Voters angry with bankers in British home of RBS

25th April 2010, Comments 0 comments

As home to the Royal Bank of Scotland (RBS), Edinburgh was stunned by its fall from grace in the credit crunch -- and its voters are in no mood to forgive and forget at Britain's general election.

Scotland's capital is Britain's main financial services hub outside London and the sector is the city's biggest employer after the state, but residents' sense of pride in the success of its banks is now badly bruised.

Even finance minister Alistair Darling, who had a House of Commons majority of over 17,000 in his seat in the city at the last parliamentary polls in 2005, is now facing a battle to win again, albeit after a redrawing of boundaries.

"People look up at the banks, they look at these buildings and have a wry smile at them thinking, you weren't so great after all," said Neil Nelson, 29.

"I do think maybe a little bit of a swing of power might help in a certain way -- it might get some new faces in, some new ways of thinking that move away from the whole fat cat greediness of the banks".

All three main parties include pledges to crack down on the activities of banks in their manifestos for the May 6 poll, when Prime Minister Gordon Brown's Labour government looks likely to be voted out.

Banking in Edinburgh dates back to 1695, when the Bank of Scotland was founded, and the city is studded with historic stone buildings and modern glass-fronted offices which highlight this pedigree.

But RBS, Edinburgh's third biggest employer, has been tainted by the excesses linked to the crisis, drawing criticism for paying bonuses to staff even though it is now 84 percent state-owned.

Last year, the Edinburgh home of ex-RBS boss Fred Goodwin, nicknamed "Fred The Shred", was targeted by vandals who smashed windows and damaged his Mercedes car amid a row over the size of his pension.

Edinburgh's other main bank, the Bank of Scotland, was latterly part of HBOS -- taken over by Lloyds TSB in an emergency, government-brokered deal in 2008. Bank of Scotland branches in the city now fly Lloyds flags.

Locals enjoying the spring sun outside 18th century Dundas House -- one of RBS's flagship Edinburgh buildings which highlights why the city is nicknamed "the Athens of the north" -- said the mood towards bankers had changed since.

"I don't think anybody's happy with them," said Andrew Ford, 69, while his wife Betty chipped in: "They keep giving themselves big bonuses and big pensions and it's no' their money to do that."

They said the issue of bankers' behaviour would weigh on their minds as they voted. "He's had a tough time but I think we're needing a change," Betty Ford said of Scotsman Brown.

The city's economy has been hit by the credit crunch -- the number of people claiming unemployment benefit is up 30 percent on the same time last year, although the overall rate, 3.8 percent, is well below the Scottish average.

Edinburgh Chamber of Commerce spokesman Graham Bell said the impact on sectors like construction has been more damaging than the "shrinkage" of financial services, where employees are often skilled and easily re-employable.

"Edinburgh has many more aspects to its financial services industry than banking and therefore the city as a whole has not been hit nearly as badly as was predicted at the outset," he said.

But a respected group of economists from auditors Ernst and Young warned in November that there were still "challenging days ahead" for Scotland's financial services sector -- plus there could be more job cuts to come.

And even though Britain is now out of recession, bankers in Edinburgh must also put up with regular jibes from friends about their jobs.

"A lot of the employees who I've met, quite a few of them are friends, maybe don't feel so hot about where they work any more," said Nelson. "As soon as somebody mentions it to them, they get a smack from the general public".

© 2010 AFP

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