A Week Is Along Time

They say a week is long time in Politics - sometimes it is just not long enough.

As Tony Blair sets off for his first visit to Gaza as he has been so busy earning money elsewhere, Fred Goodwin is kicking back on the next week of his well-negotiated retirement and we discover that simple calculations put the top up of his pension pot at some way higher than first anticipated. It was reported last week that his pension pot was topped up from £8m to £16m to pay his £693,000 per year pension for life from his current age of 50. Sadly, as usual, the Government got the number wrong and at current projections, Independent Financial Advisers like my wife, immediately said he would need double the pot and sure enough that's what is estimated.

A mere slip of the finger on the calculator by Darling, Myners and Brown cost us a further £16m in a short negotiation. If only they had more time.

But the situation should be solved any time now as Harriet Harman has stepped in and warned Fred Goodwin directly that he should not 'count on' keeping his pension. Once again, it is a super-sound bite by Harman designed to increase her popularity in the slow process of building a bid for the Party Leadership. Sadly, it has already been said to no effect by Darling and Myners but she got the last word and that's what counts.

Fat Finger Syndrome

But that's nothing. Spare a thought for the UBS Trader who had 'Fat Fingers' and inadvertently pressed the wrong buttons to place an order for 3 trillion yen ($31bn or £21bn) when he meant 30m yen. Everyone had a good laugh and allowed him to pull the order.

If only we could do that on our Government's idiotic mistakes on failed bank executive's pensions.

Big Number Syndrome

It seems Gordon Brown has got obsessed with big numbers. It won't take millions to solve things but billions every time so when Goodwin talked of wanting no pay off versus the billions he lost, no one bothered to look at the millions he asked for topping up his pension as he would only get paid less than a million a year. It's that simple - Brown, Myners, Darling et al all thought it was a fair deal. It's only when you stack it up to what the average teller earns that it becomes significant and that's the problem.

You deal in large numbers only, you forget the detail.

It's rather like watchdog chiefs and Government Advisers. You wouldn't want cheap ones as that smacks of lack of intelligence. But then we had Lord Turner and Hector Sants wheeled into the Treasury Committee, a more Lily-livered pair of obsequious twerps you could not have found. They nodded and cow-tailed to the Government and toned down their approach to banks so that 5 out of 10 major ones went bust. The incompetence is shameful, their excuses even worse, yet incredible failure is rewarded. They did what they were asked to do so they keep their jobs and lucrative salaries and benefits, a sure sign they did exactly as Darling and Brown asked of them.

Can we blame them? Yes - but once again, the Chancellors get away with total negligence.

Rewarding Failure

One absolute fact of this Financial mess we are in is that there is money in failure - both here and in the US. It is a far cry from the performance-related culture that business has tried to portray and Government force on workers.

As millions in Britain face a Big Freeze on pay, it is really heart-warming to hear that bankers who blew billions on poor decision-making like Fred Goodwin are set up for life. On top of Goodwin, the man who is widely blamed for blowing HBOS's billions via poor Corporate lending, Peter Cummings, walked away having 'retired' on a pension of £5,000 per week. Andy Hornby, ex CEO of the same bank, was dismissed and then retained as a 'Consultant' at £60,000 per month until he was shamed into waiving it.

How Cummings was allowed to choose 'early retirement' at 54 and get that kind of pension is once again negligent by the Government which now owns 43% of the newly merged bank between Lloyds and HBOS - yes the one where Brown personally intervened to see it through and then bail Lloyds out.

Time and again we hear of these 'minor' mistakes by the Government in the bank bail outs - how could they keep on top of the detail? Well, that was the whole point. The reason why we need a bail out is that there was negligence on a mega scale - now we see equal negligence in the solution. So we must ask the questions - where will all these billions go? How did you come up with these numbers and what will the money be used for - line by line?

Because right now, all we hear about is fat cats getting paid lots of money for failing, Government not being on top of the situation, thousands getting laid off and no credit feeding into the system. It has been an utter, disastrous failure on a scale too big for most to comprehend. But we understand the bits about Goodwin, Hornby and Cummings all too well.