A fig leaf which ought to fall

I’ve had my share of rejections in my career, but there are a handful of jobs I’ve applied for just to see what the rejection letter looked like. One of them was in answer to an ad for non-executive directors of UK Financial Investments.

UKFI was set up by Chancellor Alistair Darling to hold and administer the Government’s stakes in failed banks -– Northern Rock, Lloyds and Royal Bank of Scotland. I thought I had something to offer: I knew a bit about the financing of small businesses (I was, and still am, an adviser to the Department of Business) and Lloyds and RBS dominated the SME lending market.

I had never been a banker, but I had worked in financial services and I knew my way around Government. I lived in Scotland, which I thought might be relevant given the strong presence of RBS and HBOS north of the border. The job was attractive. Non-execs were being paid £100k a year -– not bad for part-time work.

The rejection came by return of post. My application didn’t even reach the Treasury, but was weeded out by a headhunting company. They were only considering candidates with fund management experience, they told me.

I was outraged. Fund managers had helped get us into this mess. It was they who voted through Fred Goodwin’s disastrous acquisition of ABN Amro and voted to back the Lloyds takeover of HBOS, which necessitated a bail out. After a good dinner and a few glasses of wine I wrote an indignant letter to the Financial Times and pressed “send.” I had a weekend of apprehension, but they published it.

Now the Parliamentary Commission on Banking Standards has called UKFI a “fig leaf” to cover political interference by the Chancellor. It serves no useful purpose and ought to be closed down.

That’s not entirely an accurate assessment. George Osborne’s meddling has been so blatant – most recently with the removal of Stephen Hester from RBS – that he hasn’t even bothered to blame UKFI. But it is true that it has done nothing – and can do nothing. It has no power and all decisions over these banks will always be intensely political.

No-one has ever answered the question: what benefit is it to the UK taxpayer? Meanwhile the City Great and Good who did get the non-exec jobs go on collecting their fat fees. Why do we put up with this?