The right to keep one’s political affiliation secret is in many eyes a sacred feature of British life. There are households where married couples don’t tell each other how they vote. Those who grew up during the Cold War era remember the years when, in some countries, party membership was a grim prerequisite of a halfway decent life. So it is still a matter of pride that, in Britain, one is never required to discuss one’s political beliefs. Unless, that is, you want to do a certain type of business with the state-controlled Royal Bank of Scotland.
Geoff Robbins, a Cheshire-based computer consultant, recently approached RBS to ask for a credit-card processing facility for his business. After the usual bankers’ inquisition, he was asked a question that knocked him for six: did he have any political affiliation? Did he know any MPs, councillors or mayors? It was a new question, the lady explained to him, which had been introduced soon after the government took control of RBS. She said, in his paraphrase, that ‘political influences may be used for corrupt purposes’.
When I first heard Mr Robbins’s story, it seemed hard to believe. But the more I considered the context of this government’s apparently irrepressible desire to pry into every aspect of out lives, the more it had the awful ring of truth. I decided to investigate further and called RBS, who issued an outright denial. ‘We would never ask such a question, nor would we dream of doing so,’ said its spokeswoman. So Mr Robbins had concocted his story? Unconvinced, I called RBS Streamline, posing as an employee for my mother-in-law’s (real) company and asking for the same service.
Sure enough, the chilling question came at the end: ‘Is she a member of any political party?’ I asked why this was relevant. ‘I presume we ask because there is a high volume of fraud in that sector. Because people who are of that sort of [party political] nature, maybe, are inclined to commit fraud.’ The question, I was told, is ‘thrust upon us by the Financial Services Authority’. The FSA says this is untrue. Banks can check clients’ backgrounds, but no one is required to talk politics.
My mother-in-law, incidentally, fled Soviet-run Czechoslovakia in 1968 to raise a family in countries where such questions are not asked. For those of her generation, all this is deeply sinister — and it doesn’t take a Czech émigré to experience a sense of profound anxiety. ‘It is a worrying sign of the direction this country is taking,’ says Stephen O’Brien, Mr Robbins’s MP. And things are changing fast. A few months ago, after all, the very idea of the state owning most high-street banks would have seemed the stuff of dystopian fantasy. Now it is the reality of British political and commercial life.
My RBS inquisitor was certainly correct on one point: there is plenty of fraud in politics and I don’t mean such tawdry cases as Derek Conway’s expenses or Jacqui Smith’s housing allowance. Take, for example, the highly suspicious way that information was leaked ahead of the bank nationalisations. Or the worrying lack of transparency with which the nationalised banks are run. The Treasury, for example, is unable to say how many billions have been sunk into the banks so far. There is no damage report to consult. No one is keeping tabs on how much taxpayers’ money has gone for ever.
The worlds of banking and politics have collided, and there is plenty of evidence to suggest that we have just witnessed what the financiers call a reverse takeover. The money flows suggest that it is not the taxpayers owning the banks, but the banks who own the taxpayers. Their losses are now our problem. As John Redwood puts it, Britain has become a mammoth bank attached to a struggling medium-sized government. And this, lest we forget, is what David Cameron will inherit.
Mr Brown is — quite literally — not counting the bank debt which he has hung around the neck of taxpayers. He has taken the extraordinary step of rejecting the official national debt measurement and ordering his own one. Banks, meanwhile, have been ordered to protect jobs in politically sensitive parts of the country (HBOS) or overcharge customers in order to repay the government loan (Northern Rock). And crucially, the nation’s savings can now be used to prop up the government simply by obliging banks to buy UK government debt. This is what is even more worryingly Stalinist than impertinent questions about politics.
Where once British banks scoured the planet to find the best investments, they have now become mysteriously converted to the case for UK government gilts — becoming net buyers last month for the first time in a decade. Foreign buyers, meanwhile, have all piled out — which would have triggered a funding crisis if so many British banks had not been suddenly filled with the patriotic spirit. Then we must consider the Bank of England’s extraordinary plan to create £150 billion by simply printing money. Most, it says, will be spent on government debt.
There are Soviet-era leaders who would have killed for the power that Mr Brown now wields. He has the scope now to announce the mother of all pre-election tax cuts — knowing that the Bank of England and the undead banks are programmed to gobble up as much government debt as he can issue. How very convenient. First the taxpayer is forced to bail out the banks, then the banks duly bail out Mr Brown’s government. And they leave that nice Mr Cameron with the bill.
It is easy enough to deal with a bank asking if you are a member of an organised political party (especially if you say ‘No, I’m a Liberal Democrat’). A kindly lady from the RBS sales team called me back and assured me that it didn’t really matter if I were a mere party member. The fraud risk, apparently, concerns only the highest officers of political parties — such as ministers. Here I can fully understand their concern. The terrifying fact is that Gordon Brown and his colleagues are now in charge of most of the British banking sector, and they have only just started to play with it. It is, as Mr Brown says, a ‘wholly new world’.
This article first appeared in the print edition of The Spectator magazine, dated March 14, 2009