LETTER FROM SCOTLAND 14th June 2013

Royal Bank of Scotland Could it be broken up?

Royal Bank of Scotland HQ

We can now allow ourselves the first “hurrah” since the start of the bankers’ recession in 2008. Unemployment in Scotland has fallen significantly, to 7.1 per cent, and youth unemployment has come down from 25 per cent to 15 per cent. The number of people in work has also risen sharply, almost back to its level before the crash. There are more entrepreneurs than ever before (7 per cent of workers) and we’ve had a good year for foreign investment.

Unemployment has fallen
Unemployment has fallen

But we can’t allow ourselves three cheers, or even two, because wages have taken their biggest fall ever (6 per cent since 2009) and half of all new jobs are part-time. It means that high street spending is weak. Exports and manufacturing are still in decline. The Westminster government is only half way through its job-cutting “austerity” programme and its second-thought investment programme will take years to kick in.

In short, it looks like we are going to have to get used to low growth for years ahead. It seems, though, that people are accepting that sobering thought and are grateful for any part-time work they can get. The young chap in the flat below me has just got a part-time job in a super-market and is delighted. The so-called “participation rate” in the jobs market is at its highest level for 20 years.

Stephen Hester
Stephen Hester
We learnt this week that the man who has helped reach this windy corner, Stephen Hester, is leaving his post as chief executive of the Royal Bank of Scotland. He’s cleaned out the byre at the ruined bank – sold off subsidiaries, got rid of 30,000 staff, paid all those fines for bad practice and cut the losses to a mere £5bn last year. This quiet man is going quietly, forced out it seems by his largest shareholder, the Chancellor of the Exchequer, who wants to see the bank privatised sooner than Hester thinks is wise and certainly before the next election.

But let’s not feel sorry for this top banker. He is leaving with a £5m pay- off which should mean he can keep his horse and his Oxfordshire estate until he finds a new job.

Camilla has a new job already. The Duchess of Rothesay was installed as the Chancellor of my old university Aberdeen, the first female ever to hold that fine office and, to my surprise, the first royal. Not bad for a girl who left school at 16, as she herself remarked. Camilla is also to make an appearance in that other fine educational establishment, The Beaneo, along with Prince Charles. They will be keeping the Bash Street Kids up to date on the joys of reading books and eating healthy food. I expect they will be pelted with Dundee bridies.

SFL LogoAlso enjoying their meat pies this week are Scotland’s 42 top football clubs. After years of impenetrable infighting, they are apparently all agreed on coming together into one football league. The new Scottish Professional Football League will run the whole sport, from the Premier division of 12 clubs to the three other divisions of 10 clubs each. It will mean the end of the 123-year old SFL, the Scottish Football League, the second oldest league in the world.

Clearly something was wrong with the old structure with clubs falling into the financial bog almost every week. Last week, it was Dunfermline, this week it’s Hearts which has just put all its first team players up for sale.

I’m surprised none of these earth-shattering events featured at question time in the Scottish Parliament. But what we got instead was Johann Lamont’s best joke of the year. What has the UK ever done for us, she asked, except give us the NHS, the sterling currency, membership of the EU and NATO, and a welfare and pensions system, all of which Alex Salmond wants to keep ? Then she added, in what looked like an off-the-cuff remark, “I think his own back benchers should form a new campaign called “the SNP for independence.”

Gannet on Bass Rock
Gannet on Bass Rock
The SNP members screamed “like a cliff of seagulls” as Donald Dewar once called them. And that reminds me that just a few days ago I took a most amazing boat trip out to the Bass Rock in the Firth of Forth to see the colony of 150,000 gannets There were all calling out to their mates as they sat with one foot on their eggs – as gannets do, and metaphorically as humans do when in football stadiums or parliaments.

No matter what fun we’ve had, I cannot let this week pass without mentioning the very graceful death of Iain Banks, reckoned to be one of our greatest modern authors. He died quickly and without complaint from gall bladder cancer at the age of 59. To my shame I have not read any of his 29 novels, which include The Crow Road and The Wasp Factory and a string of science fiction stories. I don’t usually read novels unless they are classics. But, from all accounts, these are modern classics and should be read by everyone who loves life, as Iain Banks surely did.