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Terry Murden's Business Blog: The English-Scottish debate over Dunfermline's fate misses the point

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Published Date: 31 March 2009
THE conspiracy theorists have added some colour to the controversy over Dunfermline Building Society's merger with Nationwide. But they're coming at it from opposite sides and from a flawed perspective.
First there are the nationalists' claims that this is all part of some grand plan by the English government (run by Scots] to undermine every Scottish institution and thereby the case for independence. It would be plausible if it were not so laughable. Do they really think Gordon Brown and Alistair Darling have such a death wish for their own parliamentary prospects and that they really don't care a fig for anyone working and living in Scotland?

Then there is the counter-argument: that the merger with Nationwide, far from being an English get-up, is actually a scheme devised to protect Scottish jobs at the expense of English taxpayers. And who's behind this dastardly plan? Brown and Darling, of course.

Those putting forward this latter scenario believe it replicates the Lloyds-HBOS merger in which the documents stated that the "management focus is to keep jobs in Scotland".

Under the terms of the Nationwide-Dunfermline deal, the toxic assets are taken on to the taxpayers' growing portfolio of unwanted goods while the branch jobs and the good bits of the loan book will pass to the new owner.

Inconveniently for those who see this as a pro-Scottish answer, there are no guarantees for the jobs at Dunfermline's head office staff. It rather weakens the argument.

The plain truth is that the deal was seen as the best solution for salvaging most of a society that would otherwise close. Just as with RBS and HBOS, over-ambitious management have been rescued by the taxpayer. It has no more to do with English-Scottish politics than the rescue of Bradford & Bingley, Northern Rock or Leeds United.

Dunfermlime's problems are symptomatic of a wider problem, not least its inability to keep pace with rivals such as Northern Rock and Halifax who were offering skinny margins. That helped encourage management to seek other forms of revenue, and booming commercial property values in the early part of this decade looked a sure-fire winner.

When commercial property bombed and a bungled IT system wiped out profits - as revealed in Scotland on Sunday last year - the writing was on the wall.

The inquest into the fate of Dunfermline has begun but it has to proceed without the silly political backbiting that misses the point.

Terry Murden is Business and City Editor of Scotland on Sunday. To read his other Business Club blogs click here

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  • Last Updated: 31 March 2009 12:14 PM
  • Source: scotsman.com
  • Location: Scotland
  • Related Topics: Terry Murden , Weblogs
 
1

Sedov,

31/03/2009 16:00:30
A good article which will probably be wasted on the conspiracy anoraks who frequent these posts.

However, I would strongly suggest that the writing is on the wall for the system that created the mess that we are now in and which was brilliantly forecast by Karl Marx in the Communist Manifesto.

The one thing that the crisis has done is to raise the issues of control and wealth with the masses of people that the left could never do.

So we have now analysed the problem in capitalist society, the trick is to change it.
2

Faux Cul,

31/03/2009 18:23:35
Do they really think Gordon Brown and Alistair Darling have such a death wish for their own parliamentary prospects and that they really don't care a fig for anyone working and living in Scotland?

Do you really think that Brown is sane?

He will lay waste to Scotland if it bought him votes in England and guaranteed his further election,

He is a clunking Stalinist and the rest of the aparatchiks around the Cabonet table have long since realised that the game is up.

So they are just filling their seaboots before receiving the Bog Boot.

 

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