SPIV ECONOMICS
The £260billion guarantee for the Lloyds Banking Group has been announced and the news received with a certain nonchalance. The cost and frequency of the bailouts has almost become commonplace.
However, the shareholders in Lloyds are rightly angry that their investments have been diminished by the bungled merger with and bailout of HBOS. It has been estimated that every taxpayer will need to pay an extra £806 per year to keep the scale of government borrowing under control. When families start having to find roughly £1,600 [if both husband and wife are working], simply to stem the increase in government borrowing, and especially if the guarantees that Labour have been so willing to give to the bankers are called in and push the borrowing up still further, then the anger will turn to a hatred of those issuing these guarantees - Labour.
Despite the insolvency of the banks, news of the extravagance of the bankers’ pay continues. Larry Fish, who retired from RBS in May, is being paid £1.6million each year. His pension pot was increased by £2million to £19million in 2008; Sir Fred Goodwin’s pension pot was increased by £8.3million; and Gordon Pell’s pension pot was topped up by £1.4million. This is despite the tens of billions RBS lost. It has further been revealed that RBS provides a £1.6million home free of charge to its chairman.
RBS is now set to use £807million of the taxpayers’ money used to bail it out to shore up its pension scheme, which is now in a £1.99billion deficit. The RBS pension is extremely generous. Most staff make no contributions and can retire at 60 on two thirds of final salary.
At Northern Rock, Adam Applegarth received a golden goodbye of a year’s salary of £760,000 and a pension top up of £109,000; Andy Kulpers received a golden goodbye of £708,000; Bryan Sanderson, the former chairman, received a severance package of £340,000 [£85,000 per month for the 4 months he worked for the bank]; and Ann Godbehere claimed £173,000 in expenses for commuting from her home in Switzerland and pocketed £786,000 for only 10 months work. This is despite the bank going bust and having to be bailed out by the taxpayer. 400 junior managers are expected to be paid up to 10% of their salary.
Despite the debacle at Lloyds Bank, whose shares have fallen from 614p in early 2007 to roughly 42p now, Eric Daniels, the chief executive, receives £1million per year, is believed to have ‘non-dom’ status and receives an annual allowance of £25,000 for his ‘tax and financial planning’. His pension pot is worth £2.8million.
Back in the real world, it has been revealed that those remaining defined benefit pension schemes have a combined deficit of £219billion. The Pension Protection Fund, which was set up to bail out insolvent pension schemes, produced figures showing that the decline in value in equities was responsible for the black hole.
Meanwhile, the banks are not passing on the base rate cuts. The latest cut in base rates resulted in a mortgage rate cut of only 0.1% from the Alliance and Leicester, which has now been taken over by the Spanish Santander. Average bank savings rates have been slashed to a paltry 0.17% for an instant access account, while customers who are overdrawn on the current accounts face being charged a 18.62% interest rate. This is outrageous bank profiteering.
The ordinary English taxpayer is being taken to the cleaners.
However, the shareholders in Lloyds are rightly angry that their investments have been diminished by the bungled merger with and bailout of HBOS. It has been estimated that every taxpayer will need to pay an extra £806 per year to keep the scale of government borrowing under control. When families start having to find roughly £1,600 [if both husband and wife are working], simply to stem the increase in government borrowing, and especially if the guarantees that Labour have been so willing to give to the bankers are called in and push the borrowing up still further, then the anger will turn to a hatred of those issuing these guarantees - Labour.
Despite the insolvency of the banks, news of the extravagance of the bankers’ pay continues. Larry Fish, who retired from RBS in May, is being paid £1.6million each year. His pension pot was increased by £2million to £19million in 2008; Sir Fred Goodwin’s pension pot was increased by £8.3million; and Gordon Pell’s pension pot was topped up by £1.4million. This is despite the tens of billions RBS lost. It has further been revealed that RBS provides a £1.6million home free of charge to its chairman.
RBS is now set to use £807million of the taxpayers’ money used to bail it out to shore up its pension scheme, which is now in a £1.99billion deficit. The RBS pension is extremely generous. Most staff make no contributions and can retire at 60 on two thirds of final salary.
At Northern Rock, Adam Applegarth received a golden goodbye of a year’s salary of £760,000 and a pension top up of £109,000; Andy Kulpers received a golden goodbye of £708,000; Bryan Sanderson, the former chairman, received a severance package of £340,000 [£85,000 per month for the 4 months he worked for the bank]; and Ann Godbehere claimed £173,000 in expenses for commuting from her home in Switzerland and pocketed £786,000 for only 10 months work. This is despite the bank going bust and having to be bailed out by the taxpayer. 400 junior managers are expected to be paid up to 10% of their salary.
Despite the debacle at Lloyds Bank, whose shares have fallen from 614p in early 2007 to roughly 42p now, Eric Daniels, the chief executive, receives £1million per year, is believed to have ‘non-dom’ status and receives an annual allowance of £25,000 for his ‘tax and financial planning’. His pension pot is worth £2.8million.
Back in the real world, it has been revealed that those remaining defined benefit pension schemes have a combined deficit of £219billion. The Pension Protection Fund, which was set up to bail out insolvent pension schemes, produced figures showing that the decline in value in equities was responsible for the black hole.
Meanwhile, the banks are not passing on the base rate cuts. The latest cut in base rates resulted in a mortgage rate cut of only 0.1% from the Alliance and Leicester, which has now been taken over by the Spanish Santander. Average bank savings rates have been slashed to a paltry 0.17% for an instant access account, while customers who are overdrawn on the current accounts face being charged a 18.62% interest rate. This is outrageous bank profiteering.
The ordinary English taxpayer is being taken to the cleaners.
posted by erc @ 12:23 am
<< Home