Let’s all stick pins into Derek Sach. He’s the man in charge of Royal Bank of Scotland’s hit squad, the Global Restructuring Group, and it seems that, just as in the movies, he’s almost single-handedly blown up the great swathes of British business that were his targets.

To read two reports last week, you’d think Mr Sach’s bonus depends on destroying as many viable companies as he can, before flogging the rubble at silly prices to his mates in other parts of the bank. Well, maybe. The behaviour of big banks never ceases to surprise, and seldom on the upside, but this is a bit much.

We haven’t seen all the gory details of the Tomlinson report into the treatment RBS meted out to small businesses, but even the author must be surprised at the traction it’s got, considering he commissioned himself to write it. However, many of the cases that we have seen have a common theme.

They are essentially about property, the great British obsession. The developers/speculators from whom Mr Sach’s men pulled the rug had borrowed heavily from RBS in the good times. Had they continued to roll, the borrowers would have got stinking rich, while the bank would get its money back – a high-stakes version of heads I win, tails you lose.

This hardly excuses the more extreme brutality of Mr Sach’s hitmen, but both borrower and lender might have investigated beyond the mark-to-market value of the property before taking the plunge. Merely looking at the asset backing of a venture is lazy banking. A loan may be under water, but if the business plan still stands up, an intelligent lender will not pull the plug, or cause death by a thousand cuts with fees and charges.

Looking may be what GRG actually did. The other report, from Andrew Large, found that only one in ten businesses which went to the boot camp subsequently went bust. Unfortunately for Mr Sach, they are the loudest decile.


Rentiers at the ready

The days may be short, but it’s still autumn at the Treasury, and on Thursday George Osborne will make a statement to prove it. Please don’t call it a Budget (we will, we will). This is supposed to be about spending, but no recent chancellor has resisted the chance of a headline-grabbing tax initiative.

Few tax increases are popular, but an outfit called the Intergenerational Foundation may have found one. It argues that removing tax breaks from buy-to-let landlords would yield £5bn, and judging from the invective that followed Norma Cohen’s report of the report in the FT, the Foundation may be onto something.

The rentier benefits from tax relief on the mortgage, delapidation allowances and – if the owner times his residence moves right – freedom from capital gains tax on disposal. The Foundation argues convincingly that buy-to-let has helped push up property prices, particularly in London, and has done little to stimulate new building.

Well, the clue’s in the name, and since everyone else has a lobby group, we shouldn’t argue about one for the young. There’s nothing inherently wrong with buy-to-let, but subsidies for the rentier class are another transfer of wealth from the young to the old. That looks wrong today – and £5bn is a useful extra sum for George Osborne to play with.

The right priority

Robin Leigh-Pemberton, who died this week, was a very odd choice for governor of the Bank of England in 1983. But after Kit McMahon had described Nigel Lawson’s Medium Term Financial Strategy as hokum, and Jeremy Morse spoke out about being bullied into subsidising the financing of UK exports, the two front runners effectively ruled themselves out.

Gordon Richardson had been governor for a decade. He was so cross at not being asked to continue that he gave little help to his successor, whose mixture of effortless charm and ability to delegate overcame his ignorance of the mechanics of central banking. Lord Kingsdown, as he later became, considered that being made Lord Lieutenant of Kent mattered more to him than being governor of the Bank – which may also help explain why he was rather good at it.