Labour's bonking mad!

No this isn't a story about over-sexed socialists (unless you maybe include Rev. Paul Flowers) but please do read on.

Ed Miliband, the figure-head leader of the socialists in the UK, the real leader is union boss, Len McCluskey, has indicated that Labour would try to create two new large banks in the UK, so as to promote 'competition.

Now think about that.  We already have 5 big banks in the UK.  We also have building societies (akin to US savings and loans/credit unions).  Indeed, two of these banks are largely owned by the UK people.  The 'people' own more than 80% of Royal Bank of Scotland.

It is entirely unclear what benefits this extra competition will bring.  We now know that Miliband's words have cost the UK taxpayers more than £ billion from the reduction in share prices seen for RBS and LloydsTSB.

Consider also, what happened last time Labour were in power.  This champion of greater competition, then forced through the takeover of the HBOS banking group by LloydsTSB, thereby reducing the number of banking chains!

Consider also, the Labour party's closest banking ally - the Cooperative Bank.  This bank had Rev. Paul Flowers appointed as its chairman, under Labour's 'light touch' regulatory regime.  This is the same Rev. Paul Flowers that is accused of hiring rent boys and using illegal drugs, including Ketamine.  The same Rev. Paul Flowers who is accused of abusing his position as a church  minister to allegedly defraud a charity.  Oh yes, and the same Rev. Paul Flowers who took the Co-Op bank to the brink of bankruptcy!  In the last action, he perhaps proved that he was as qualified as other leading bankers, at least!

So Labour, whose record with banks is, shall we say, patchy, wants to interfere and create competition?

Since when has Labour been so keen on competition?  When did they become the champions of consumer choice?  I ask because there seem to be some areas for which Labour is absolutely opposed to promoting competition.  These are not areas where the incumbents are actually performing well.  Indeed, quite the opposite.

These areas?  Well, the NHS and Education, to name just two.

With the NHS, the UK effectively has a monopoly supplier of health care that is controlled by its provider union personnel.  Can you imagine the uproar that would have followed, if a private health supplier had treated patients the way that the 'envy of the world' NHS treated people at Mid Staffs and other scandal-riddled hospitals?  Does anyone think that Andy Burnham, the Labour minister in charge at the time of these scandals, who tried to hide the truth, would remain in the role, if he were in a private company?  Hundreds of people died unnecessarily and in appalling conditions when their very lives were entrusted to this monopoly provider but, according to Labour, that's okay.

Look also at education, where Labour, again repaying the debts to its union paymasters, consistently opposes any and all reform.  Here the Conservatives have pushed ahead with supporting the establishment of independent schools but much still needs to be done and Labour, and its local authority allies and other members of the payroll electorate, will continue to oppose much needed reform.  As with health, Britain's education system is failing as successive governments have failed to address the core issues because they have focused on 'politically correct' solutions and ignored real world problems.

Apparently, Labour want to see more choice on the high street but I seriously wonder how many people still rely on physical branches and how many use online banking?  When was the last time you went into a bank?

Anyway, usual stuff from Miliband and his socialists.  The 'cost of living crisis' is seen to be being solved, as real wages start to exceed prices and so it is time for another soundbite!  Worryingly, Labour still have a chance that they might be in charge of the UK economy, after the next election.  Miliband the banker - be afraid, very afraid.  Remember who ran the economy alongside the disappeared Gordon Brown?


   

Stonewall, Cardinal O'Brien and free speech

Wikipedia, a reasonable enough source,  defines bigotry as

Bigotry is the state of mind of a bigot, defined by Merriam-Webster as "a person obstinately or intolerantly devoted to his or her own opinions and prejudices; especially: one who regards or treats the members of a group (as a racial or ethnic group) with hatred and intolerance".^[1] Bigotry may be based on real or perceived characteristics, including age, disability, dissension from popular opinions, economic status, ethnicity, gender identity, language, nationality, political alignment, race, region, religious or spiritual belief, sex, or sexual orientation. Bigotry is sometimes developed into an ideology or world view.

Stonewall, the 'charity' that promotes homosexual causes has awarded Cardinal Kieth O'Brien, the head of the Roman Catholic church in Scotland, the title of 'Bigot of the year'.

This is presumably because Cardinal O'Brien openly and strongly opposes the UK government and Scottish parliament changing the definition of marriage to include same-sex couples. 

Among the senior public figure opponents of these proposals, Cardinal O'Brien is probably a safe bet.  He isn't going to be issuing any fatwas, after all, as some other opponents might.  Plus, by displaying their own intolerance of any opinion that differs from their own,  Stonewall still manage to keep the issue on the 'front page'.

One has to wonder at what point Stonewall will consider they have achieved their aims?  When everyone is homosexual - surely not - don't they proclaim it is all about choice?  So someone can choose to be homosexual or heterosexual or bisexual - right?  However, to pass any comment about homosexuality is somehow bigotry?

Read the definition again.  Where or when has Cardinal O'Brien ever spoken hatred against homosexuals?  Yes, Catholics consider homosexuality a sin and yes Cardinal O'Brien can be expected to speak out against it, just like he does against poverty etc..  However, in my experience Catholic teaching condemns the sin and not the sinner - so, I would suggest that it is the act of of homosexuality which is against Church teaching and that the homosexual person is not the target.

I would go further, when reading the definition and consider that the actions of Stonewall constitute bigotry since they are;

obstinately or intolerantly devoted to his or her own opinions and prejudices;

and, in Stonewall's case are religiously motivated.  Or perhaps that is anti-religiously motivated.

Ruth Davidson, the homosexual leader of Scotland's Conservatives won Stonewalls Politician of the year award at the same time.  If she has a shred of decency, she should immediately decline this in the strongest possible terms.  Being associated with bigots cannot ever be right.

Barclays Bank are considering their sponsorship of Stonewall.  Considering?  What's to consider?  Surely they can see that their donations are being used to fund bigotry?

Coutts Bank are also considering their position- last time I looked, Coutts were owned by the majority sate-owned bank RBS - yet another example of the elite using taxpayers money to promote their agendas.

Incidentally, aren't charities supposed to refrain from politics?   Don't expect too much of a backlash though, minorities somehow have a completely dis-proportionate grip on the levers of power and the political agenda in the UK.

RBS, LIBOR and the Public Interest

Think about the LIBOR issue for a moment.

I believe we all know or strongly suspect that Barclays were not alone.  That there is a strong likelihood that other major banks, such as RBS and Lloyds were also manipulating their LIBOR data submissions.

So let's posit that these two were.

Would it be in the public interest to issue fines against them?   Given the level of taxpayer ownership, the bulk of any fines would be tantamount to the taxpayer transferring money from one trouser pocket to another!  Of course on the way though, some or much would be lost due to fees from our noble (?) legal brethren!

Indeed, to go further, since publishing such fines and censure then leads to share price falls, is there maybe a case for doing nothing, in the public interest,  at the Corporate level?  Of course seeing share price activity in recent days, maybe the negative implications have already been 'priced in'?

I don't suggest that the authorities let the individuals concerned, get away with any criminal activity, quite the contrary, I would like to see them imprisoned - not fined, imprisoned - though with the Serious Fraud Office (mis) handling the case, the likelihood has to be low!


Any thoughts on this?


Incidentally, listening to Bob Diamond's light toasting in front of the Treasury Select Committee, the other day (simply appalling service on BBC TV World News, with constant 'talking head' interruptions to give us statements of the obvious!),two things came to the fore, for me.

One, Barclays seemed to be always on the high side and it was suggested that they were advised/told or somehow or other encouraged to lower their rates.

Secondly, the method of deciding LIBOR seems to be to take the submissions from the 17 banks,  and then eliminate the 3-4 lowest and 3-4 highest and then find the rate amongst the middle.

So in both cases the actions of Barclays (and it's traders) , while possibly criminal (mis-representation and conspiracy etc)  has either had no effect or any effect was to reduce the potential cost of borrowing for anyone.  Have I got that right?

 Oh! and still no resignations from Labour or apologies for their complicity in this issue.  This all happened on their watch - loose or invisible regulatory institutions, nods and winks approach to economic (mis) management and Gordon - no more boom and bust - Brown telling us all how he saved the world's financial system! 

Political pygmies - whither the Tories and the guilty ones

What on earth is happening to the UK's politicians?

The MPs expenses scandal demonstrated that many of them had a decidedly dodgy moral compass as regards what to claim or not claim.  I include those that didn't actually break the rules but who certainly broke the spirit of them, with their judiciously timed 'flip-flopping' on main residence and those who claimed.

I guess that I hoped that such weakness was restricted to them pursuing financial gain, at the taxpayers expense.  I thought that at least they would still have some principles.  Or at least the intelligence to understand what a globalized economy means.

But no!  In recent months and getting louder in recent weeks we have heard politician after politician stand up and berate the leaders of global businesses about 'excess' (pots and kettles come to mind!) and attack people (Hester, for example) regardless of the job they are doing and who they are doing it for.

Exactly what business is it, of any UK politician to stick his or her nose into the running of a privately owned business.  This isn't Soviet Russia!  These are not state-owned enterprises (which, incidentally, regularly rewarded failure!).  These are private businesses, owned by shareholders and institutions and managed by employee executives who, just like all employees have contracts of employment laying out their legal terms and conditions of employment and, controlled by a Board of Directors, that are elected by the owners of the company.

I have spoken here before of the rank hypocrisy of politicians.

None greater than that coming from the Labour front bench, who negotiated Stephen Hester's contract of employment, when they hired him to clean up the mess, that was RBS.  A mess to which they and the FSA and Bank of England were also contributors.  (Note also, these culprits have kept their gongs!)

I don't expect too much clear water between Labour and the Lib Dems on business as economic illiteracy and ignorance of how businesses work, runs throughout their effectively common 'policy' (if that is the right word for a bunch of ill-thought out and half-baked ideas, developed in a drunken student union bar)

However, surely we would expect Conservative politicians to have an understanding of the damage that is being done to UK PLC.  Surely someone understands that when government ministers are involved in pushing an argument that legal contracts should be ignored, this sends the most possibly wrong message?

Where are the Conservatives that have the courage or spine to stand-up and say ENOUGH!

Heavens!  The election is likely three years away!   

Instead, we have MPs joining the ignorant mob.  That is, when they can be torn away from the critically important issue of the name of a beer being sold in the House of Commons.  Pygmies is maybe too grand a word for such people.

If politicians think that getting growth in the UK economy is going to come from forcing companies to consider exactly just why the headquarters of their global business is based in such an unfriendly business environment, then they just show how out of touch they really are (bit like during the expenses scandals!)


If politicians think, as Labour's Liam Byrne apparently does, that banks (including privately owned ones) should be forced to loan to business, then there really is little long term hope.

When the lunatics take over the asylum, you can at least expect that they have the experience to know how that place works.  This shower of spineless MPs don't even have that!

If you care for the future of the UK (and its economy) tell your MP to grow a backbone and do what is right for the UK and not just for tomorrow's headline!

Phoney Outrage at RBS bonus

Hypocrisy knows no depths at the (still yet to apologise) Labour Party.

It was Gordon (I have ended Boom and Bust) Brown and Alistair Darling who brought in Stephen Hester to be the CEO of RBS, in succession to the Labour-honoured but then disgraced, Sir Fred Goodwin.

It was these two who agreed and signed off on the compensation package for Hester.

Now we have cheap point scoring by Ed Miliband and his jolly band of overpaid media supporters saying it is a 'disgrace' and the government should intervene, etc..  I won't go into Labour's complete lack of success whenever it 'intervenes' as that would take toooo long. 

However, it is interesting to see only politicos, and most (all??) of those never having held down a real job, criticising the payout.  I guess their lack of understanding of contractual matters is to be expected - they seem to be pathologically unable to keep their election promises, after all.


My advice to Stephen Hester - tell the board that 'no, I want my full contractual entitlement, £1.6 million or thereabouts,  I want it in cash, oh and given the unprofessional way that you and the major shareholder handle bank affairs and most particularly my confidential compensation issues, I consider that I have been constructively dismissed - see you at the tribunal, where I will seek full compensation!'

Then Vince and George can figure out how they will get any banker of stature to take on the poisoned chalice that is RBS CEO and while they ponder, watch the share price of RBS spiral downwards and with it the taxpayer's 'investment'.

As you would expect with politicians, hypocrisy is leaking from Labour and finding a home with Lib Dem Jeremy Browne.  He talks of

"There's a question of honour. Even if there's a contractual opportunity for him to have a bonus it doesn't mean he has to accept it."

And exactly what is teh question of honour?

Mr Browne said Mr Hester was paid more in three days than a soldier serving in Afghanistan received in a year.
"He should reflect on that. He is effectively a public servant in a bank which is almost completely owned by us the taxpayers," he said.
"He needs to think like a public servant who has a duty to his country, not just his own wealth." 

Are we also going to see all Premier League footballers having their compensation packages attacked, as well?  What about newsreaders, the Director General of the biased BBC? union leaders like Brendan Barber and Bob Crowe? GPs and Council Leaderss?  Maybe fatous MPs and junior ministers?
 
AS for Boris - well he has an election coming up.  I think he will come to regret his short term opportunistic sound bite.  As an aside, I really can't understand what he is doing in Davos though.  Same applies to Ed M.

Private sector pay

We are just entering the period when financial institutions declare their 2011 corporate earnings and in many cases the 'bonus pool' that will be shared among their employees.

Following the bail-out of RBS, Lloyds and HBOS, the retail and investment banks now fall into two camps.  Part state-owned (see earlier) and those others institutions such as HSBC, Barclays JP Morgan, CitiCorp and Goldman Sachs, which received zero bail-out funding from the UK government  - we will call these latter type - private institutions.

We can expect lots of the usual froth from commentators about 'excessive' bank bonuses and how the 'government ought to do something about it'.

So what can the government do?

Well in the case of the part state-owned RBS, Lloyds and HBOS, they can use the shareholdings, that they hold on behalf of the UK people, to limit the amounts of payouts.  These could be limited to those that are required to meet contractual obligations - some people have bonuses built into their contracts of employment and if they meet certain targets, then legally, these must be paid - and they can then limit other payouts to zero or to certain pay grades etc., however, they and the other shareholders see fit.

In the case of the private institutions, it is really none of the business of government to interfere in how the shareholders (otherwise known as owners) spend the income of their company.

If the government wants to affect such private sector bonus payouts, it could do so through the tax system (as I have proposed, on an earlier blog) but it cannot and should not dictate to private companies on the remuneration that they give to any of their workers.

If the government wants to set the tone around pay restraint, then maybe they should concentrate on the areas which are within its span of control................

So, set a cap on the pay of anyone employed by a public organisation.  So local authority executives, civil servants, military chiefs, ministers, BBC executives, etc.  My suggestion would be around  £100,000 per year.  Many private sector companies have re-organisations and require personnel to re-apply for their role, so do the same with all of the above - get them to re-apply for their job but at a reduced rate of maximum £100,000.  Oh, and let's make the maximum include taxpayer contributions to pension funds.

That might start to sound a little more like 'we are all in this together' in action!