OVERDRAWN WITH FERGIE
James Hughes-Onslow was £500 in the red;
the machine ate his card; he asked Drummonds how he differed from the Duchesss of York
TROUBLE at t'hole in t'wall last week. Over-expenditure at Christmas and failure to do expenses, combined with my wife's conscientiousness in paying the gas bill on time, have resulted in an overdraft of £500. The gold-coloured Highline card given to me by Drummonds bank for not having an overdraft very often in 38 years of banking with them was spat out by the ruthless machine, leaving the family deprived of bread and milk for a day or two. It is a sorry story, no doubt repeated all over the land in these dark January days. Imagine the bewil- derment of four little Hughes-Onslows on learning that the Duchess Fergie, helicopter correspondent and lead comic in the royal circus, has run up bills of £3 million on first- class air-fares and expensive clothes without a squeak of pro-test from her bank, only to be rescued and given further encourage- ment by American financiers.
I have explained to my children that bankers prefer people like the jolly Duch- ess of York. Her preposterous behaviour brings as much merriment to the boardroom at Courts as it does to the news-desk at the Sun, and indeed to its readers. If you have a mother-in-law with a big house and a heap of tiaras the banks will fall over themselves to lend you money; the bigger the loan the better, and the longer the better. If she bails you out a couple of times, they'll lend you even more the third time. Bankers thrive on Fergies, that is the way of the world.
I had never met my bank manager before, having seldom run up an overdraft until recently, but after last week's crisis I paid a visit to Drummonds' splendid headquarters by Admiralty Arch. It is just a couple of hundred yards, as it happens, from the lav- ish atrium of Coutts & Co. in the Strand, opened a few years ago by the Queen. Beneath an eight-foot portrait of the origi- nal Mr Drummond I spread my papers out on a mahogany table in front of Mr Patrick Kerr, an earnest young man with red hair, and asked him precisely what was the bank's strategy on lending me money.
First I pointed out that my father, who banked with Drummonds for many years, had become extremely irritated 30 years ago when the bank refused him an over- draft of £50,000 (about £250,000 now). He took his account to C. Hoare & Co. in Fleet Street, where they still wear top hats and open doors for you. Hoare's asked no ques- tions. They immediately lent him all the money he needed, solely on the basis that the senior Hoare of the day had been my father's fag at Eton. Well, now, as it hap- pens, I told Mr Kerr rather patronisingly, that Mr Michael Peat, who takes over as Keeper of the Privy Purse at Buckingham Palace this year, was my fag at Eton. Would this cut any ice with Drummonds in relation to my own overdraft, I asked him.
`We take everything into account,' he said with masterly diplomacy. 'It's all a matter of discretion. You need to know your customer. If you had a rich mother- in-law, or friends in high places, this might well be relevant, but we'd need to talk to them about you, not to you about them.'
This may be the heart of the problem. Has anyone at Coutts asked the Queen whether she thinks her daughter-in-law is a catastrophic spendaholic, and would she answer this question anyway? In his article on her (The Spectator, 30 June 1990), A. N. Wilson said the Queen Mother com- plained to him that her bank manager was being a little tough on her. One can imag- ine the scene, with the gentlemen from Coutts gently suggesting to Her Majesty that she shouldn't spend so much money on the horses, and the Queen Mother nodding politely.
Somehow one can't see the royal toadies giving Fergie the kind of tough talking she needs, but if they value their relationship with the Queen this is what they may have to do. Otherwise they may find themselves in a scene similar to the denouement in the film Rosalie Goes Shopping, in which the plastic-spending housewife-heroine eventually confronts her bankers in the boardroom: 'If your clients knew you had lent me billions of dollars unsecured, you would go bust.'
What is it that makes Fergie a more attractive prospect for the money-lenders than you or I? Budgie the Helicopter, which has thrown her a lifeline, would be a finan- cial liability under anyone else's author- ship. As for Fergie spilling the beans with a behind-the-scenes bestseller about the royal family, this might make her more than £3 million. But it is more likely that this alarm- ing prospect would simply prompt the Queen to bail out her daughter-in-law a third time, despite her threats to the con- trary. So Fergie finds herself in a better posi- tion for a loan than ever. The embarrassing possibility of the Queen's grandchildren being brought up in poverty only adds to the likelihood that someone will rescue her sooner or later. So that's all right.
But what's in it for you and me? The NatWest sets a maximum overdraft of £5,000, at which point they start sending let- ters and offering tedious financial discus- sions. Customers at high-street banks (which include Drummonds as part of the Royal Bank of Scotland) are very different from those of private banks, such as Coutts, Child's and Holt's, according to Mr Kerr. Their clientele tend to have much higher incomes, often from mysterious sources.
`If you wanted a big loan from us, I would ask you to fill in a form explaining how much you wanted, what you required it for, how long you needed it, how you intended to repay it and so on,' said Mr Kerr. 'I would also want to know about col- lateral, your house and investments, so that you could continue with the loan if you lost your job, or your pension scheme in case you died. A request for £50,000 to buy a car or a holiday would not be as accept- able, for a number of reasons, as buying a house, which can in extremis be sold to repay the debt. We tend to allow people to buy a house worth 31/4 times their salary.'
High-street bank customers may be lent more money initially to get them out of their difficulties, but eventually, at the discretion of the manager, the bank will fore-close. A private bank might take a different view. `The rules are different,' says Mr Kerr. 'It's like apples and pears, but the crux of extend- ing any overdraft is the ability to repay.'
As for my £500 limit, he explained, the hole in the wall has no discretion. This was my own choice, signed up to years ago to avoid building up debts, something Fergie would never have done. These days there is a financial crisis in the third week of practi- cally every month. I could borrow more, much more, if I were the Duchess of York. She has embraced heroic Rooseveltian concepts of spending her way out of a depression. Where are my financial advis- ers, my exuberant clothes, my charming ranch in Sunningdale? Bring out my coloured pencils for the great children's book. Things which would ruin the rest of us have become Fergie's greatest assets.
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