UK NEWS
SECRETS OF 1980 FIGHT TO KEEP THE ROYAL BANK INDEPENDENT
LOYAL: Younger urged Thatcher to keep RBS in Scotland
By Ben Borland
SECRET papers have revealed the desperate scramble by Scottish politicians to prevent a takeover of the Royal Bank of Scotland that would have put the bank into English hands.
Government documents – released under the new 15-year disclosure rule – show how the Scottish Secretary and senior MPs battled to ensure the institution remained independent during a crisis in 1980.
Politicians north of the Border repeatedly warned Westminster about the “very great sensitivity” felt by Scots about the prospect of losing the bank at the height of bids from London-based Standard Chartered, and the Hong Kong and Shanghai Banking Corporation.
The papers are among 11,000 official documents being released tomorrow by the Scottish Government, after Ministers decided to reduce the length of time they must be kept secret from 30 to 15 years.
Dating from 1979 to 1983, they include reports on the nuclear and oil industries, planning inquiries, papers on Scottish schools, prisons and health, probes into football hooliganism and arrangements for a referendum on devolution.
The files on the RBS takeover contain correspondence from Prime Minister Margaret Thatcher, then only 12 months into her 11 years in power, and Chancellor of the Exchequer Geoffrey Howe.
They show the cool reaction in Downing Street was at odds with the appeals from Scottish MPs and business leaders, who said the takeover would set a “dangerous precedent” and spark a “brain drain” from Scotland.
Parliamentary business minister Bruce Crawford said: “The National Archives of Scotland are making these files available because I decided that the public should not have to wait so long to get an insight into decisions taken in their name.”
In 1980, a few months after RBS successfully fought off a takeover bid by Lloyds, London-based Standard Chartered Bank proposed a merger accepted by the board in Edinburgh.
The Hong Kong and Shanghai Banking Corporation then launched a rival bid and the Conservative Government referred both bids to the Monopolies and Mergers Commission, which rejected them as being against the public interest.
The documents tell how Tory MP James Douglas Hamilton warned that if the bank were to be taken out of the country it would operate under English law, which would cost Scotland jobs.
George Younger, Scottish Secretary, also repeatedly told Westminster about the sensitivity felt by Scots at the
prospect of losing the country’s largest financial institution.
Mr Douglas Hamilton, then MP for Edinburgh West, wrote to Younger saying: “If a merger takes place there is a risk more company contracts will be signed under English law rather than Scottish law with a consequent loss of employment.”
Lord Anthony Barber, chairman of Standard Chartered, wrote to the Prime Minister beginning: “Dear Margaret”.
He wrote: “I find it difficult to accept the reports that Alex Fletcher, private under secretary at the Scottish Office, is expressing total opposition to the proposed merger.”
Lady Thatcher replied, denying any Government preference, but added: “I gather George Younger expressed his concern about implications for Scotland of loss of Royal Bank independence.”
Iain Noble, the chairman of Lennox Oil Company, said a merger would “act as a dangerous precedent for yet more takeovers of major Scottish companies and make it difficult to keep the Bank of Scotland”.
He also said it would weaken Edinburgh’s position as Britain’s second financial hub, pointing out – accurately – that the city was poised to make a major development in its international and European business.
