Is Curbing Executive Pay the Right Thing to do?

Vince Cable is in his element. He has the sort of face that seems to say he has it in for someone and he has. In his line of fire are the executives of public owned companies and he is proposing to curb their pay. His reasoning is that over the last few years the combined performance of the top companies in Britain in terms of share price has been static at best while in that period executive pay has risen 13% each year, every year. He has a point.

Or has he? After all these companies have survived a recession, haven't they? And we should be glad of that. Besides, the incentive schemes that executives may be on could be bottom line related and we all know that share price has not always reflected the actual performance of companies in terms of profit making but is more a barometer of the market generally - perhaps more exactly, the sentiment of a select few traders of shares in the world and dastardly computer systems.

It also belittles how a company may be managed in terms of its performance measures. After all, some companies may be going through a transition and require large investment and less profit for a while, others may actually measure profit per head which may increase despite overall profits decreasing. Key Performance Indicators may vary from company to company depending on market conditions and just looking at share price is a very narrow way of assessing the overall success or lack of it for companies. But Vince Cable does have a point.

We have seen spectacular pay offs for executives who fail rapidly and monumentally - take Fred Goodwin for one. But it is becoming the norm. The faster and more effectively you fail, the more you can get in terms of a severance package - so why succeed? This is something most of us find abhorrent in modern day business.

It would seem the way forward being proposed is to reward long term share performance and to let shareholders have some kind of binding say in the matter. That's not always practicable. After all, the significant shareholders in companies may be pension funds managed by well-off mangers who actually only look at a short window of up to 5 years maximum. Why would these significant shareholders vote against a pay award if there are not in for the long run? It may be fanciful to believe that small shareholders can actually club together and organise a revolt that's binding as there may be thousands of individuals to organise.

And what happens when the markets recover? Business will boom and everyone will want the most hung-ho, highly rewarded executive no matter what. Worrying about exact pay now is only a symptom of the austere times we are in. When Britain's back on its legs, no one will worry how filthy rich an executive gets so long as we are all earning something. Isn't that right?

Anyway, lets' get to the nub of this matter. What we are all unhappy about is not so much executive pay but the pay of a thin wedge of incredibly well paid people in the finance sector. In truth, the finance sector only accounts for around 9% of our GDP, yet there is a disproportionate amount of money earned by specific staff within that sector, nearly all working in the City. These are the people who over the last 15 years have hardly increased share price, netted out the profits of their companies to zero at best and in many cases drove their companies to the brink of oblivion. Yet in that same period they earned on average around £3m each and it is rising this year to around £4m each.

Let's face it, these are the people who have made sure that we have extra tax to pay for the next 30 years. Even as we speak, the CEO of RBS, Stephen Hester, will receive a substantial bonus even though the value of our 83% holding in the company is still showing over a 40% loss.

These companies and their high earning staff remain untouchable. They are supposedly regulated by the FSA whose own staff actually received bonuses as they presided over the implosion of the British banking system and their response was to pick on the array of Independent Financial Advisers and drive most of them out of business while bank executives named their salaries and bonuses despite owing us a fortune.

No, Vince, you are looking in the wrong direction. Focus on what's really wrong first before hacking at the general melee of executives. There is a specific, massive problem that affects each and every one of us because we underwrite their failure. We have skin in the game. Our call is to pick on bank traders and executives first - curb the way they earn, how they earn, what its paid for and what they can trade. Then pick on the other guys who also do need curbing too.

The price of failure in banking is always laid upon the general retail banking staff and the taxpayer. And failure wins bonuses. With logic like that, banks should be the first port of call.

Finding Neverland

It strikes me that the Pre-Budget Report amounted to nothing.

Largely, we were told that the borrowing will be higher than the Government expected this year - which we expected as they keep getting that wrong. Taxes would rise a little and there were some increases in benefits. A few tinklings here and there and that was it, barring the pathetic headline grabber about taxing bank bonuses.

The Green stuff needs to be applauded - let's hope it translates into real initiatives for people, homes and cars. But that really was it.

The detailed, departmental spending review has been postponed until after the election - VAT was confirmed to rise to the old level and there was an increase in the state pension, all expected.

In the face of the worst financial position since World War II, we seem to be doing nothing. Neither stimulating growth or cutting costs - it's as if it is business as usual and nothing untoward has happened. Am I the only one who things we are in crisis?

I suppose the pattern is set - there will be a few grandstanding taxes on the rich which will raise little tax in the great scheme of things while there will be death by a thousand small incremental tax increases for the rest of us. This follows the pattern of this Government - we already are the most taxed British populations in history, so a few more pennies added here and there will only be mere rabbit punches on an already numb body.

Vince Cable called this a 'Missed opportunity' - that about sums up the last 12 years really. To my mind, it's a lack of decisive action in the face of the biggest financial disaster not caused by a war in the country's modern history.

It Can't Affect Us Chickens

'Nightmare on Downing Street' could be the title of a new movie on the life of Gordon Brown. It would be a sad story of a man who just could not interpret simple facts and kept muttering to himself, 'It can't affect us chickens'.

Despite the most pessimistic of estimates by the most gloomy of economists who predicted that we would, Britain has failed to emerge from recession for a record sixth successive quarter. The hollow words of our Chancellors, past and present, as they pointed toward how strong Britain's finances were, how we could avoid a recession, how a recession could not affect us so badly and how fast we would emerge from recession are lost in the vapour trail left as France, Germany and Japan left recession status last quarter.

The fact seems a nightmare in itself. Despite spending £175bn on creating new money and £1.4 trillion on bank bailouts, our economy shrank again by 0.4%. There may be some revisions up or down but the reality is that this contraction defied all best estimates. We are getting into the habit of getting sums wrong and forecasting badly as our team seems to continually under estimate our borrowing requirements as each month we have to go cap in hand for more money.

There cannot be any shying away from a stark truth. The country's finances are a mess and the remedies chosen to right the situation are either wrong or simply have not worked. Meanwhile, in the banking sector, which we handily threw a massive lifeline to, they are partying as if there is another credit crisis to come. Banks are reporting plenty of profits, hiring new whizz kids on guaranteed bonuses and swelling their bonus pools, telling us that this is a good thing.

It is now abundantly obvious that Britain's bailout plan actually tackled only one part of the economy - banking. What's worse it righted the part of the sinking ship that had directly caused the credit crunch - it has not had any effect on the kinds of banking required by real people. It has given unlimited chips to the casino bankers to go back to the table and blow it all again, as they inevitably will and then come back to ask for more. Each time they do, the gun they use to point at our heads will be ever more deadly as Britain fast runs out of ways to raise the money.

The chilling fact is that after 6 successive quarterly contractions, Britain is now lurching toward severe danger levels of finance. As of this week, Quantitative Easing is spent and in the new year the VAT decrease is reversed. There is only one place left to go as the Government repeatedly defy the facts of having to make cuts and that is to go back and raid the taxpayers' pockets again.

With an election due in June, it's not good practice. But as time runs out for our finances, Britain needs money and fast. The time for action is actually long past and each day we avoid making tough decisions on saving money or finding new cash will costs us more in the long term.

The economy has been compared by Vince Cable as a person suffering a heart attack and we are now stabilised and preparing for recovery. I would say there is a severe danger of MRSA in the analogy.

This Government has been guilty of monumental mis-management of our finances and their remedies in the face of almost ruin have been wrong. At some point the penny may drop for them but until then, any recovery we have will just be a prelude to another crash. In our analogy to a heart attack victim, should the victim recover, sending them home to continue to eat, drink and smoke in the same way as before will only bring on another heart attack.

In our case, we haven't yet left hospital and we are already smoking again.

What Makes You Vote For Who?

Party Conferences are the pinnacle of excitement for most Party Activists - a few days in a coastal resort geared for retiring couples listening to waffle after guff is the height of ecstasy, roundly marked by sore hands and a croaky throat at the end.

The Lib Dem Conference has been about as inspiring as a pound of wet tripe and yet bits caught my eye. It seems that both the Conservatives and the Lib Dems are going for the youthful, energetic, almost uncontainable excited kid in a candy store look whereas Labour, having used that formula to formidable advantage in 1997, have the brow-beaten, haggard look of a man who cannot get out of the whole place fast enough.

It made me ponder - do looks have anything to do with how we vote?

Well ask John McCain whose retired diddyman look did nothing against the smart, debonair and refreshingly earnest, but with a smile, looks of Barack Obama. The awful attempt to 'put lipstick on the pig' by introducing a complete unknown, and as it turned out a liability, in Sarah Palin as running partner was a poor attempt to divert eyes from the aspiring but ageing president wannabe. Looking back on it, Obama's words sounded very compelling, prophetic even, and yet when you delved into the detail it was more in hope than with any kind of practical substance, which is very reminiscent of Tony Blair all those years ago. He rode in on a wave of 'Cool Britannia' and it lasted a long while having inherited as good an economy as any incoming PM could wish for and everything looked rosy for a good while as we all enjoyed prosperity.

But execution is the key to success - great plans are just great plans until they are acted upon with dedication and accuracy, making sure all issues that arise are dealt with. So many of the ill-thought policies of this Government have been put into place on the wave of popular opinion without any real substance to them and enacted by people who had no idea what they were doing. Obama may yet suffer the same fate. If people cannot share your dream to the nth degree then they will get the practical bit wrong - but maybe the dream had not been thought through to account for all the possible outcomes.

Yesterday I heard that idiot Lembit whatshisname on the radio who was having a great old time at conference. 'Lib Dem is all about outcomes,' was his little strapline and he claimed boldly that we should not force incoming migrants to learn English as that was imposing on their civil liberties. Then a lady came on the phone and slaughtered him within seconds homing in on the fact that we have 'bubbles' of unintegrated society as many migrants just talk amongst themselves and do not engage with the local population. When Lembit tried to argue the point, the lady pointed out in her superb English that she was an immigrant too and she saw it with her own eyes.

It exposed that fact that so many MPs engage in 'Thought Experiments' with Think Tanks or committees and try to dream up policy by homing in on the 'outcome' of their own choice to 'sell' to the nation as a soundbite. Lembit's next one was a classic on the point that we are a conservative society only because we are nanny-ed by the state and so we cannot see, as a for instance, that if we made legal Class A drugs like heroin or cocaine legal and available via the NHS, then we could reduce crime by half. It was a brilliant notion. In the same vain, we could produce an amnesty for all murderers and issue them free knives to kill people and then perhaps the fun will have gone so much that they won't kill so often. The logic that we should not only legalise high end drug taking but subsidise it by making it available on the NHS is pretty stupid, perhaps we should make alcohol or tobacco subsidised substances also. But the premise itself is abhorrent to most people - we want to tell young people drug taking is bad for them and therefore wrong, yet we legalise it. Further, Opik's premise that it would half crime was complete guess and theorises only that a great deal of crime is committed by drug addicts who commit crime to fund their habit. By legalising and subsidising drugs was his 'guess' that those people would no longer commit crimes. While it may be a fair assumption, in practice it may not be the case. Such guesswork, in attempting to prove its point, may actually have several unthought of and undesired effects, while the British public would have to swallow its feelings on having to subsidise the taking of hard drugs to satisfy the whim of a group of politicians who 'thought' it was a great idea.

It brings into stark clarity why the Lib Dems are unelectable, yet the earnest, youthful features of its leader may con us all into thinking he is progressive and forward thinking. A bright new, young future. It's all spoilt by the main spokesperson being Vince 'The Enforcer' Cable who looks like one of these sidekicks for a movie baddie.

And then there is David Cameron, epitomised by the Private Eye cartoon as an ex-Etonian, fresh-faced lad and toff full of ideas while also pointing the finger at the Government and shouting negative taunts. In the background lurks 'Chief Snitch', George Osbourne, who breached the rules of the workings of the super-rich by ratting on Peter Mandelson attending meetings on Oleg Deripaska's £80m yacht by stupidly forgetting he had to have been there himself to have witnessed it, casting equal suspicion on both - suspicion that was carefully swept under the carpet by both sides as the powerful Rothschild family members subtlety yet forcefully reminded everyone who keeps them in power.

Cameron has failed to make the impact he desperately wants despite his attempt to communicate with the youth by using hip and almost slang language. Again, much of the cerebral work has to be left to former heavyweights like Ken Clarke or the newly invigorated William Hague but the Conservatives are a long way off the pace of a decent opposition and they are only really so popular because the present Government has fouled up so royally.

But do youthful looks and attitudes actually win votes? Do we now value ideas and hip-language more than the voice and looks of experience? Do we take 'Thought Experiments' on ideas at face value? The fact is that many of the great 'Thought Experiments' by the Labour Government, particularly on spending on NHS, Education and transport has got us nowhere and their ideas on the economy have virtually ruined us as a nation. In 12 years in power, we have more unemployed than when they started and a budget deficit that is fast getting out of control. We are faced with drastic cuts to the services they heartily 'invested in', we partially or wholly own 5 High Street banks in order to save them, we have a green policy that is suspended while we sort out the mess and and we have a potential disaster on pensions only a short step around the corner as many on the cusp of retiring have seen their future wiped out and millions more will follow due to inept policies and lack of planning.

Britain is certainly on its knees - whether it will beat the count is yet to be seen. All bets at the moment are on preserving its status as a financial super centre - if the City of London loses that status then Britain could be all but finished. It started under the Conservatives but Labour somehow loved it, but manufacturing has been systematically dismantled in this country while the Finance industry has become more powerful.

Fresh faced ideas are vote winners on the whole. The smiling, confident face of Tony Blair guffawing at Hague's election stance on immigration and the like is a distant past yet how it has come back to haunt us in strange ways as our population rises to 61m and the net increases are mostly down to new arrivals, even this year as births by new arrivals played a huge part. But can Cameron do something special to rescue us? The policies he espouses certainly don't seem to have substance or detail backing them and seem as hit and hope as the Lib Dems. But we need a change from the complacency and hubris of the last 3 years at least.

It is easy to be cynical about politics, particularly after the extraordinary furore over expenses which we have not really flushed through as most MPs just did not seem to get the whole issue on breach of trust. Still today, many remain as MPs when ordinary people would have either resigned or been sacked and the simpering face of Hazel Blears ,as she held up the cheque she fiddled the HMRC on, epitomised the lack of accountability they all suffer with. She broke the law - it is very simple. The new furore surrounds another Labour darling, Baroness Scotland who, having concocted the laws on employing migrants, was found to have cut corners herself to get cheap labour and employed a migrant without properly checking. As with so many laws today, the onus is on the individual to do the Government's work and how gratifying it is to see how easy it is to become a 'criminal' in today's society for failing to think of everything. Should she go? Well, you live by the sword so you should die by it. But Baroness Scotland will not go - careful handling by the Spin Doctors will 'draw a line' under the affair while she will resolutely claim that an oversight caused the problem - but if only the law helped every citizen in the same way. If only bosses up and down the country allowed people to repay expenses with no punishment, if only the HMRC forgave the odd 'oversight' on taxes and let us carry on. If only being sacked twice would not appear on our CVs for dubious dealings as it does with Peter Mandelson.

That's the world of politics. Maybe fresh faced new guys are less blemished by the past but if Tony Blair's 'loans for peerages' and 'convicted felon of a financial adviser who bought them two flats' are indicators, so too are David Cameron's over-zealous wisteria cutting. The fact is, all politicians have to be a particularly thick-skinned and dubious types to actually want the job.

Fresh faced or not.

Where Will You Go To, My Lovelies?

Over the weekend some 100 public figures lobbied the Chancellor, Alistair Darling, to curb the 'excessive pay packages' of the few, elite high earners in the banking and financial system, describing them as 'Masters of the Universe'.

The Chancellor himself, in fairness, had already fired a few warning shots about curbing some of the bonuses and particularly guarantees, which is a perennial sore point, claiming he would give more teeth to the FSA to impose tighter rules. He has a problem here as the FSA is crammed full of ex-finance types who bear allegiance to their former colleagues - or worse still, they are the failed bankers who were not competent enough to dip their snouts into the trough effectively and so are not quick-witted enough to catch the banks out while harbouring petty grudges.

It boils down to what the rules are and how the FSA and Government allow banks to operate within them. We have already seen a spate of neat tax avoidance tricks announced by clever accountants on the web who will help anybody who earns above £150,000 next year to minimise their tax bills with some shabby tricks on paying into new companies, some of which are not imaginative enough to scare the HMRC. But it will be the banks who become the most devious as they are absolutely obsessed by the idea that if they limit the bonuses of their 'Top Talent' then they will have a mass exodus of the high-flying high earners to places where the pay is better.

And so where will these little darlings go?

Well first of all, do not underestimate the ability for banks to invent clever schemes to get round the issue or for us to forget the fact that the Government is currently paying around £11m a year in fees to investment banks for advice on the whole issue, let alone around £29m in legal fees. Certainly we may see more of their top traders become non-domiciled so at least more of their 'hard-earned' bonus is spirited away from the thieving hands of the Chancellor. More likely, we will get dummy companies set up and these will be paid lavish 'Consultancy Fees' - and these companies, like strange quantum particles, will exist but briefly to liquidate cash on a capital dispersal idea and avoid things like National Insurance. The fact is that there is nothing in the FSA or Government thinking about 'Consultancy Fees' and I dare say we shall see more of this flying around. In the short term there are stock options which are handy as the market gets back some of its old ground but that is likely to not appeal in the long term as traders like ready cash and they certainly don't want to be held accountable for any collapse in the bank's profits or share price - they have proved that conclusively already.

There will be plenty of 'Guns to Heads' at the moment as the profits clock up on the banks' bounces and traders will be dismissive of their employers' excuses. They will be playing the 'If you don't pay, I'll go to somewhere that will pay me what I'm worth' cards. Theoretically, they have a point as the problem will be that if Britain acts in isolation then they will lose these little mites to other banks who are out of reach of our 'punitive' bonus scheme allowances. This will mean that British banks will become uncompetitive in the 'New World Order' that Gordon Brown talked of.

As the Government wants to show the public it is curbing the excess and high risk strategies by banks, but they do not want Britain to lose out as so much of our economy depends on earnings from the City - there is a dilemma. One way would be to impose windfall taxes on every financial institution for the next 10 years in order to pay back what is generally owed. Of course, most banks would then put their HQs outside of the UK and thumb their noses at us which would be counter-productive but it may be a start that each of them pays exactly what tax they should do from now on and any scheme to avoid tax is fined double the tax owed. It still doesn't solve the problem.

Traders will depart for sunnier climates - to the US or Asia, wherever the banking system allows excessive bonuses to be still earned. This is where I see an advantage. Let them go.

Skimming Off The Highest Risks

You see, the whole system was brought to its knees by the actions of a comparatively small group of people employed in high finance. They say in Iceland you could identify just 6 people who actually nearly bankrupted the whole country and in the City you could draw up a similar but more extensive list. I would do so and I would say to those who think that they can get jobs in other countries, in banks who are willing to pay excessive sums - go. It may well produce a 'Premier League' of banks but frankly it will put all the risk into one area. UK banks can then recruit a new wave of traders who can be weaned on sensible, lower risk banking that never exposes Britain to the kinds of problems we have seen in the last two years.

By skimming off those with the highest risk-taking index and letting them go elsewhere, we make Britain a safer place. And we need it. Should we just lurch into another credit crunch and recession in the near future then we risk simply not having enough resources to bail ourselves out with. Already there are predictions from established sources that by 2014 that British Sovereign Debt could be almost 100% of GDP and we will be paying for every penny of that borrowing, roughly double what we pay were paying for last year.

So my solution would be to let the little blighters go to wherever they think will pay the money for them. Go exercise that egotistic point of view they have that they are 'Masters of the Universe' and far more more intelligent than the rest of us. At some point, I dare say that someone will realise that in order to keep the scam of their elaborate schemes going you need every bank in the world to be as bad at mathematics equally and hopefully one or two will find out how to use calculators and realise that all does not add. Perhaps it will be those banks who first realise that it may be better to trade things you know the value of who will break away from the schemes and focus on logic rather than hot air. Perhaps that is what will help heal the banking system and make it stronger for the future, and perhaps by having a few banks break away more will follow leaving only the very high risk banks in one place. And if they want to be the super-rich ones and pay incredible bonuses, then fine.

Let's just make sure it is the British banks that lead us out of the high risk zone and the first step will be to unequivocally stop high bonuses being paid on high risk business; the second will be to curb high risk business - full stop.

Is The Telegraph Going Too Far?

Dairy Entry: Day 18. Can't take much more. Running out of will to vote. If only someone had any contrition we might be able to make it a few more days to the MEP Elections. Teddy did a Captain Oates this morning - said he was going out to buy the paper and we haven't seen him since. Oh no, not Darling, Blears and their accounting fees.........

It's all getting a bit much and on Sunday I threw down the paper in disgust at some blatant lies. There was a whole article on St Albans and how the whole town of apparently well educated snooties were up in arms at their local MP in the trough, Anne Main. The horror of the lies was too much to bear for a town not known for its protest.

While I believe the description of the city of having the most pubs per head of capita is true, they somehow described it as being some bastion of the upper class. Having lived there for several years and played rugby at Old Verulamium RFC and witnessed grown men hurling themselves from beams into the arms of waiting drunks, I have also seen men with their ankles tied together and trousers down hopping across the pitch with flaming newspapers up their backsides. Therefore, I think several of us would disagree with the accusations of high intelligence and upper class backgrounds. The Telegraph goes too far.

Now I live within the domain of Watford, our own 'Blair Babe', Claire Ward had become the eyes and ears of the Queen in Parliament and the playmate of a Royal Marine officer in the showers while on a fact finding mission to Bosnia, it is alleged. It appears she got plenty of facts of life that day. She has had her head in the trough too - so you don't need to be in leafy suburbia to find a fiddling MP and a town fully disgusted. And Watford is a hardy place - you have to be with a football side that behaves like a yoyo and has to keep all its nice shops under cover.

Now Blame Accountants

Today's revelations about accounting is a bit silly. It's alleged that several ministers collectively paid around £11,000 for accounting fees to do their tax returns - the sin here is that they used our money for it. As so often the interpretation of UK Tax law by the very MPs who make them up and vote for them are radically different to those upon whom they impose them. Rather like paying for a gardener or a cleaner, paying an accountant to do your return is a personal, lifestyle decision, even if they are complex or simple. There is a hint in here that Alistair Darling, who paid around £1,400 over two years for his accounting fees, was using the accountant to get advice on how to 'minimise' tax. It sounds daft being as he is the Chancellor who actually is in charge of of the whole shebang but there you go. The fact is that £1,400 over two years would not buy you much advice but probably an office junior with a calculator just verifying the numbers you have written down. It will not get you a fully indemnified partner helping you squirrel your gardening costs or bags of manure under Parliamentary rules from personal expenditure.

Frankly most accountants are not that crooked and certainly not that cheap.

So I think that we do Darling, Blears, Hoon et al a great disservice. They were intelligent enough to know what they were doing and for the Telegraph to try to blame it on an accountant's advice for less than £1,000 a year is a) hard to believe and b) a gross insult to the fiddling abilities of most MPs.

'We Are All To Blame'

Darling is a pitiful sight at the best of times. As he announces bail out after bail out, his eyes widen in shock as if by broadcasting the numbers he suddenly realises what Gordon Brown and his banking 'advisers' have actually told him what to do and that the numbers are much bigger than the feeble maths books he was brought up on.

So on the Politics Show he did the usual political trick of trying to take some responsibility and blame by sharing it out with everyone else - it's the bank bail out principle all over again, 'We've cocked up, so everyone is to blame and pay for it.'

He asserted that MPs had plenty of chance to vote on expenses reform but 'turned their heads' each time when they had the opportunity. Vince 'Enforcer' Cable was incensed by the comments. Are we talking about the House of Commons where the Government has a whacking majority and votes through whatever it likes regardless of personal opinion? Darling seems to have lived in a dreamworld - Labour Party Whips control the voting, no law gets passed unless Brown says so. Of course, until such time that a final pang of conscience over the plight of Gurkhas slaps him in the face and tells him to get a gram of heart - he, the man who wrote a book on courageous deeds telling courageous warriors to get lost but having opened up our borders over the last 12 years to a few million migrants from all over the place?

If ever there was bunch who needed a reality check, then it is the occupants of the Cabinet.

An Election Needed?

Cameron could be accused of behaving like an over eager virgin wanting his 'first time'. It's all a bit premature.

I apologise in advance about the use of metaphors here, I have just made myself feel queasy seeing 'baby-faced' Cameron and 'School Sneak' Osbourne rutting like stags. But it is a little like that.

We are only at day 18, for heaven's sake, and there 650+ MPs and we are only really looking at second home allowances to date. We haven't got on to the make believe of travel and office expenses in any detail yet. OK, see we have a few more revelations about Derek Conway, but we knew he was an unsporting egg all along, but there are plenty more snippets to keep us going to the real election time and longer.

Here is the problem. We are in danger of exploiting public opinion when only a fraction of the misdemeanours and outright law breakers have been 'outed'. The problem will arise if Hustings start and more revelations hit or, worse still, an MP is voted in and has to resign weeks later. We want the truth up front.

We do need to have a clear out as there is a problem that goes all the way back to selection. You only have to see that Clare Moran's local Labour Party has endorsed her selection again for the next election to know that local parties do not get it either. How can local parties seriously consider people like Steen, MacKay, McBride, Conway etc etc? These people put them in power in the first place, they are hardly good judges of character. In many cases, it seems as long as they have a public school background, a large mansion and snooty accent then they are in. What this whole affair has taught us is that we need a fresh start on democracy because the direct outcome of the decisions we make as voters are the £billions we owe in tax, the credit rating of our sovereign debt, the dead and maimed bodies of our soldiers and the state of Douglas Hogg's moat.

Let's not get all premature. This has to get played out to see how rotten the whole system is. We need also to get to grips with expenses at all levels of Government and Civil Service. I heard Nadine Dorries on the radio bleating about the 'culture of fear' and 'suicidal thoughts' of MPs at Westminster and how they were underpaid which she seems to think should legitimise so many of their activities - it is that lack of capacity to reason that gets me. Any MP gets a minimum salary of £65k which puts them in the top 3% of earners in the UK - then they get a fully paid for 'office', a second home allowance and a virtually limitless travel budget. If that is underpaid then they ought to take their chances in the real world and get paid what they think they are really worth.

No, we need to weed out people like Dorries et al. If you think Politics is underpaid, then simply do not choose it as a career. And why we allow so many MPs to have external interests to supplement their earnings is beyond me.

Finally, I do not think the whole situation has been played out legally yet. The statute which allows MPs a cost up to around £25,000 for accommodation while performing their parliamentary duties is very clear about what can be claimed, no matter what the Green Book says. The blatant abuse of our tax system by the very people who design it has yet to be explored and I am at a loss to know why people have not been investigated. Having just got a tax bill this month, it was a stark reminder of the power of HMRC and if I claimed anything in expenses which was not allowable by HMRC, regardless of my company's policy, I would be at risk to pay it back at minimum and be prosecuted at their discretion alone. Why, there are even whole police forces chasing tax fraudsters.

There are so many flagrant and cynical abuses of the tax system that every one of those MPs should be investigated in full and prosecuted where appropriate, because the taxman will tell you that it doesn't matter if it was a mere bag of manure - fraud is fraud.

When One Job Is Not Enough

For a growing portion of the UK population, already over 2 million, and in countries like Spain where the proportion of population who may lose their job is expected to rise to 20%, one job is all they want and need.

Many would argue that having more than one job means that you cannot put enough time and effort into any one of the jobs in order to make a difference. If nothing else, it will mean changing focus and juggling time - which are never easy things to do. I would personally look at the raft of people who are serving multiple Boards as Non-Executive Directors (NXDs) and then hold down real jobs as being prime examples. I strongly believe we are in the mess we are today over things like pathetic watchdogs who just do the Government's bidding and have no bite of their own and the mess over Fred Goodwin's pension which still rumbles on having been negotiated by puppy dog NXDs. Again, from my own experience, I have yet to work with an NXD at a company who has made a single bit of sustainable difference to the company in terms of contributing effort and nearly all were reasonably well known.

So today we have Lord Levy talking about why Tony Blair should step down as Middle East Envoy as he has not the time to focus, the tools to do the job and, I think he hints at, the heart to focus on it. In my opinion, it is not a job you can play at as it affects the lives of thousands of disgruntled people and to give it a small percentage of your time a) shows you have no idea of the enormity of the situation and b) degrades the importance of humans.

But Tony has his snout deep in the trough of making money from his time as Prime Minister and he is not about to listen to people who let him down - friend or no friend.

Multiple Jobs And One Focus

I have blogged on this before. Many people who get to a certain level in industry join the gravy train that is multiple NXD and watchdog or quango jobs. After years proving that if they focus on one thing and be ultra successful, they suddenly believe that they can handle multiple roles and still be successful. Of course, in the world of NXDs there is no requirement to be successful as you are not measured on the success of the company. In the aftermath of the banking fiasco, hardly a single NXD has been blamed for the failed business model that led to a £1.3 trillion total bail out.

Tony Blair has many jobs. He is an NXD or Special Adviser to JP Morgan at £2.5m a year, the same at Zurich Financial £2m per year, he has a faith foundation, has £4.5m in advances for his memoirs which he is busy making up, and he is earning nicely on the after dinner speech circuit - at the height of the crisis in Gaza he was giving 90 minutes of his wisdom to drunken telecom executives in Barcelona for £240,000.

Lord Levy is right, for all his dodgy tax past and loans for peerages scandals, Blair is too busy making money to care one jot and do anything for the crisis in the Middle East and he is also one of the last equipped people in the world to advise having been party to starting a war in the region for wholly illegal reasons.

Besides, Tony, wake up and smell the coffee, for the effort you have to put in, there is no financial reward at the end of it - that just would not do while you are on the high speed gravy train to riches you think you deserve.

Pensions And Pensions

The full horror story of Fred Goodwin's pension saga is beginning to unravel. Under the Defined Benefits Scheme at RBS, Sir Fred would have been entitled for his length of service, age and the fact he was taking early retirement, to a great deal less than £703,000 per year he is getting. However, between he and his nice NXDs, Sir Tom McKillip and Bob Scott who were charged by the Government to negotiate Fred's settlement, they managed to bump up his fund to the equivalent of not just full service but add in all his bonuses as earnings too plus the ability to claim it for life from the age of just 50. Anyone else at RBS or other Defined Benefits schemes will know that the basis of pension benefit calculations is basic salary only. Goodwin even had the bare-faced gall to tell the Treasury Committee he was on the same sceheme as everyone else at RBS. I would love to see just one bank teller taking 'early retirement' get a deal on their pension calculated the same way.

Having lost billions of pounds and exposed the taxpayer to billions in liabilities for toxic debts of magnitudes far beyond our imagination, Fred Goodwin has been allowed to walk away with a great deal more than he was legally entitled thanks to the ineptitude of Government Ministers whose responsibility it was to get this right and make sure failure was not rewarded - now the same people are scrambling to be seen trying to correct this after the event.

At the same time we see the effects of Quantitative Easing (QE), the process of printing more money to inject £150bn into the economy to trigger us to spend more. The process has the initial effect of devaluing money already in circulation, although many would argue this is not a great effect. But, it has far greater effect on the long term worth of your money. This QE has a big effect on the debt market.

Pension funds depend greatly on the interest rates on Government debt and the deficits on pension funds widen as interest rates lower. Rates dropped at a great rate this week on the introduction of QE and this means there are greater deficits in pension funds - to the tune of £100bn in one week. The deficit in company final pension schemes is now estimated at £390bn - or more than £150,000 for every final salary scheme.

So it sharpens the thought process when looking at Government incompetence which allowed Goodwin to walk away with almost double his pension entitlement on a final salary scheme and then see them create an even wider pension deficit by introducing QE which increased the deficits of all final pension scheme funds. It means the cost of servicing Fred's pension just went up for the taxpayer who pays his pension.

Nice one, Gordon and the rest of the inept team.

'Slugger Cable'

I still have to look hard to find out what Nick Clegg does or if he exists as the only person at the Lib Dem Party who is regularly visible and commenting is Vince Cable - I still think he is the actual leader. No matter, this week he made an interesting analogy in a speech to his Party, likening this Government to the Bad Bank concept to deal with toxic debts. The moral mandate to govern has been lost, he claims, and the Government seems bankrupt of any ideas to get us out of the fiasco we are in and so their moral stock has become toxic and Labour is the Bad Bank of failed policy.

Very nice - I wish I had thought of that one.