Anthony Hilton: Why should people clean up these messes when they’ll be pilloried for it?

 

The travel company, Thomas Cook, announced a dramatic surge in profits on Thursday to suggest that it is finally recovering from its near-death experience of a couple of years ago. That was when it was in such a mess it should really have been allowed to go bust.

The only reason it didn’t is because its bankers thought it was too important to be allowed to fail so they put their own heads on the line to create a rescue package to save it – one which had to deal with the major risk that they were simply pouring good money after bad. It is, however, in the nature of these things that there was almost no publicity given to the bankers behind  the move.

Two years on the big banking story is the suite of allegations that Royal Bank of Scotland took advantage of financially weakened companies to force them into bankruptcy and grab their assets, when, with a bit more support, they could have survived. What is really interesting though is that these allegations centre round the RBS division run by Derek Sach. This is the very same man who put his head on the line to save Thomas Cook.

I have lunched with Derek Sach a few times so know him a little. I would judge that he is not the financial sector’s answer to Mother Teresa but neither is he the devil incarnate. And the allegations – even if they subsequently turn out to have some truth – need to be seen in the context of what he had to do.

 He has been one of the leaders in the gigantic task of sorting out the bank’s bad loans and to salvage what he could. As taxpayers and majority owners of the bank, we should arguably celebrate in his success, not hang him out to dry. On his watch the toxic (or what they prefer to call non-core) loans within RBS have been cut from £258bn to around £40bn.

We should pause to think of the financial burden lifted from the bank and thus the taxpayer by this effort. That £218m would be enough to build HST2 from London to Inverness, not just Birmingham. It would get us 50 aircraft carriers, not two. It would pay the entire NHS cost for almost two years or defence spending or education for five years. In a sensible country that would earn him a knighthood.

Clearly he is not going to get that but at the very least we should keep a sense of proportion. His department might well have been a bit brutal at times – it is hard to see how it could be otherwise given the scale of the task in hand. Innocent people did possibly get hurt and some good companies which might have been saved possibly went to the wall. But this was the biggest economic and financial bust since the 1930s and even then it was not all one way as Thomas Cook and others prove. Given the size of the mess that had to be cleared up the surprise ought to be that there has been so little collateral damage.

I would hope Sach does not end up with his head stuck on a pole though once a media frenzy erupts that tends to be the way we do things in this country. But if he does become the scapegoat – the latest in a long stream at RBS one might add – we really should not be surprised if in future no talented private sector people are willing to come out of the shadows to take on the next big public sector clean-up job.

It is not intelligent to clamp down on foreign students

 When a country is struggling to pay its way in the world an intelligent government puts weight behind the things we are good at so they can grow as much as possible. We have such an advantage in higher education and run second only to the United States in our ability to attract students from overseas to study here.

It is good business. Overseas students pay more than UK nationals so keep costs down for them and obviously have additionally to pay their living costs. The Institute for Public Policy Research estimated this week that this is worth £13bn a year to the economy and supports 70,000 jobs. It would take an awful lot of SMEs to generate a similar amount of exports.

David Willetts and the Department for Business Innovation and Skills recognise this and have said he wants to boost these student numbers by a further fifth over the next five years. Unfortunately this cuts no ice with his colleagues in the Tory hierarchy, who are is stepping up the anti-immigrant rhetoric.

The result, the IPPR reckons, is that overseas student numbers have fallen by a third under this government, not raised as the education minister would like. So not only is this iniquitous policy destroying our reputation as a civilised country and undercutting the long-term links with those countries fostered when the students return home with their degrees, it is also costing around £4bn a year in lost income.

The worst public firm board? You can bank on the answer

Tuesday evening I found myself at a dinner in the wonderful surroundings of the  National Portrait Gallery for clients and friends of Tulchan, one of the leading City public relations firms. Conversation at my table took an interesting twist when the assembled past and present captains of industry, bankers and Government ministers started comparing notes about which was the worst public company board they ever sat on.

Interestingly the same name came up from several of them independently

as standing out above all the others for its sheer dysfunctionality. Are you surprised it was a bank?

Arts and Entertainment
The first film introduced Daniel Radcliffe to our screens, pictured here as he prepares to board the train to Hogwarts for the first time.
booksHow reading Harry Potter helps children grow up to be gay-friendly
Sport
Frank Lampard will pass Billy Wright and equal Bobby Charton’s caps tally of 106 caps against
sportFormer Chelsea midfielder in Etihad stopgap before New York contract
Arts and Entertainment
A scene from Aladdin is performed at the Tony Awards in New York in June
theatreBrit producer Lythgoe makes kids' musical comedy a Los Angeles hit
Sport
Usain Bolt of Jamaica smiles and shakes hands with a competitor after Jamaica won their first heat in the men's 4x100m relay
sport
PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
News
i100
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
Kenny Ireland, pictured in 2010.
peopleBenidorm actor was just 68
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Financial Analyst - Forecasting - Yorkshire

£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...

Business Architect - Bristol - £500 per day

£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices