Thank you for your letter to me as a customer of Nat West.I’m sorry that the following letter is not more entertaining but bank charges makes for a dry subject.

I was surprised to read about it in a full page advert in The Times. I don’t usually get the Times in print so was pleased to have seen it. I was, though, taken aback that you decided to write to me publicly rather than emailing me or posting a letter in the first instance. I would have considered that a more effective way of communicating with your customers.

I’m really pleased that Nat West is reducing the fees charged on unarranged borrowing, although disappointed that it won’t save me the £250 that these fees cost me in the last month.

Unfortunately, I am not able to find out why I was charged these fees. The statement online is insufficiently clear to work out when I went over my overdraft limit. The dates on the statement do not match occassions when my count exceeded its limits. When I used telephone banking they told me that due to a change (which I had not requested) I had to re-establish my access to telephone banking. I hope that not communicating with customers by phone is saving money – if nothing else.

I was concerned to read that you have decided to reduce the charges as a means of supporting custoers “during these challenging times”. It suggests the charges will rise when you deem the challenging times to be over. Close observers of UK banking may rather think that it has something to do with the shaky legal ground of these charges and the threat of action by the Office of Fair Trading.

You are new to Nat West so I won’t hold you responsible for its past performance. If, however, you want to understsand how to continue to support your customers, the following may be of interest:

1. I bank with Nat West because no one else will give me such a large overdraft. That should be a concern to you.
2. When, in times of plenty, I tried to reduce my authorised overdraft, I was discouraged from doing so because (apparently) it would have hurt my credit rating. That was a pity
3. Banks levied these fees / charges in the first place because they are consistently dishonest with their customers: pretending that personal banking can be conducted free of charge. A more honest relationship with customers which reflected the true cost of administering their accounts may have led to a better relationship when fees (fairly assessed) were levy

Moreover, had Nat West not leant money to people who couldn’t afford it (each month I operate only within my overdraft limit. My account has not been in credit for all but a few days in the last ten years – since you gave me an overdraft) it may still be an independent bank. Had Nat West found a sensible business model for personal banking, it may not have had to chase more risky means of making money so it may have been an independent bank. And had Nat West communicated properly with its customers – rather than preferring espensive adverts – it may have had a greater bond of trust with them.

I look forward to your cheaper charges but hope that the tighter margins bring about more sensible, lasting change in the way that you do business. There must be another way.

Yours sincerely,

Matthew Cain

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However, I find the government’s approach to the issue objectionable. The government appears to be bullying Sir Fred Goodwin. It is using its profile, access to the media and position of power to try and publicly persuade Goodwin not to take his pension. Goodwin is not a criminal and as a private individual does not have the power or influence to fight back against this onslaught.

Sir Fred is not breaking the law in taking his pension. The company he presided over was not found to have acted in a fraudulent manner. Although exceptionally bad in its outcome, its business model was not exceptional. It was in line with others and (importantly) within the regulatory expectations overseen by the Financial Services Authority and HM Treasury.

Sir Fred is out of touch with public opinion. He is a banker so this shouldn’t be unexpected. The government can claim that its approach merely reflects popular opinion. But the government did not question senior executives’ remuneration when times were good. Indeed, it often ran the other way when such arguments were raised.

The government’s attempts to be populist are embarrassing. It lacks emotional intelligence at the best of times – only last week Gordon Brown referred to Jane Goody. Its attempts to be on the side of popular opinion, given its two-faced track record on this issue, feel like the behaviour of an absent parent sucking up to their child: the short term attention may be nice but you know which parent really looks after you.

The government is, of course, the majority owner of RBS. Few other shareholders are able to command the air time to question the pay of company bosses. Few others would have so little power over the company they owned that they would need to. And wouldn’t a private owner be frankly embarrassed that their due diligence was so poor that they hadn’t pre-empted this issue?

As the majority owner of the company, is Goodwin’s payoff really the best example of corporate excess that it can find? Yes, £16m is a lot of money and taxpayers want to know that it is being well spent. But it’s not like governments haven’t wasted the odd £16m here and there. And £16m as a proportion of the RBS loss of £24bn is insignificant. Wouldn’t it be better if the government focussed on ensuring this business is turned around – or even looked at a comprehensive waste-cutting programme?

I do not agree with Goodwin’s payment for failure. However, the spectre of the government picking on a private individual in this way is unpleasant.

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