Where is the Labservative Substance this Week?

At the weekend both David Cameron and Gordon Brown said more or less the same thing this election is about substance not personality.

This morning Nick Clegg talked about radical reform in our schools, yesterday he talked about banking reform as well as fairness for rural Britain and on Monday he was talking about stimulating the green economy.

Now I may be wrong but all I've heard from the Labservatives is how they are all about change, or that they are the progressives. Unlike Nick they haven't been putting any substance behind those claims all week. Indeed the Labservatives have been talking about negative issues, usually part truths about the Lib Dems all week. Come on Gordon and Dave where is the substance? Or is that lacking because there isn't any real change, progressiveness or radicalism in what you have to offer?

Reason to Vote Lib Dem 127: Bankers Backing Dave

At present the two most hated professions in the public eye are bankers and politicians.

Bankers for who issue over the taxpayers having to bail them out while they still grant themselves multi-million bonuses. Politicians because of the expenses scandal, which has tarred all parties with the same brush, despite the Liberal Democrats record of fighting to clear this up even before the Telegraph started their round of articles exposing the worst last year.

Therefore the news that top bankers are backing David Cameron's Conservatives most be worrying. Maybe it is a sign that the Conservatives are softest on banks, softest on the problems with banks. If you thought Labour dealt with them poorly you may need to look long and hard at the Tories if then Banks want them in.

Don't forget the 'pinstriped Scargills' are the businesses who like the Tories not because of the fairness they bring but because of the benefits, especially to their profits that will be accrued.

Cameron Says 'Vote Lib Dem You Become King Makers"

Ok he didn't exactly but may as well have. Here's why.

David Cameron has admitted that there is a possibility of a hung parliament, or course says he doesn't want it, that it 'would damage UK'. Why is he so scared? Because a hung Parliament is a defeat to the Labservative Party's game of pass the parcel. Because a hung Parliament could, should and would lead to a major shake up of the politics of this country as we know it.

But his argument that a strong Government is what is needed to make long term decisions. But do majority Governments always make good long term decisions. Let's take a lesson from history. Just at random lets take the 16th September 1992 as an example. Now we need an eye witness to what happened that day to tell us exactly how long term decisions were not getting made that day.



No not the guy in the front, my MP at the time and all the Chancellor of the Exchequer the guy in the shadows. Yeah you see it wasn't a hung Parliament that was unable to make long term decisions that Wednesday it was one with a majority. The government up the base rate from 10% to 12% to 15% to the above when they pulled out of the Exchange Rate Mechanism and returned the bases rate to 10% all in the space of a few hours.

So of course the Labservatives learnt from that lesson and freed up the banks to make their own decisions after 1997. Only then of course the banks messed it up all by themselves.

You see only one party is prepared to make real changes that will prevent either of the above happening again. The Labservatives, hey just want to trim around the edges, the Lib Dems are however looking to make a radical change that will cut to the heart, a change that will make the recovery sustainable possible. The Labservatives are scared that they have lost the initiative, Vince Cable came across well in Monday's chancellor debate and now it looks like people want the Lib Dems to run the economy. Of course that is bad news for Cameron, but not going to damage the UK.

It Is the Spirit of Iron not the Lady's Leanings that Impress

It must be Liberal Democrat Spring Conference, Nick Clegg has been talking about Thatcher. Last year ahead of Harrogate he said:

"When the right won out, the reality was brutal. I remember very distinctly this sense that we were being told we should all place money above morality; put profit ahead of people; that we shouldn't worry about selling out. Because, at the end of the day, there was no such thing as society. But I looked around me and thought: no, there has to be more to life than this. There is more to us than this. Justice, fairness, community. We weren't ready to give in to that soulless, unforgiving Britain. That dog-eat-dog, get-rich-quick, look-after-number-one Britain. We didn't want to live in Thatcher's Britain.

"The false idols of trickle-down economics worshipped by Tories and New Labour alike have turned to dust."

So turn to this year and what is this in the Spectator?

Age, he claims, has taught him the point of Lady Thatcher. And, indeed, he now seems to see her as something of an inspiration. ‘I’m 43 now. I was at university at the height of the Thatcher revolution and I recognise now something I did not at the time: that her victory over a vested interest, the trade unions, was immensely significant. I don’t want to be churlish: that was an immensely important visceral battle for how Britain is governed.

But hang on, some including the right leaning press have claimed this is in praise of all things Thatcherism but read on, Nick tells you that while in the 80s the vested interest was the Unions in the noughties it is something else.

"And what has now happened to the British economy? It has gone belly-up because, once again, we have allowed a vested interest to run riot." He is talking, of course, about the banks. "They represent a vested interest. This is what I sometimes don’t understand about the Cameron-Osborne act. A real liberal believes in genuine competition, a genuine level playing field and he is unremittingly hostile to vested interests." As Thatcher was to Scargill, so Mr Clegg intends to be to the banks. "What I find so striking is that the spirit — dare I say it — of the battle against the dominance of one vested interest, the trade unions, is exactly the same spirit we need now."

So it is not a return to Thatcherism, what it is is an admiration of the spirit that fought the vested interests to look out for the majority of the people and so it is again. I could not see Thatcher, or any of her successors taking on the banks, indeed we've seen how timid some of them have been in recent years.

And before Labour misinterpret and start to spin, let us not forget who was one of the first visitors to a Brown Number 10.

The Fruit of Gordon's Character

"It is for other people to judge but I believe that character is not about telling people what they want to hear but about telling them what they need to know.

"It is about having the courage to set out your mission and the courage to take the tough decisions and stick to them without being blown off-course, even when the going is difficult.

"For better or for worse, with me what you see is what you get."

Well that is what Gordon Brown is saying should be the judgement on which people base their decision for this election. So lets look at Labour's mission over the last 13 years.

On law and order they seem to have been blown by whatever the police want irrespective of the civil liberties that they limit. So that is a course but one that many social progressives who once felt the Labour party was their natural home are wary of.

On Iraq they set out on a mission to get rid of Saddam. They certainly weren't swayed by the advise of legal and military experts that their reasoning for the invasion was flawed or illegal. We've even had David Miliband saying that UN was feeble over Saddam, that only the iron fist of the US and UK could waken them up. But Bush and Blair still kow-towed to New York to get a retrospective resolution even though they broke Article 2 of the UN's founding charter.

On tax that steady course that Gordon has ploughed. He announced he was to remove the 10p tax band. Only for it to be given a temporary reprieve. In effect he had unfairly doubled the tax burden of the lowest paid. Indeed only most earning up to about £2,000 less than the Tories want to freeze public pay everyone was worse off. While at the other end it was Gordon who made a differential in the high rate capital gains and income tax thresholds making it easier for the richest to avoid paying a full amount of tax. Yet now he speaks of a future fair for all.

As for the banks, well it got worse. Gordon refused to listen to Vince Cable, a former banker, and sailed his course of deregulation. Allowing them carte blanch to gamble the nations savings against the market. We'll be paying for that courageous path of the former chancellor for years to come.

Only the Liberal Democrats have consistently stood up for our civil liberties in the last 13 years. Only the Liberal Democrats spoke out about the illegal war on Iraq with one voice. Only the Liberal Democrats are promising to make our taxes fairer. Only the Liberal Democrats are prepared to reform the banks, yes allow the investment banks to speculate, but not at the expense of individuals and firms access to core banking services.<

Gordon Brown as the son of the Manse is no doubt aware that Matthew 7:16 says. "It is by their fruits that you shall know them." Sorry Gordon but Labour have turned out to be a rotten apple. The Tories are merely the same old sour,bitter lemon trying to disguise themselves as a juicy, sweet strawberry. The Liberal Democrats are trying to give real sustenance to our economy, it is time to build a fairer Britain.

The Blank Dishonour List By Omission

The Queen's New Years Honour's list is out [link to PDF file] and there are some interesting honourees amongst them, from Sir Patrick Stewart, through Rick Parfitt and Francis Rossi of Status Quo (obviously for long term service to three chords) to many of the unsung heroes in mundane but important jobs. But it is the omission of some of the biggest sectors of honourees that speaks volumes for 2009.

First up this is the last Honour's list before the dissolution of Parliament, of course there may well be dissolution honours handed out by Gordon Brown, but often in the past these have been increased for some of those known to be stepping down being honoured before then. With 121 MPs already announcing they are stepping down there is not a single Member of Parliament on the list.

The other big sector noticeable in its almost total absence is the bankers. Last year at this time there were none worthy of inclusion. This year there is but a solitary man Dyfrig John the former chief executive of HSBC one of the banks that did not request a Government bail out. But unlike all those knights of the discredited banks who apologised before committee, he is only getting a CBE.

On with the new year then Ma'am and in the words of Jean Luc Picard "Make It So".

Footnote for history: Civil Servants of course miss the Honours Crunch and take up 13% of the honours on offer.

Need to Get the Banks Lending Again

Figures released yesterday showed that the number of new business start ups in Scotland are down 16% on the same time last year. In Q3 2008 there were 4,598 in 2009 this was down to 3,861.

Speaking on this issue Alistair Carmichael MP said:

"These figures show just how hard the recession is hitting Scotland’s small business sector.

"Labour has effectively nationalised two of Scotland’s largest banks, but they have done little or nothing to get them lending again. This has left businesses struggling without the credit they need.

"Gordon Brown and Alistair Darling should be standing up to the bankers who did so much to cause the current recession. But instead they are letting them get away with massive bonuses while they leave Scotland’s small business sector high and dry."

There have been affects in and around West Lothian of how hard businesses have found it to secure capital from the lenders to keep afloat. There are more empty retail and production premises around now than in the lead up to last Christmas.

Speaking to some of the local retailers in Bathgate they have said that yes the turnover is affected as people are less willing to part with their money. But they are also finding it harder to get access to money from the bank to help either tide them over tough times or to expand stock levels or opportunities.

The two main banks that they use are the Scottish banks RBS and HBoS which are both owned by the people. The Chancellor has said the banks need to start acting like banks again, that means lending money to business to help aid the recovery. I know that Vince Cable is lashing out at the bingo hall banking practices that led to this mess, but Vince knows that there has to be some level of risk in lending money to business to ease our economy out of recession. The banks are not yet doing so, and so it is that new businesses are not able to get going to replace the ones that sadly have gone by the wayside.

Darling Takes Centre Stage

Today's the day that the Chancellor makes his pre-budget statement and in the six months since his budget it would appear that he has failed to get his predictions right. Industrial output failed to grow in October, which is considerably worse than Darling expected in April. Indeed gloomy manufacturers are not expecting output to increase in future months, therefore putting Darling behind the optimistic curve he tried to portray in the Budget.

The Chancellor has already said he will be protecting spending on front line health and policing, as well as education. So it is widely expected that spending cuts will occur elsewhere, as much as 15% is expected in some departments. Ironically when the Labour Government was branding David Cameron Mister 10% when he first talked about having to make cuts in public sector budgets.

There is also the awaited introduction of the Super Tax being imposed on big city bonuses to help finance the loans the Government has made to that sector, whether this is an one off or a longer term imposition exerts expect the Chancellor to announce later.

However, it is speculated that if Darling wanted to hold off until after the election to impose his plans it may be too late as Britain is in serious threat of losing its Triple-A Credit rating. It seems that he is going to have to act with the scalpel before the Prime Minister is able to go to the country.

RBS Board Adopting SNP Tactics

The SNP tactic leading into budgets and was (until it actually happened) the same about votes of confidence in their ministers to resign en masse and cause a new election they thought. Well it appears that the Royal Bank of Scotland board are to take the same approach over their bonuses.

The bank is looking to pay £1.5bn* in bonuses to its investment arm up from £900m last year. The board says it needs to pay this money to keep its top personnel with them and to keep them incentivised. Saying they need to act in the interests of all shareholders, not just the major one, a bit much after how those same shareholders were treated in recent years. Personally many of the rest of us have taking lower pay rises, reductions, loss of overtime payments, loss of bonuses with the only incentive to keep a job during the financial crisis. However, the issue does raise the issue of what type of bank the RBS is.

The Government bailed out the bank not to protect the investment arm but to protect the banking interests of the ordinary clients of the banks and their savings and banking facilities. These had been put at risk by that investment arm and its casino banking practices. Lib Dem Treasury Spokesman Vince Cable has been one of the most vocal proponents for breaking up the banking sector so that the high street banking sector that is all that most of us every have direct concerns about is separate from the speculative nature of the investment banks.

I recall when I first started studying economics the two were discussed totally separately, but soon after banking regulation was relaxed to allow both aspects to be carried out by the same company. However, maybe it is time for the Government to go back to those earlier principle to shore up confidence in our high street banks, after all you don't find an insurance company operating in the same premises as a bookmaker.

However, the issue with the bonuses is that the banks and the bankers were bailed out at tax payers expense and the government is going to look to get the taxpayers money back at some point. To spend £1.5bn of it on bonuses to staff, especially when many of those who bank with them are still struggling to make ends meet is lording it over everyone. Indeed if any other company director in any other line of business were to get a bail out from someone taking over 70% of the business in an interim agreement the profit would generally go to paying back that investor, even their own share of the profits to get out of the control quicker.

*This equates to 25% of the £6bn profit made by the investment arm of the bank this year.

Tonight Matthew I'm Gonna Be....

....David Kerr candidate for Glgasow North East, John Mason MP for Glasgow East and Stewart Hosie SNP Tresury Spokesman.

Yeah, Tam Smith SNP PPC for Linlithgow and Falkirk East is back at his Rory Bremner act, this time taking on all three without crediting any.

Today he is saying:

"Scotland's banking workers deserves more than a direct line to the breadline. These reforms must not jeapordise jobs in this industry. [Kerr see here]

"As an SNP MP for this area, jobs in Linlithgow & East Falkirk, and in the city of Edinburgh [said about Glasgow North East here*], which have a direct impact on this consitueency[sic], will be my top priority and I will speak up strongly and loudly against any threat to them.

"Since Tuesday's announcement voters on the doorsteps in Bo'ness, where I am campaigning on behalf of Ann Ritchie in the local by-election have been telling me that frontline workers should not pay the price for the problems their bosses caused.

"It is clear the best way to secure a strong future for jobs in West Lothian and Falkirk district in financial services is to send an SNP MP to Westminster to speak up for this constituency and to speak up for our jobs.

"The UK Government is the main owner of these banks and any sell off that puts this constituency's jobs or Scotland's economy at risk is unacceptable." [Compare those two paragraphs with John Mason's words here]

Tam Smith continued [apparently]:

"We must have competition in our banking sector but the potential loss of local branches and uncertainty of ordinary workers in financial services is worrying for many. [Make that Mason]

Retail workers in our banks are already facing up to job losses. A vote for the SNP will tell the UK Government that West Lothian and Falkirk District's workers will not pay for Labour's broken economy." [Make that Hosie]

Let me make it perfectly clear, many people who live in Linlithgow and East Falkirk are affected by banking jobs. Some of those that get on and off the bus with me in Edinburgh Park work in some of the banking offices situated there. Lloyds have been instructed to off load Intelligence Finance which could affect the jobs of 300 people employed at Kirkton Campus in Livingston. The 3,700 frontline bank jobs that are being cut by RBS to take 14% off their staff wage bill will undoubtedly affect others.

However, the SNP had at the initial outbreak of the banking crisis pledged money from a fictious Scottish Bank in some future independent Scotland to deal with this situation. The amount they offered was £50m which now seems small fry compared to what was needed. All the while Vince Cable had been warning that the futures of our banks was not sustainable from years before, though like John the Baptist he was ignored and his pleas almost thrown out into the wilderness.

Sadly we have got to a stage where the overstretched banks may need to offload staff to survive and protect the jobs of the majority. Other industries have also gone through that sort of situation over recent months. Not all have had the benefit of a Government injection of money to see them through so the job losses have happened earlier. Rather that merely speaking 'up strongly and loudly against any threat' of job losses, Linlithgow and Falkirk East needs an MP that will look to the future, getting those who have already faced or will face the inevitable into a job. It means encouraging jobs to come to the region, using the skills that our people have got, and a lot of recent redundancies in the area have been in skilled positions.

According to the West Lothian Courier West Lothian and Falkirk are currently ranked equal 10 out of all the Local Authorities in Scotland when it comes to unemployment. At 4.4% it is 0.4% higher than the Scottish average and 0.2% higher than the UK average. There has currently been a slip to 900 vacancies listed at local job centres, but there are 4,651 people claiming Job Seekers Allowance, that is 5 people for every job that is going.

We need to hear of real action to real jobs into the area. We need to utilise the workforce's that have been or are about to lose jobs from some of the firms locally that have been laying them of. People with IT, production and financial skills are here in our area desperate to get back into work. We need to seek out those green shoots when they do appear and persuade companies as they recover that investment here gives them a skilled and dedicated workforce. Skills in some of the sectors that have been hit are transferable to other sectors, there is more to a financial job that just what it says on the time managers, IT workers, accountants, data analysts etc are also amongst those that will be losing their works. But all will have transferable skills.

So rather than a short-sighted narrow view of Smith-Hosie-Mason-Kerr we need to get others to think outside the box, see what is available, see what they can offer. Just like many of us who graduated in the early 90s had to do we had to be imaginative it what we did next, throwing off our narrow pre-conceived ideas of where we were heading.

*Sadly again on the De Havilland subscription site, but check out the key phrases on google.

Broon's Dunfermline Sacrifice

Just been watch Jim Faulds currently still the Chairman of the Dunfermline Building Society at least for today quite rightly getting angry at the way the Government has dealt with this scenario.

He has accused the Treasury of being economic with the actualité. He said that unlike Northern Rock they did not have a Sub Prime Mortgage issue. That the losses that Dunfermline were going to announce of £26 million were less than the £36 million that the Chelsea Building Society lost in Icelandic institutions alone.

He also said that there was no exposure to the US toxic debt. Stating that KPMG has said they could be supported and sustained as an independent ongoing interest. Something that Jim Murphy then seemed to be very unsure about when challenged that they were.

He also protested at the lack of proportionality, the risk that has been being covered by the government in the banks as opposed to the lack that they have given the the Building Societies such as Brandford and Bingley and now Dunfermline. The mortgage book of Building Societies is back by bricks and mortar, at the end of this recession those assets will still exist and start to recover, unlike many of the risky investments that the Government has been bailing out for over £1 trillion of protection. When challenged on those with a worst situation Murphy only said that each situation was different (possible some of the others exist in Labour held seats).

Faulds also complained that he and the rest of the board were getting their news from the press before the FSA, the Treasury and the Scottish Office.

It appears that the Government is not prepared to stand by the Building Societies. I've even heard Jim Murphy just say that this is a short term problem. Again blaming it on the international situation, taking no blame for 12 years of UK Government mismanagement that has ended up seeing the country so heavily in debt that the worse offenders ended up at the front of the queue and were helped no questions asked in full and now those that managed to survive that bit longer are being left out to dry or being sold off. Like Mr Faulds said in answer to the first question Dunfermline is a sacrifice not a solution.

Willie Rennie MP for Dunfermline and West Fife then came on later to say it was a disgrace what Jim Murphy was saying. There has been a deal on the table from the UK Building Societies for six months and that the Government has been partially responsible and the FSA's levies are exacerbating it.

Where will it all end? Who will be next to be left out to dry?

Update: Moving unto the Euro debate on Scottish Politics and Labour's David Murray again trying to sidle away from the fact, for fact it is, that while there may have been a US element to our recession we are worse off than the rest of equivalent sized Western Europe countries. Struan Stevenson correctly brought him to task in trying to

Alternative View: Sir Fred Goodwin's Pension

Found this on YouTube and it does ask some very pertinent questions.

Loaning to Get Around Bonuses

The Royal Bank of Scotland is offering loans, against the deferred bonuses, to hard up lower paid staff who will not be receiving their expected bonus of hundreds or thousands of pounds just now. This is not extended to the investment bankers who were expecting their seven figure bonuses. No doubt these will be at the bankers special repayment rate or even better than normal, that detail is missing.

However, will the bank look kindly on customers who have had their salary frozen, not receiving their increase of hundreds or thousands of pounds? Will they go easier on issuing loans or overdrafts to help them out?

The answer is probably not. How else are they going to pay to look after their own. The RBS staff will be getting their salary increase and easily secure a loan to cover their bonuses. Many others will find it hard to secure a loan, and even if they do not at the same rate and face uncertainty when or even if they will get their salary increased.

While the lower paid staff are not fat cats, they certainly are more content cats than many of the general population.

Hands Off Our Forsests

You would have thought that a party claiming to speak for the nationalist movement of a nation would understand the mindset of that nation. Not so the SNP when it comes to the nations forests.

Almost three quarters of the respondents to the Scottish Government consultation on the leasing of a quarter of Scotland's forest were opposed to the proposal. In fact while 71% were against only 12% were in support of the SNPs plan. Is this just the latest sign of how out of touch the SNP are with reality and the concerns of its citizens?

Well as Hamish MacDonell wrote in the Steamie yesterday it is not just limited to Scotland that the SNP have lost grasp of reality. Jim Mather the enterprise Minister is still clinging to the Arc or prosperity.

So that would be:

• Ireland where the government support for the banking sector is currently 220% of GDP, it could get worse as the Banks' coverage of loans is still 5 times that amount.
• Iceland whose banking sector almost brought the prospect of the nation going bankrupt into being.
• Norway who like Scotland have oil. With a 7% drop in the price recently that is hardly going to be a stable economic structure.
• Of course Scotland's own two one point five one point two five* Banks are also the pinicles of prosperity.

So the Arc is sinking something that never affected Noah and clearly dodesn't worry Mather either. Man the lifeboats and lets hope there is a helicopter ready to rescue us like the oilworkers before we sink to fast under Nats pilotage of our economy.

*Really depends how much of HBOS you consider Scottish after the second merger.

Bank Bonuses Curtailed

The Royal Bank of Scotland are the first of the banks supported by public money to have their bonuses hemmed in. Following public outcry that the bank that was bailed out with public money was still paying out bonuses of astronomic proportions when making such a heavy loss it issued its new plan after discussions with UK Financial Investments (who oversee the Government's shareholding in banks). The new deal is (from the bank's full statement):

• No Reward for Failure: No bonuses or pay increases will be made to staff associated with the major losses suffered in 2008.
• Board Remuneration: As previously announced Board Executive Directors will receive no bonus for 2008 performance and no pay increase in 2009.
• Pay 2009: Agreement has been reached with Unite in the UK for staff which they represent below managerial grades. Ongoing discussions with staff representatives are taking place in other regions. This will mean a pay freeze for Directors and Executives in the Group worldwide, and for most staff in the US and the Global Banking & Markets division. On average, other staff will receive below inflation pay rises.
• Bonuses for 2008: No discretionary cash bonuses will be paid in 2009 for performance in 2008. Only legally binding guaranteed bonuses will be paid. Total cash bonus payments for 2009 will amount to £175 million. Therefore total cash spend overall will have been reduced by more than 90 per cent.
• Protection for lower paid staff: The existing Profit Share "bonus" scheme worth 10% of salary will not be paid for 2008, and will be terminated for all future years. An equivalent payment will be made as part of the existing monthly award package to staff below managerial grade, beginning in 2009. The average salary for this group is £18,979.
• Deferred awards: Staff who are essential to the bank's recovery and who might otherwise be at serious risk of leaving, and who remain with the Bank will receive a deferred award for 2008. The deferred award will be released in three equal annual instalments beginning June 2010 and payable in sub-ordinated debt of RBS i.e. not in
• Claw back of deferred awards: In individual cases up to 100 per cent of these deferred awards will be subject to forfeiture at the discretion of the Remuneration Committee and if future losses arise in relation to their 2008 activities . Awards will therefore be based on sustained long-term performance, not on short-term revenue generation.
• Deferred Amount: The total amount of deferred awards will be finalised following our forthcoming company announcement relating to the Group's Strategic Review. However, the total amount will represent a very significant reduction on the comparable prior year totals and the settlement overall will be as tough as that at any other comparable bank.
• Future Policy: RBS is undertaking a fundamental review of its approach to future remuneration to ensure that incentives are well aligned to the interests of shareholders over the long-term. The intention for 2009 is to follow the same approach and deferral periods as outlined for 2008 while ensuring the Group pays competitively overall with other international banks. More details will be provided in the Group's forthcoming Annual Report and Accounts.

The net effect is that there is a 90% reduction in the bonuses that were to have been paid out for now. To counter the argument that key staff needed to get the bank back on its feet will be deferred (but they'd better see a turnaround or the claw back option will take effect). The counter staff, who obviously were not involved in the decision making will get their bonus as a performance related salary increase.

With the short term bonus culture employees have looked possibly to their own pockets rather than the health of the bank when making crucial decisions. So the move is to reward for longer term objectives rather than short term profiteering. Lloys who are seeking Government money have also submitted their bonus plans to UKFI for scrutiny.

Although with millions of others facing a salary freeze employees at RBS, who will be receiving below inflation pay increases, are still luckier than many other employees, and many of the unemployed, in the UK this morning after the year the bank has had.

Lesson for RBS from Barclays

I've received an email from John Prescott updating me on his campaign for the Royal Bank of Scotland to give up their bonus. Last night it you were watching BBC's Question Time you would have heard Kelvin Mackenzie try and defend the bonuses being given by the RBS with one basis being that other banks were giving them.

Therefore you can imagine how hollow that message sounded when I read Prescott's email. In it he points out the fact that Barclays, who haven't taken any Government money, have already reviewed their bonuses for the year. Even in parts of their business performing strongly such as commodities, foreign exchange and currencies will see their bonuses shrink from the average they would have expected. But more telling is that 20-30% of their staff will be receiving no bonus at all.

This is a bank that did not have to rely on the Government for money; it is still standing on its own two feet. Yet they are having to cut back on the bonuses they are paying because of the crisis. How much more should a bank, whose employees have survived by the good grace of the Government, also reconsider just what level of bonus if any should be going to any sector of its business?

To Lose One Key Adviser is Unfortunate; But Two!

For Gordon Brown to have have lost Sir James Crosby as a key adviser and deputy chair of the Financial Services Authority (FSA) because of the sacking of the HBoS whittle blower was unfortunate. In the space of a few days to find that Glen Moreno, who heads UK Financial Investments (UKFI) which overseas the public £37bn investment UK banks, may also go as a result of his former bank was linked with tax evasion, is disastrous.

With bankers falling over themselves in the orchestrated dance of the sorrowful during the week. While bonuses are still being flaunted around in a year of disastrous returns for the bank. Then ignoring sage advise and taking part in illegal practices, just where is the rule book for bankers and is it time for it to be dusted off from whatever dusty corner it is languishing in.

These are two of the men that are advising Gordon Brown on our economy. Now I'm not saying that Gordon didn't chose well respected bankers. It would appear that he did. However, even these well respected bankers appear to have been more complacent in bending rules, ignoring sound advice and generally building up this fine mess than had previously been recognised.

It would appear that our bankers have lost sight of the job in hand. Providing a sound financial footing to allow us all individual customers, business and government bodies to be able to function. They have had their judgement muddled by greed, which when you see the size of the bonuses for success, and seemingly (from what is said) the cast iron seal protected those bonuses no matter what.

No matter how Gordon has tried to shift the blame to the American situation, what is now emerging is that the UK did nothing to cover themselves in case of failure. They followed glibly into the problems of over extension to find themselves heavily exposed when the bottom fell out of the markets and all confidence was lost.

Time for a major rethink and massive overhaul of the banking sector and its regulations and regulatory bodies.

RBS to Overhaul Pay Structure

The have received a mauling in the press and blogosphere about the amount being paid in bonuses following their Government bail out. But yesterday Royal Bank of Scotland boss Stephen Hester has announced there will be an overhaul of the bank's pay structure.

Amongst the admissions yesterday to the Treasury select committee was that pay in some areas of the business were too high. But is this too little too late in reaction to the public outcry that while others in other lines of work are struggling, the bank had announced the go ahead to £1bn in bonus payments in a year when billions were lost. However he did say that the bonuses would be being paid saying "if [he] thought it was a responsible move, [he] would not pay a penny". He said that many of the employees did exactly what was expected of them and deserved their bonuses.

However, without the back up from the Government the bank would have failed many of those employees and they wouldn't even have had jobs let alone the ability to pick up a bonus. Surely that is the crux of the matter. These bonuses are not being paid out of the bank's profits from last year, as there were none just a whopping £28bn loss, but from the public purse as we bailed them out.

During the grilling before MPs he admitted that it could take as long as five years for the bank to merely reverse the serious failing of the last annus horribilous. Whilst Hester admitted that the risk-management systems side of the business needed a major overhaul, it was their spin at the roulette wheel that overstretched the bank, he somehow still fails to see that the public cannot understand. Nor will they accept that when a business has failed so dramatically that they should have the ability to hand out bonuses of the scale that some have been mentioned. Merely claiming that no bonus of any sort would be given to people associated with the vast losses the bank had made is not enough the others have to be reviewed too in light of the current financial state of the institution.

Prezza's Petition

He may one have been technically inept but you've got to hand it to him John Prescott truly is harnessing the internet. He has even established an e-Petition demanding that the Royal Bank of Scotland do not pay out the £1bn in bonuses that are heading the way of many of their staff. Some apparently are even 6 figure sums. There's also a Facebook Group (which John failed to link to) No Ifs, No Buts - Pass on the Cut demanding the same things.

When there are people out that who have recently lost their jobs, are scared they may be next. Others whose salaries raises are under review, or have been suspended or are on short weeks or partial paid leave of absences it is an obscenity. Banking fat cats aren't prepared to pass on the full interest rates cuts. Are making it harder for the average person to borrow money and are still paying themselves top dollar bonuses when they have been bailed out with Government money.

To pay out 12.5% of the money that the Government had given the RBS as bonused shows us just how sorry they are.

Not one bit.

First the Apology Then the Fallout

Earlier today Sir Tom McKillop, former chairman of the Royal Bank of Scotland was amongst those apologising to the Treasury Select Committee at Westminster. This afternoon news came from Alan Dickinson, chief executive of RBS UK that the company plans to shed 2,300 jobs. He said:

"We recognise that any news of this nature is unwelcome at any time. It is essential, however, that we consistently review our business to ensure that we are able to operate as efficiently as possible, especially in the current economic circumstances.

"We will be consulting with our recognised trade union, Unite, and our employees throughout. We fully agree with Unite that we must keep compulsory redundancies to a minimum and we will."

I trust that as a result of this review the bonuses that they are giving out. Of the £20bn that the Government has used to bail out the back £1bn is earmarked to pay RBS employees bonuses. How much of this could be used to retain some of those 2,300 employees is a question that should be being asked by the Prime Minister as well as asking for those bonuses back.

Earlier today fellow Lib Dem blogger Charlotte Gore, who I normally consider far more economically liberal than me, claimed the Government should lay off the banks and their bonuses. There is one difference now to in the past when Charlotte worked from them. In the case of RBS the Government owns 68% of the bank and has every right to see that investment spent wisely. Why should the banks be a special case when other employees across the country are facing the possibility of a freeze on pay, not even getting their salary reviewed or may have to make further savings as their employers are feeling the pinch. If the market doesn't allow for it surely bonuses shouldn't be being paid?

When I was a Civil Servant my bonus was performance related and not a foregone conclusion, if I added value to the branch that I worked in I would be rewarded if I didn't then I wouldn't. This was a salary increase bonus not a one off payment. This year being in the public sector in an industry that is directly affected by the well being of other firms I wait with baited breathe. So maybe the banks should look at rewarding performance, but also be prudent about doing so, especially when many of their own customers are uncertain about their own financial futures.