Bolitics The New Condem Government

[Gringo]

I wonder what Phil Woolas is doing now?

Speech writer for Jack 'cheap meat' Straw?

[JulieB]

So Student Fees are to increase massively & EMA withdrawn.

Don't worry though the good news is that the top 5 banks....two of whom you own 84% of - are to reduce their bonuses this year,

to ONLY £7Billion this year.

Poor things...one wonders how they'll manage?!

[Gringo]

So Student Fees are to increase massively & EMA withdrawn.

Don't worry though the good news is that the top 5 banks....two of whom you own 84% of - are to reduce their bonuses this year,

to ONLY £7Billion this year.

Poor things...one wonders how they'll manage?!

This is pure shortsightedness. Some people may now put off refurbishing their yacht for a couple of years thus impacting the economy (of the croatian shipbuilders).

[peterms]

The younger Brown, the well-read, astute, principled child of the manse, would have rejected that course of action, because it was the wrong thing to do.

I disagree here and would use a well worn Brownism to support that: "No more boom and bust." Anyone who genuinely believes (as he undoubtedly did) that they had abolished the economic cycle simply cannot have a good cognitive grasp of the situation. He was the wrong man, in the wrong place at the wrong time. John Smith RIP.

Don't disagree with that Jon, but my point was that GB as the younger man would likely have taken a different view of the situation, based more on principle than on lobbying and cynical one-sided advice (or as some will call it, the "realism" that comes with "maturity").

[avfc89]

I've had loads of junk mail over the past two weeks for this by-election. The literature used in this election isn't a match on Woolas's

[JulieB]

So not content with screwing us all into the ground for their fees & bad advice to pay themselves huge bonuses as commented on

by David Cameron earlier....

the banks mainly Lloyds who we own mainly!!.... are now trying to bankrupt the Ombudsman by refusing to pay PPI complaint case fees of £500 a time!

What are the FSA going to do about this? A smaller lender or an IFA practice would have had it's permissions withdrawn by the regulator, when they first refused to co-operate or pay the consumer compensation, let alone if they refused to pay the case fees.....whereas the banks are being allowed to run amock.

It really is a disgrace!

http://tinyurl.com/37fnub6

[tonyh29]

So Student Fees are to increase massively & EMA withdrawn.

Don't worry though the good news is that the top 5 banks....two of whom you own 84% of - are to reduce their bonuses this year,

to ONLY £7Billion this year.

Poor things...one wonders how they'll manage?!

RBS are only paying out around £1 billion , the UK govt own 84% of them

Lloyds the govt only own 43 % of , the stories i've heard are they were only going to pay out around £300m in bonuses this year

you are Alan Johnson and I claim my £5

[JulieB]

The news I read yesterday & saw on the TV said that the bank bonuses would be about £7Billion.

Tony I think you misread my post... I said Banks as meaning collectively...including "two of whom" ie the Lloyds banking Group & RBS, Northern Rock, B & B...

In anycase £7Billion the figure across the board.

That's still immoral in my view....

As for RBS, where it has been suggested that the chief executive, Stephen Hester, might be in line for a £2.5m bonus on his own.

Nick Clegg has been on radio 4 apparently as well as Cameron.

The banks are simply too big to regulate & with the news they are refusing to pay the Ombudsman's case fees it's nothing short of a disgrace.

Two years after U.K. taxpayers invested, loaned or pledged about 1 trillion pounds to shore up the financial system, banks are set to pay as much as 7 billion pounds in bonuses for 2010, according to the Centre for Economics & Business Research Ltd. The payouts will go to fewer employees, as banks and other financial companies cut jobs at the fastest pace in 17 years, the Confederation of British Industry reported today.

Here

[tonyh29]

That's still immoral in my view....

because they are bankers or just in general ? nobody seems to care that Richard Branson is worth around £2.97 Bn for example

[blandy]

Just a point, but if they pay out bonuses, the taxpayer gets 50% tax on those bonuses. If they pay none, there's no tax. If they spend their bonuses on Goods and services, they help people keep jobs, the spending pulls in VAT...etc.

It is upside down, but the taxpayer is better off if the banks pay out bonuses. Even the shares they get, there's CGT on selling them.

It's all utterly ludicrous, of course.

One other thought is that if UK Gov't is the majorit shareholder in a bank(s) surely they have the ability to put a stop to the payment of bonuses within that bank.

[JulieB]

Doesn't Richard Branson own Virgin who are a credit card lender & have just put their interest rates up I might add?

The bankers don't just get their bonuses paid in cash though. It's true they do pay tax on the bonuses, however sometimes these get paid in shares & pension contributions etc, which are not taxed in the same manner. Yeah there's CGT to pay on shares sold but there's ways round that.... they have an annual allowance to utilise & say they sell those shares & roll them up into an Enterprise Initiative Scheme or a Venture capital Trust, or foresty etc.. voila if they hold them for a certain length of time.... no tax to pay! Up to now employers have also been able to make large pension contributions on behalf of their employees, which in fact are paid Gross & tax deductable as a business expense. The employee would pay no tax on these neither. Pension contributions have been capped but only fairly recently.

Whatever reductions in bonuses though there has been there has been an increase in regular remuneration as well for bankers.

In a word Blandy ...it appears not when you read Stephen Hester, might be in line for a £2.5m bonus on his own & both Cameron & Clegg have been publically reprimanding these accountable institutions but are they listening??!!. As a sector banks have simply too much power & there is simply not enough competition in the market place. Since the Lloyds takeover of RBS - this is now a massive institution. It's not just banking. RBS own insurers like Churchill & Direct Line insurance to boot.

I missed it but someone has Sky+ for me a TV investigation into the Banks & their bonuses, which was shown a week or so ago. Apparently this documentary highlights the different planet these people live on & the remuneration packages they pay themselves.

As soon as the regulator or the government try to clamp down on the sector HSBC for instance threaten to move abroad, so the Treasury back off. One only has to look at what's been going on with the way the regulator oversees the different sectors to see the "light touch" regulation that is still going on today. Otherwise why would Lloyds be able to refuse to pay case fees to the Financial Services Ombudsman for complaints over PPI and yet pay millions of pounds in bonuses to their remaining staff & be getting away with it??!!

[meregreen]

The difference is Richard Branson EARNED his money. He takes risks and stands or falls by his decisions. The greedy F****ers who are in charge of the banks recieve barrow loads of cash regardless of their performance. The whole thing reeks of greed and sheer avarice. If these bastards were paid by performance they would be paid nowt. Rant over.

[peterms]

Just a point, but if they pay out bonuses, the taxpayer gets 50% tax on those bonuses. If they pay none, there's no tax. If they spend their bonuses on Goods and services, they help people keep jobs, the spending pulls in VAT...etc.

It is upside down, but the taxpayer is better off if the banks pay out bonuses. Even the shares they get, there's CGT on selling them.

It's all utterly ludicrous, of course.

One other thought is that if UK Gov't is the majorit shareholder in a bank(s) surely they have the ability to put a stop to the payment of bonuses within that bank.

The bonuses are being paid with our money, on the basis that bank performance has improved after we bailed them out of the appalling mess they had created.

The alternative to paying bonuses is not to leave the money with the banks, but to take all of it back. Why feel thankful for getting 50% back in tax (assuming they don't dodge the tax, of course) when we should have 100%?

If the people getting these obscene, unearned windfalls were to spend it on goods and services, there may be some benefit. However, they are likely to use it in ways which give little benefit to the rest of us. Maybe salting some away in investments somewhere. Perhaps bidding up the price of houses (one of the significant factors in house price inflation in the south-east in recent years). Maybe buying things like gold, diamonds, yachts, property abroad. Perhaps another week skiing in Klosters. Compared to giving the money to poorer people who would spend more on things like food, the indirect benefit to our economy is likely to be a lot less.

No, we're not better off if banks pay bonuses. We're better off if we take our money back and use it to get some more people into gainful employment. What the bankers have been doing is not gainful, but damaging and destructive beyond belief, and to see them getting these payments on top of the £trillion we have thrown at them is just salt in the wounds. Take the money back, and decide whether their conduct merits criminal charges, or just dismissal; but let's not for a moment be taken in by the bullshit about how they are so vital and we can't afford to lose them.

[JulieB]

There's one thing though...at least people are aware of what's going on with the banks & getting angry, even if perhaps there's not much anyone can do about it.

Parlaiment currently has no power over the statutory independent regulator - the FSA - whose staff themselves are paid ridiculous amounts of salary, with about 100 staff earning more that David Cameron & paying annual bonuses of some £20Million! When you hear that most of them came from the banking sector & where many return after their stint at Canary Wharf ends to sit on boards of the same institutions they've failed to regulate..is it any wonder most of us who work in financial services smell a rat?!

What irks me as well is that these banks should be lending to individuals & SMEs & in the main they're not or if they are at all it's at extorninate rates.....instead RBS are financing deals like Kraft to buy out Cadbury's.

Tonight's headlines make no better reading as the government hold their hands up & concede defeat to allow the banks unlimited bonuses.

Bankers' bonuses: Blind eye to blind rage

Perhaps they'd listen if we all dumped the casino guys en masse & headed for the Mutuals or the Co-Op.

The whole thing is mental!

[JulieB]

I'm just watching Bob Diamond Chairman of Barclays who is in line for a large bonus which now can be unlimited after news the government has caved into the City...defending the banks at the Treasury Select Committee.

They have no shame..... bonuses to be paid by all whatever their history or mistakes....

State-owned bank braced to lose £20m on property deal

Tuesday 11th January 2011

A High Street banking giant is set to be the latest lender to lose a hefty sum on a commercial property deal, dating back to 2007.

Lloyds Banking Group is likely to lose at least £20 million due to the sale of a Birmingham business park to property firm Hansteen Holdings.

Lloyds TSB put £46 million into the original £58.4 million purchase of Saltley Business Park by property funds Europa Capital and Opus Land. Europa Sapphire – the Luxembourg-based company that originally owned the park before the 2007 sale – had already gone into receivership before talks over a refinancing broke down last year and Hansteen stepped in.

The recession has meant that Saltley’s annual rents have plunged from £4 million to £2.35 million and it now has a 30% vacancy rate.

Dozens of property firms are busy raising hundreds of millions of pounds to purchase cut-price properties that are coming onto the market from bailed-out banks. Lloyds is also bracing itself for a fresh £2.7 billion hit on its Irish loans following the nation’s financial rescue by the IMF and the World Bank.

This latest loss for Lloyds Banking Group follows their £200 million at the start of 2010 when the Scottish property company Kilmartin Holdings went into receivership.

Here

[blandy]

Just a point, but if they pay out bonuses, the taxpayer gets 50% tax on those bonuses. If they pay none, there's no tax. If they spend their bonuses on Goods and services, they help people keep jobs, the spending pulls in VAT...etc.

It is upside down, but the taxpayer is better off if the banks pay out bonuses. Even the shares they get, there's CGT on selling them.

It's all utterly ludicrous, of course.

One other thought is that if UK Gov't is the majorit shareholder in a bank(s) surely they have the ability to put a stop to the payment of bonuses within that bank.

The bonuses are being paid with our money, on the basis that bank performance has improved after we bailed them out of the appalling mess they had created.

The alternative to paying bonuses is not to leave the money with the banks, but to take all of it back. Why feel thankful for getting 50% back in tax (assuming they don't dodge the tax, of course) when we should have 100%?

If the people getting these obscene, unearned windfalls were to spend it on goods and services, there may be some benefit. However, they are likely to use it in ways which give little benefit to the rest of us. Maybe salting some away in investments somewhere. Perhaps bidding up the price of houses (one of the significant factors in house price inflation in the south-east in recent years). Maybe buying things like gold, diamonds, yachts, property abroad. Perhaps another week skiing in Klosters. Compared to giving the money to poorer people who would spend more on things like food, the indirect benefit to our economy is likely to be a lot less.

No, we're not better off if banks pay bonuses. We're better off if we take our money back and use it to get some more people into gainful employment. What the bankers have been doing is not gainful, but damaging and destructive beyond belief, and to see them getting these payments on top of the £trillion we have thrown at them is just salt in the wounds. Take the money back, and decide whether their conduct merits criminal charges, or just dismissal; but let's not for a moment be taken in by the bullshit about how they are so vital and we can't afford to lose them.

All true. If only that were what was being chosen between. I fear though the context has gone no further that "we need lots of bonuses because we di great" and "no you don't, you caused a big mess". i.e. the choice being considered is between paying 7 billion in bonuses, or paying a smaller amount. Not between paying bonuses and returning money to the taxpayer.

The argument that they earnt their bonuses (at RBS and Lloyds) is hard to sustain. The improved financial performance came about a) as a result of being underwritten by the taxpayer - without that they'd have gone to the wall.

as a result of not just a few people at the top, but everyone working at the banks

c) as a result of making mass redundancies

There is no measure by which they should be getting bonuses (unless within their contracts) at RBS or Lloyds, but within the narrow confines of the gov't to bank debate, the gov't will be better off financially if they do get paid.

[blandy]

Perhaps they'd listen if we all dumped the casino guys en masse & headed for the Mutuals or the Co-Op.

The whole thing is mental!

I did that. Moved to the co-op about a year ago directly because of this whole thing. thoroughly recommended, too.

[JulieB]

Good for you Pete. I think I'll follow your lead when possible. I've had a Co-Op Visa card for years which makes a donation to the RSPB when I use it.

As if reading about the government cave in on bonuses this morning, wasn't enough to make the tea & toast a little more indigestible not to mention news of Lloyds Property deal collapse - We now find out we the taxpayer are to be fined £2.8M by the FSA for poor customer service!!

FSA fines RBS and NatWest £2.8m

11 January 2011 10:12 am | By Natalie Holt

The FSA has fined Royal Bank of Scotland and NatWest £2.8m for responding inadequately to more than half the complaints reviewed by the FSA.

The FSA’s investigation found there was an unacceptably high risk that customers may not have been treated fairly due to a number of failings with the way the banks’ approach complaint handling, including delays in responding to customers.

The regulator also found poor quality investigations into complaints, with complaint handlers failing to obtain and consider all the appropriate information when making their decision.

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It found correspondence was sent that failed to fully address all of the concerns raised by customers and failed to explain why complaints had been upheld or rejected.

Finally the FSA found that customers were not receiving their Financial Ombudsman Service referral rights within the appropriate time period.

Of the complaint files reviewed by the FSA, 53 per cent showed deficient complaint handling; 62 per cent showed a failure to comply with FSA requirements on timelines and disclosure of Ombudsman referral rights; and 31 per cent failed to demonstrate fair outcomes for consumers.

The FSA’s investigation also found the banks did not give complaint handling staff adequate training and guidance on how to properly investigate a complaint.

Monitoring of complaint handling in branches and the management information produced was found to be ineffective; and there was a failure to ensure complaint handlers properly reviewed complaints.

FSA managing director of enforcement and financial crime Margaret Cole says: “We expect firms to treat customers fairly and that consumers can be confident that their complaints will be dealt with properly. The failure of these two high street banks to deal adequately with complaints put consumers at unacceptable risk and the fine of £2.8m reflects this.

“The poor complaints procedure of RBS and NatWest came to light during our review of complaint handling in major banks. The review showed that banks need to make major changes to handle consumer complaints fairly and the FSA will continue to take appropriate action to ensure these changes are put in place.”

The failings in the complaints handling processes of RBS and NatWest were uncovered during the FSA’s review of complaints handling in the UK’s major retail banks. As a result of the thematic review, five banks have undertaken significant action to improve their complaint handling.

The FSA published a consultation paper on September 30, 2010 on changes to complaint handling requirements, which aims to increase the quality of complaints handling across the industry and increase senior management accountability for complaints.

RBS and NatWest have agreed to make significant changes to their complaints handling arrangements.

The FSA has required RBS and NatWest to work with an independent skilled person to undertake an extensive review of all parts of their complaint handling arrangements. The FSA is also working closely with the banks to ensure that the changes will lead to effective improvements.

In a statment RBS says: “We acknowledge the findings of the FSA investigation. It confirmed shortcomings in our routine complaint handling that we assessed in our own internal review and which we are committed to putting right.

“We recognise the importance of complaint handling for our customers and are focussed on addressing the root causes of complaints.”

FSA fine RBS/Nat West £2/8bn for their appalling Customer Complaints Handling

Hmm wonder what's going to happen to all these fines the FSA are doling out as well? Surely not to help pay more huge salaries & bonuses!

[snowychap]

'Neighbours from hell' face faster eviction

Problem neighbours face swifter eviction under plans set out by the government today.

The housing minister, Grant Shapps, said it currently takes up to more than a year to remove known troublemakers, and promised to make it easier to take possession of their homes.

Probationary tenancies would also be toughened up, and a central unit would target awkward residents.

"For too long, too many social tenants have lived in fear of neighbours from hell, whose nasty and vicious behaviour blights their neighbourhoods," Shapps said.

"Victims and witnesses often have to continue living side by side with the perpetrators, while action to evict them drags on for many months and sometimes years. That's why I want to give hope to these victims that this can and will be stopped."

Shapps said he would introduce a mandatory ground for possession. It aimed to speed up the process by making a conviction for housing-related antisocial behaviour automatic grounds for eviction in the county court.

"I want any tenant who comes forward to report antisocial behaviour in their area to get the support they need and deserve. And I want landlords to use the full range of powers at their disposal to tackle this menace head-on, so that the disruptive minority of social tenants don't make everyone else's lives a misery."

Shapps said he and the Ministry of Justice were exploring whether there were any other unnecessary obstacles slowing down the court process.

The government will clarify that housing associations have the same rights as local authorities to impose probationary tenancies for up to 18 months – rather than the normal period of one year.

The Department of Communities and Local Government (CLG) highlighted victims of "neighbours from hell", including Wendy Glover from Birmingham, whose neighbour regularly made false complaints about her and her friends to police, housing teams and the press.

The individual threw petrol over one of Glover's friends in 2006, and did not stop his threatening behaviour even after receiving a criminal conviction and a two-year probation order.

The shadow housing minister, Alison Seabeck, said: "Nobody should have to live in fear of their own neighbours or suffer problem families on their street or estate. That's why the Labour government introduced tough powers to allow councils to evict individuals or families causing ongoing antisocial behaviour in a community, and invested in community-focused neighbourhood policing teams to respond to these sorts of crimes.

"It's important that local authorities encourage people to speak out and that councils use the many powers already at their disposal effectively.

"Responsive local policing is also vitally important and the Tory-led government's plans for cuts of 20% to police funding will put tackling antisocial behaviour at risk."

On the face of it, it might sound all very well. That the government are 'dealing' with something and they might be (though there have been some questions raised about mandatory possession) but this is coming from the same housing minister who, very shortly after taking office, scrapped the idea of introducing a scheme for landlords to tackle the problem landlords on the basis that (if I remember correctly) 'the vast majority of tenants are happy [with their landlords]'.

I'd hazard a guess that the 'vast majority' of landlords are happy with their tenants, too, but it doesn't prevent this tosspot from looking to introduce laws to deal with bad tenants (no legislation to deal with bad landlords - 'there's enough already' apparently).

I also wonder (as with all legislation) how it will be drafted and interpreted. The skeptic in me does not rule out the possibility that this may have something to do with the intended changes to HB, social rents (to intermediate rents) and the intended change to short term tenancies in the social sector, especially this bit of the article:

The government will clarify that housing associations have the same rights as local authorities to impose probationary tenancies for up to 18 months – rather than the normal period of one year.

Laying the groundwork whilst the lying party help them do it.

[peterms]

... the narrow confines of the gov't to bank debate...

Narrow indeed. I see no real national discussion of what we need from a banking sector and how we intend to see that our needs are met.

I think most people would agree that we need some mechanism for people to be able to save, and for others to be able to borrow. In particular, we need to ensure that people who want to borrow in order to undertake useful activities can do so - borrowing by SMEs to expand and employ people, for example.

Every time representatives of SMEs are interviewed, they confirm that borrowing hasn't got easier, in fact it's got harder. So despite the truly staggering amounts we have pumped in to the banks, we seem to get zero compliance with our requests that they should increase lending and stop the silly bonuses. The government seems content to make a few comments about wanting to see more lending and less bonuses, but to do nothing at all to make that actually happen.

If the banks won't undertake the only socially worthwhile activity which might justify their existence, then the government should bypass them. Either channel all the funding into places like the Co-op and mutuals, or else set up a national bank, or both, with the requirement that these banks do what we need banks to do, not speculate in gambling on non-existent assets. Provide proper regulation and backing for worthwhile banks, leave the speculators without any public backing and let them entirely fund the losses they make. And it would probably be a good idea to extend the depositors' guarantee only to those banks judged to be fulfilling a worthwhile function, and exclude the casino banks. That would encourage depositors to move their money to useful institutions, and thereby increase the funds available.