Tendring Topics…..on Line
Bankers Bonuses
The
previous Governor of the Bank of England said publicly on several occasions
that the financial crisis in the UK and world-wide was not due, as Messrs.
Osborne and Cameron would have us believe, to the policies of the previous
government, over-generous welfare benefits, nor even the activities of
immigrants and the machinations of ‘Brussels’.
Fairly and squarely to blame were the activities and incompetence of
‘the Bankers’, obviously not the management and staff of your local Barclays,
Lloyds or what-have-you (they’re as much victims as we are), but the
‘super-brains’ at the top – and the Governor of the Bank of England really
should know.
Mind you, I think that a considerable
measure of blame does lie with the previous New Labour government – not because
they were too eager to spend money on social services, but because, blinded by
billionaires, they were just as keen to seek the favour of the bankers, the
money lenders and the financial fiddlers as the present lot at Westminster .
They should have spotted what was happening and curbed it. I don’t recall that the present Bank of England
Governor has ever publicly blamed the banking fraternity as had his predecessor
– but then he has never suggested that his predecessor was wrong.
What
is particularly infuriating to the ordinary British citizen – the ordinary
voter – is that throughout the period of recession top bankers have shed a few
hundred junior staff; carried out mergers; effectively reduced the value of
savings (including mine!) by paying savers an interest rate below the rate of
inflation - and have continued to draw eye-wateringly high salaries for just
turning up at their offices. For
actually doing their best at the job for which they are paid those enormous
salaries, they expect to receive even more gargantuan bonuses!
Quite
apart from causing the world-wide financial crisis there have more recently
been the muck-ups and illegal fiddles in which some of them have been involved. Millions of pounds had to be
repaid to bank customers who had wrongly been sold insurance. For weeks I had regular phone calls from
‘ambulance chasing’ lawyers assuring me that they’d get my money back for me despite my assurances that, as far as I knew, none of my money had been
involved! Then there was the fiddle
with interest rates that led to huge fines – all passed on to customers I have
little doubt. Yesterday we learned that
one of the biggest banking groups had been heavily fined for having a faulty IT
system that resulted in customers being unable to access their own money for
several days. Rents, mortgage
repayments and direct debit payments were not paid! No doubt this was the fault of someone well
down the line in the banking hierarchy – but the top people claim the credit
for success, so they should also be prepared to accept the blame for disaster.
Something
should really be done to cut those huge salaries and abolish those enormous
bonuses but, so we are assured, market
forces demand that we offer those rewards if we want the ‘best’ brains. If we don’t they’ll just go elsewhere. Well, we’ve seen the disasters that ‘the best
brains’ can cause. Who knows? The ‘second best’ might be less successful –
or they might just be less disastrous!
One
way that ‘the best brains’ could be discouraged from migrating in pursuit of a
few extra millions would be to limit or reduce the number of places to which
they could migrate. The European Union
probably had this in mind when they decided to put a legal limit on Bankers
Bonuses. Throughout the EU, they
suggested, no banker should receive a bonus in excess of his or her annual
salary. They then added a rider to the
effect that the bonus could be up to double the recipient’s annual salary if
the Bank’s shareholders agreed.
It
doesn’t take a financial genius to see how utterly feeble that is. It means that a banker with an annual salary
of £500,000 (common enough among top bankers though at least ten
times more than a salary that most of us would consider very high) he
would be able to receive another £500,000 as a bonus. He’d be receiving a million pounds for his
year’s work! But that’s not all. If he could persuade a majority of the
bank’s shareholders to agree, that bonus of £500,000 could be doubled, making his
total pay for the year £1.5 million. That’s
nearly £29,000 a week! You could hire
quite a few doctors and nurses for that.
Would
you believe it? – pathetic as the EU’s decision is, Cameron and Osborne were
determined to oppose any limit to
bankers’ bonuses on the grounds that it would only lead to their being offered
even higher salaries! I understand that
they have now withdrawn their opposition, having been told they haven’t a leg
to stand on.
No
wonder the UK
electorate is sick of all the existing political parties!
UKIP triumphant?
I
concluded my comments about Bankers’ bonuses by saying that the UK
electorate is sick of all existing political parties. Their members in Kent
demonstrated that distrust last week when they followed the ‘Clacton example’
and, in a by-election in Rochester ,
returned another defecting former Conservative to the House of Commons as a
Ukipper.
Once
again I see parallels between the situation in the UK
today and that in Germany
in the late 1920s, early 1930s. In
Germany too a dynamic and charismatic leader, first thought of as ‘a bit of a
joke’, transformed a struggling political party into a dynamic, powerful and
all-conquering force that struggled into shared power and then became a ‘cuckoo
in the nest’, turning out members of all other parties and establishing the
Nazi one-party state. ‘One People, One United Kingdom
I
now think though that, despite that NO vote, Ukips’s continuing success means that a very dangerous
Conservative/UKIP coalition could emerge from the general election (I can’t
tell you how fervently I hope that I am wrong!) and that Ukip members, with their vigour
and ruthlessness could dominate the
coalition, so that the situation could end with Nigel Farage as a 21st
century Oliver Cromwell. Conservatives proclaim that a vote for any
party other than the Conservatives makes it possible that Ed Miliband will be
the next Prime Minister. I very much
fear that a vote either for the Conservatives or Ukip will make it possible that,
sooner or later, our government will be headed by Nigel Farage.
However,
another – to me more cheering – future seems possible. An unexpected
result of the Scottish NO vote has
been the increasing popularity of the Scottish National Party that has, since the referendum, more than doubled its membership. Alex
Salmond, a dynamic and charismatic leader has retired and has been followed by a
forthright and politically experienced still-young woman who promises to be a
worthy successor. She has taken his place both as Party Leader and as Scotland ’s
First Minister.
Conservatives
and Lib Dems. have been all but eliminated from the Scottish scene. Ukip has never gained a foothold there – and
the machinations of New Labour have little appeal. It wouldn’t surprise me in the least if Scotland , still part of the UK thanks to that No vote, returns a solid
block of Scottish National Party MPs in the new Westminster Parliament. It is possible that they might make common
cause with MPs from Wales
and Northern Ireland
and join with Labour to create a formidable coalition that could well outnumber
the combined Conservative and Ukip forces.
Who knows – the fervour of the Scots might inspire Ed Miliband at least
to attempt to narrow that yawning gap (no, not the deficit) between the wealthy
and the poor and induce the wealthy to carry their fair share of the burden of
taxation.
There's another quite different matter about the Rochester
and Clacton by-elections that’s worth bearing
in mind. In both by-elections (and in the earlier European Parliament
elections) the Green Party Candidates received more votes than the
Lib-Dems. Nick Clegg in his urge to
become Deputy Prime Minister has effectively finished off his once-great
Liberal Party. Gladstone and
Lloyd-George must be turning in their graves.
Yet the BBC and other tv channels
are still inviting Nick Clegg, and not the leader of the Green Party, to take
part in televised debates before the General Election. The only conclusion that I can come to is
that the BBC and whoever funds the independent tv channels doesn’t want Green
Party policies to be considered by the public because the Greens are the only party working towards real change. He who pays the piper calls the
tune.
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