WHENEVER I hear a Conservative politician angrily denouncing bankers’ bonuses, I can’t help thinking they don’t really mean it.
The regulation of private sector pay is ideological anathema to the party.
So George Osborne’s insistence yesterday that banks must come to an acceptable bonus settlement or else they will find nothing by way of sanctions is “off the table” sounds a bit hollow.
And yet Conservative politicians can’t do otherwise. They must be seen to fit in with mainstream public opinion on bonuses: namely that those responsible for the near implosion of the national economy just a couple of years ago should be made to wear hair shirts for the rest of their lives.
I agree with the idea that bankers working for RBS should show considerable restraint for the time being, but I’m not so sure I agree with that sentiment when applied to Lloyds Banking Group, and certainly don’t when it comes to Barclays and HSBC. Ordinarily, bankers’ pay is not a fit subject for regulation.
What is a proper subject for regulation is the way bank profits are accounted for. Nobody should be taking a profit while there is doubt over the outcome of the transaction underlying it.
That’s a standard principle of prudent accounting which appears to have been forgotten in the mainstream debate, particularly the debate taking place in Westminster. If you base bonus payments on real and certain profits rather than the shorter term measures, matters should work out.
Taxing bonuses is wrong and illiberal, but tighter and more relevant accounting rules are not.
The problem is that “I’m going to tighten accounting rules” is not much of a political slogan.
ON THE subject of large dollops of take home pay, John Syvret, at Cammell Laird ,comes to mind.
As LDP Business’s front page story reveals, Mr Syvret has earned almost £3m from dividend payments made by the shipyard company last year. It’s the sort of sum that would even cause blushes in London’s financial district.
But, unlike the bankers, there can be no doubt that this is reward for old-fashioned enterprise.
After the stock market quoted Cammell Laird went bust a decade ago, Mr Syvret picked up the pieces and within a matter of weeks restarted ship repair work from dry docks in Liverpool and Bidston.
He has since built a business that employs hundreds of staff. It not only services the obvious Irish Sea ro-ro ferry market, but also the less obvious military market. The MoD contracts have provided reliable long- term work on a number of Royal Fleet Auxiliary vessels and the flight decks of the new aircraft carriers..
And now the plan is to diversify further by servicing the offshore windfarms planned for the Irish Sea.
Mr Syvret may have started his career on the shipyard’s shop floor, but he now implements a business strategy that your average business school professor would describe as “textbook”.
IT’S surprising that Liverpool City Council has found the money to take part in this year’s MIPIM property convention in Cannes.
The city has sent a delegation in past years, but it had said it wouldn’t do so this year to save money.
It could be seen as a bold statement of intent as the council seeks to attract property investment to the city. But times are lean and our small delegation may find that hard work.
