Tag Archives: gordon brown

Unjustified Bonuses Paid By Taxpayers

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AIG bonuses are ‘an outrage’ says President Obama, and he speaks for us all.  How can the senior executives in AIG be so out of touch with reality that they rely on legal niceties to do what is so morally wrong?  Perhaps that lack of judgment and apparent unawareness of how the real world functions explains their appalling track record.  Well they seem to have shot themselves in both feet this time:

Barack Obama is vowing to pursue “every legal avenue” to stop a clutch of top executives at American International Group Inc. from pocketing multimillion-dollar bonuses, including some to employees who designed the risky credit instruments that helped topple the insurance giant.

The U.S. President joined congressional leaders and state regulators on Monday in demanding that the failed insurance giant, which has so far received more than $170-billion (U.S.) in government bailout cash, roll back $165-million in bonuses paid to employees over the weekend.  Outrage was the word of the day as news spread of the payouts, some reportedly as high as $6.5-million.

Not surprisingly, the Bonuses overshadow foreign bank payments, which could have drawn equally violent reactions.

When it emerged on Sunday that foreign banks had received more than $50bn of US federal funds as part of the AIG bail-out, big beneficiaries such as Deutsche Bank and Société Générale must have braced themselves for an outcry in Washington.

Any senior executive of any financial institution should have a keen awareness of what is going on around the world and consider carefully the most appropriate reactions. In the UK, the Financial Services Authority (FSA) will set out a banking clampdown.

Britain’s financial regulator, the FSA,  plans to clamp down on risky mortgage lending and City bonuses in a shake-up of banking rules due this week according to the British Sunday newspapers.

The FSA is planning a crackdown on management bonuses that reward short-term risk taking and will propose new rules on how banks should be run, including forcing them to hold more capital against risky trading, according to the Financial Sunday Express.  The regulator will also table new vetting procedures to ensure bank bosses are qualified to run financial institutions.

This follows up on assertion by the UK Prime Minister, Gordon Brown, that We won’t pay for bankers’ one-way bets.  He laid out a four-point plan to end the excesses of the bonus culture

Everywhere I go in Britain, I sense and share the anger and dismay of millions of hard-working people who have watched in disbelief during a year in which irresponsible practices in global banks have brought the world’s financial system close to collapse.  Only bold action to protect those endangered through no fault of their own will do.

Responsible senior bank executives should not need to have the politicians clamp down on them in this way.  It goes beyond the issue of legality, it is a simple question of morality.  President Obama has a massive popular movement supporting him as he tries to do whatever it takes to re-establish this in the financial world.

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RBS (The Royal Bank of Scotland ) Has Record Loss Of £28 billion

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After hearing the news that the Halifax Bank of Scotland (HBOS) is proving to be the Lloyd’s Banking Group Albatross, you might not be surprised to see that the other UK banking shoe is falling, if you don’t mind the mixed metaphor. 

We now see that RBS is to sell off £300bn worth of assets.

RBS (RBS) is set to embark on a major restructure which will see it sell off at least 20% of its business worth around £300 billion.  The bank is due to announce its full-year results on Thursday and is expected to report a £28 billion loss – setting a record in UK corporate history.  Newly-appointed chief executive, Stephen Hester, is to unveil details of the plans this week, which will also see the bank split into a “good bank” and “bad bank”.

RBS is almost 70% owned by the taxpayer and received an injection of £20 billion last autumn to prevent it from collapse.

It is no surprise to see that the UK PM Gordon Brown calls for a return to prudent banking.

Prime Minister Gordon Brown called on Sunday for a return to traditional savings and mortgage banking in Britain as he prepares to insure banks against billions of pounds of toxic assets. He has asked the Financial Services Authority watchdog to look into how it should control new mortgages for more than 100 percent of a home’s value.

Brown’s Labour government is working out the details of a scheme in which banks including Royal Bank of Scotland and Lloyds would put billions of pounds of troubled assets into a structure that will ensure they are only liable for a proportion of any losses. The government hopes the insurance scheme will give banks the confidence they need to reopen lending lines frozen by the credit crisis.

One can only hope that the very expensive recent banking lessons both in the UK and the USA will bring in an entirely different banking culture around the world.

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UK MPs Gold-plated Pensions Under Serious Review

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When so many, and in particular pensioners, are suffering world-wide in the global financial crisis, it is almost unbelievable to see the UK Telegraph’s story Gordon Brown to scrap final salary pensions for MPs.

Gold-plated final salary pensions for MPs could be scrapped, under plans put forward by Gordon Brown.  The Prime Minister has called for an investigation into how MPs’ retirements are funded because he fears they are becoming too expensive for the taxpayer.  MPs are still able to retire with large, taxpayer-funded, pension pots.

The move by Mr Brown could eventually allow politicians to propose scrapping all public-sector final salary schemes, currently enjoyed by millions including civil servants, council employees and health workers.  The current total liability of public-sector pensions to the taxpayer is officially estimated at £650 billion, but the Government has been unable to look at reforming the system while MPs still enjoy the same benefits.

If you are unaware of this situation, you may wish to read the full article and then consider which of the following best describes your reaction on reading this:

  • This just cannot be true. It must be an early April Fool’s item.
  • How can a Labour government not have canned this privileged pensions boondoggle years ago?
  • Why did Tony Blair not refuse his additional grace-and-favour pension (possibly over £64,000 a year) as Gordon Brown has done?
  • Why does it need to be studied?
  • What about all those UK pensioners who live in poverty?

Perhaps you have some other reaction to these UK MPs Gold-plated Pensions.  If so, please add a comment and tell us all what you think.

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Openness In Government – Barack Obama

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This is a somewhat ironic follow-up to the earlier rant about Gordon Brown’s wish to keep embarrassing UK government activities secret.

Actions speak louder than words.  On his very first packed full day in office, Barak Obama has pledged an era of openness.   He has promised a transparent government and said he would change the way the federal government interprets the freedom of information act.

He said he was directing agencies that vet requests for information to err on the side of making information public — not to look for reasons to legally withhold it — an alteration to the traditional standard of evaluation.

Just because a government agency has the legal power to keep information private does not mean that it should, Obama said. Reporters and public-interest groups often make use of the law to explore how and why government decisions were made; they are often stymied as agencies claim legal exemptions to the law.

To achieve this transparency, he promised to apply the very best technology.

Obama’s administration will utilize cutting-edge technologies to give Americans access to his administration’s records and he will likely appoint a chief technology officer who will ensure that government and all its agencies have the right infrastructure policies and services for the 21st century.

Among Obama’s proposals are the creation of internet databases for lobbying reports, ethics records and campaign finance filings as well as a “contracts and influence” database to track federal contractors’ spending and lobby efforts.

One hopes that other national leaders will follow Obama’s lead.  Gordon Brown has backed off his threat to keep the MPs expenses data secret, which would have been voted on tomorrow.  Given the timing it would look as though the Facebook hornet’s nest (now at 8,400 members at the time of writing) that developed had more to do with the change of heart than a wish to emulate the US president.

One hopes the same spirit of openness begins to be more apparent in Canada than is the current norm.  However it is somewhat disheartening to see that the current version of the freedom of information legislation website has only an outdated copy of the legislation available.

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Gordon Brown, UK Prime Minister, Old World. Barack Obama, New World.

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What a glorious day occurred yesterday for the whole world with the inauguration of Barak Obama as the new US president.  Now we must all pick up the message, Yes We Can.  That means facing up to reality.

After a whirlwind of galas surrounding his inauguration, Barack Obama begins his first full day as U.S. president Wednesday with a full plate of reality staring him in the face.

Gordon Brown, the UK prime minister says that he sees this as a new chapter
in both American history and the world’s history.  However others have commented before that Prime Minister Gordon Brown is out of touch.

If you will permit a short rant, I note that today’s word in my Forgotten English calendar is mumbudget.  That is an expression denoting secrecy as well as silence.  It seems to be a word beloved by Gordon Brown.

The Times headline today is Gordon Brown backs moved to block full publication of MPs expenses.

Gordon Brown has imposed a three-line whip to force a move to block full publication of MPs’ expenses through the Commons.  Labour MPs could face sanctions if they rebel in tomorrow’s vote on an amendment to the Freedom of Information Act that would exempt MPs from disclosing exactly how they have been spending their annual £22,000 second-home allowance.

The Guardian had already pointed out that the move to make MPs exempt from publishing expenses will antagonize a large number of people.

The move next week will allow parliament to nullify all the long-fought victories by campaigners and journalists to force MPs to publish details of all their individual receipts for their second homes, including details of what they spent on furnishings, maintenance, rent, mortgage payments, staffing, travel, office staffing and equipment.

Public opposition is growing against the move.  At the time of writing this, almost 7,500 people have signed a Facebook campaign led by mySociety.  mySociety runs the “theyworkfor-you” website, that urges MPs not to push through the change.

What a stark comparison.  Gordon Brown in the Old World.  Barak Obama in the New World.  Thankfully the Internet forces openness and makes ever truer those words of Abraham Lincoln at Gettysburg: a government of the people, by the people, for the people.  Please smell the coffee, Mr. Brown.

STOP PRESS: Gordon Brown withdraws plan to keep details of MPs’ expenses secret:
Surprise announcement follows the collapse overnight of a bipartisan agreement between the prime minister and David Cameron

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UK Government and Its State Pensioners

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UK State pensioners should be forgiven for not understanding their treatment by the present UK Government. The Prime Minister, Gordon Brown, often states he is coming from the moral high ground, for example as he said in a speech to the Labour Party conference on 23 September 2008.

What angers me and inspires me to act is when people are treated unfairly.  So when people share with me stories about the hard time they’re having with bills, I want to help, because I was brought up seeing my parents having to juggle their budget like the rest of us.

However we now have a story in the Telegraph that Adults could be forced to take out private insurance to cover nursing home costs.  This is to cover the cost of their care in old age under plans being considered by the Government.

This stands in sharp contrast to the views expressed in a recent blog post by Michael Thompson of Link-Age/Countrywide.

What makes matters much worse is not just the national apathy on this issue from both richer pensioners with other income, from the general public, from the British media, and from the the two major political parties in this country.

It is that the money is there, with this Government sitting on a National Insurance “surplus” of around £40 billion*, which is expected to be 74.1 billion by 2012.  And also that the Government’s Pension Credit Means Test system is costing tax payers 10 times more than the restoration of the earnings link.

To think that our war veterans and younger pensioners are means tested for extra money on a £90 odd quid a week state pension makes me puke, when MP’s themselves are sitting pretty thank you.  Still we British largely do nothing.  We get what we deserve in this country, but our pensioners do not.

It would appear that seniors in the UK do not get the respect they deserve.

* Update: Peter Morris in a comment to another post offered the following information:
Some time ago I received a response under FOI from the UK Government’s Debt Management Office which holds the surplus in the National Insurance Fund in an investment account called “Call Notice Deposits” and the balance was around £50 billion as at 31st March 2008.

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