorate.

But what about these folk narratives, this lazy journalese and easy political point scoring, that it's "all the bank's fault"? First, thanks to having the economies of scale that 60 million people bring, we won't suffer anywhere near as much as the Irish, but let's get something straight. The reason Ireland and Britain are in such a dire mess is because vast numbers of us chose to take on debts and mortgages that left us badly exposed in a recession.

OK, lenders sent us "pre-approved" loans, and credit cards made it ridiculously easy to borrow to buy property. Banks gave us big overdraft facilities, but we didn't have to use them. We didn't have to join in the property bubble – we didn't need to take out an interest-free mortgage, or a consolidation loan or a second mortgage. And, as for the last government, it didn't need to invent its bogus fiscal "golden rule" to justify spending far more than we were earning as a country. Collectively, we had a choice – and that goes for the UK, Ireland, America, Iceland and wherever credit got out of control.

And many of us, I'm afraid, told lies to get loans. CoreLogic, a fraud consultancy, estimated last week that a staggering two thirds of mortgage defaulters in the second quarter of 2010 gave wrong information on their mortgage applications. Potentially that's a criminal offence.

I'm not saying banks or bankers are blameless souls – some of the marketing was desperately irresponsible – but really, if you're looking for someone to blame for the cuts and our problems, look in the mirror, or at your neighbour. This self-pitying narrative being built up over what happened does no one any favours, and is, frankly, infantile.

It's a poor show, Santander

If you want to get angry at the banks, do it over complaints handling. The Financial Services Authority revealed last week that 7,000 complaints a day are flooding into the banks.

Lloyds tops the league, but that's because it has the greatest number of current accounts. Where the figures get more interesting is when you look at the ratio of complaints to customers and the clear-up rate within eight weeks. And I'm afraid Spanish-owned Santander comes out appallingly in both instances. No fewer than 216,158 complaints were received by Santander in the first half of 2010, and it managed to clear up just 46 per cent in eight weeks. This is truly abysmal.

Since Santander took over Abbey it has been widely seen as having done a good job turning around a basket-case business, and picking up lots of new customers with attractive current and savings-account offers.

However, the FSA figures show that in the dash for the new business, Santander has forgotten the fundamentals of customer service. The bank's director of service quality and complaints, Steve Williams (clearly a busy man), said in true PR fashion: "We are pleased the volume of complaints has decreased from the same time last year but know we need to do more. Improving service quality remains a priority."

What Mr Williams needs is the Santander directors to put some substantial resources into customer service – particularly with the integration of millions of Alliance & Leicester and RBS customers. It's pointless grabbing new business if you treat people so poorly.

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