Friday, 27 January 2012

Bankers' Bonuses

I note that Stephen Hester, the Chief Executive of RBS, has made the news this morning with details of his £1million bonus coming to light.

Labour, predictably, have said that it's a disgrace the Government have allowed this through, especially when the majority shareholder of RBS, is, after all, the Government. They are 'on the board', so to speak, so why didn't they veto it?

Well, there's a few problems with that:

  1. When the previous Government nationalised RBS, they did so by buying preference shares. These effectively give you first dibs on any profits the company makes, but crucially, do not give you any voting rights in the company's management. Thanks to Labour, the Government is a silent partner;
  2. The remuneration of company officials isn't decided by shareholders anyway, it's decided by the company's remuneration committee, which has led to a culture of 'back-scratching' amongst large companies. The coalition plan to change this. Labour put up with it for 13 years;
  3. Hester's bonus has been paid in shares, not cash. If RBS's share price (the standard indicator of it's performance and market worth) falls, so does his bonus. So it seems that he's being rewarded for success, and punished for failure. Seems fair to me;
  4. Hester was appointed as the CEO of RBS after it was nationalised, with the job of rehabilitating the bank and restoring it to private ownership. He's doing a good job so far - the bank is repairing it's balance sheet, and it's share price has risen. So why are we criticising payment for success?

Captain Picard thinks you've fucked up, Labour. EPIC FACEPALM.

 Mind you, if I were him, I'd still give up the bonus, on account of there being millions of people up and down the country who won't see that amount of money in their entire lives. Or better yet, accept it, and give it all away to charity.

But let's shift the debate away from the morality of the Government and the envy of the masses, which Labour's shrill hysteria plays into, and onto the personal ethics of individuals, shall we? Perhaps if we'd all been focused in individual ethics in first place, we wouldn't be in the fucking shit we are now.

Saturday, 21 January 2012

Miliband Thinks We Need a BIGGER Public Sector

Oh, for Christ's sake.

The fount of all knowledge that is the Leader of the Opposition, has come up with the brilliant idea of expanding the public sector to solve the unemployment problem.

Let me give you another basic lesson in economics, Ed. The public sector is funded entirely from tax revenues. Many people working in the public sector pay tax, but they pay less tax than their earnings are in total, ergo on a net basis, the public sector is funded entirely by tax revenues from the private sector, i.e. people NOT working for the State.

Now, we are currently borrowing about £100billion a year, because our tax revenues aren't sufficient to meet the cost of servicing our obligations, which includes paying every public sector employee, from the greediest troughing MP down to the hardest-working dinner lady. So, it's fair to say that, given that we're having to borrow money to pay for our existing public sector, we can't afford it.

And your plan to solve our economic woes is to spend more money?!


Just how fucking clueless are you?

Monday, 16 January 2012

Nick Clegg is an Utter Arse

This is not a new revelation, but one that has been reinforced today with the dopey cretin's urging of companies to offer shares to their employees.

I know this may come as a shock to you, Nick, but being employed by a company doesn't mean that you are prohibited from owning shares in it. All you have to do is get up off your liberal arse, walk down to your bank and fucking well buy some. With your own bloody money. Why in the name of all things sane should a company give a discount on its share price to people just because it happens to employ them?

In fairness, he has recognised the problem: 'we don't believe our problem is too much capitalism - we think it's that too few people have capital.' Absolutely right, there. Perhaps if all of you dumb-bastard politicians hadn't been encouraging our economy to be built primarily on the driver of consumer demand, i.e. people spending all of their sodding money on shit they don't need, people would actually save and invest.

But, there is another teensy, weensy little factor.

Buying shares is quite a risky business. If the company goes bust, you are apt to lose all of the money you used to buy them. Some people are not prepared to accept this risk. In the financial services business, we call it (rather imaginatively) attitude to risk. And we are not allowed to recommend investments that are unsuitable to people's attitude to risk. And there are stringent penalties if we do.

But, no matter for that - here comes Cleggie, with absolutely no fucking idea of how investments work, or how people can cope with a risk/reward balance, and comes out with trite little statements encouraging people to buy shares.

NO, DIPSHIT. I know it probably hasn't occurred to you, but maybe, just maybe, IT'S A LITTLE BIT MORE FUCKING COMPLICATED THAN THAT.

If you want to encourage more people to own shares, for fuck's sake, DON'T give them a discount on buying something they don't understand and which could lead to them losing money! That is a recipe for disaster. My ideas:

  • Start EDUCATING people about financial services and investments. Kids coming out of school these days barely understand what a fucking current account is, so how the hell do you expect them to understand shares?
  • STOP building the economy on the assumption that everyone must spend all of their money on useless shit, and start shifting it towards an economy of thrift and investment. We've had two generations of rampant materialism - everyone has an iPod, but nobody has a retirement fund. Priorities, people.
  • Make it EASIER for people to save and invest. The best way is not always direct ownership of shares, but investing through pensions and ISAs into professionally managed investment funds, which pick the shares for you, mitigating some of the inherent risk. So reform pensions and increase ISA allowances.
  • Advocate people taking proper, INDEPENDENT FINANCIAL ADVICE, instead of bowing to the banking lobby and letting the masses get ripped off by the jackasses. I've seen some of their excuses for 'advice' - to say it's shoddy is like saying Hitler was a naughty boy.
Clegg. The twat.
 It's not fucking rocket science, you twat.

Sometimes, I fucking despair.

Saturday, 14 January 2012

Child Benefit

So, I notice that Child Benefit has become an issue again, with the Government indicating that it may backpedal slightly on it's commitment to cutting the benefit for higher rate taxpayers.

Of course, under the Government's current proposals, one family where both parents earn £40,000 a year would still be entitled to Child Benefit, whereas another family where only one parent earns £45,000 would not be. Their policy is ridiculous - it's full of holes and hasn't been thought out properly. If you're going to withdraw it, it effectively has to be means-tested.

Of course, therein lies another problem - means-testing is complicated and expensive, which will reduce the amount of money saved by the cut. So, predictably, Labour propose to leave it as it is, which is equally ridiculous.

Here's my proposal, which makes perfect sense.

Abolish it entirely. And tax credits too, while you're at it.

According to the 2011 Budget, tax credits cost the Exchequer around £26billion a year. Child Benefit costs about £12billion a year, according to the IFS. Scrap them both, and use the proceeds to abolish Council Tax. You'll still have £12billion left to play with. Use the rest to increase the Income Tax personal allowance, which (after merging National Insurance with Income Tax) will not only make the poorest people better off by lifting them out of the tax system, but will also make it cheaper for companies to employ people.

Osborne. Sort the Budget out. It's not rocket science. It's fucking basic arithmetic and common sense.
 
Stop paying people to have children, and start rewarding them for working by letting them keep their own bloody money, instead of taxing the fuck out of them with one hand and handing them benefits with the other.

Thursday, 12 January 2012

Deregulation

I was having a discussion with one of my mates the other day about spending cuts. It was a really exciting conversation, as you may gather! His assertion was that the spending cuts were going too far, too fast, and it was choking off an economic recovery. My assertion was that the state of the economy is more to do with high taxes and excess regulation, and what we need to do is to cut red tape.

So, my mate set me a little homework - to find 10 examples of burdensome regulations that should be cut or reviewed in order to get the economy moving. So, here we go:

  1. Banking - for retail banks to start up business in the UK, it currently costs about £25,000 to apply for the licence. On top of that, there are regulatory requirements to hold a minimum of €5million or more of assets for capital and liquidity purposes. These rules apply even if you only want to provide savings and current accounts, rather than more risky activities such as loans, mortgages and investment banking. They have the effect of limiting new entrants to the market, thereby stifling competition, and allowing the industry to be dominated by a cartel;
  2. Health and Safety - there are currently 51 separate items of legislation referring to health and safety. Nobody is saying that health and safety isn't important, but do we really need 51 separate items of legislation, which are complicated, and difficult to understand and navigate? Keeping up to date with these, and interpreting whether they apply to particular industries or not, is a significant cost on companies, using up money that could be geared towards investment. The regime should be streamlined and simplified;
  3. Minimum Wage - although the Minimum Wage has been useful for setting a benchmark in terms of people's pay, it's interaction with the benefits system has resulted in some people actually being better off on long term benefits than in employment, particularly if they have children. This is a direct barrier to greater employment, and ergo economic activity. Furthermore, the concept of placing an artificial price on someone's labour means that a company will not employ someone if they do not think they are worth the wage, but they might have been employed if the company had the option of paying them less;
  4. CRB Checks - CRB checks currently have to be performed for a wide range of jobs, and virtually anything involving contact with children, even if their parents are supervising. This is a direct cost to businesses. On top of that, a CRB check is a one-off, and does not assess someone's ongoing suitability for the job. So the regulations are not just burdensome, they are ineffective in their purpose. They should only be necessary for supervisory jobs with children, i.e. where their parents aren't present, and there should be a requirement for an annual renewal in such jobs;
  5. Company Law - there are currently 131 separate items of legislation pertaining to company law, specifically accounts and returns, corporate structures and workings, business names and public disclosure. Navigating these is a minefield, particularly for smaller companies who cannot afford expensive legal advice. This is a direct obstacle to new businesses starting up, and an ongoing cost to existing businesses. These should be simplified and consolidated, preferably into a few easy-to-navigate Acts of Parliament;
  6. Private Finance - new businesses often require initial capital in order to get themselves off the ground. Currently, the primary source of this initial capital is High Street banks, but because the banking market has little appetite for lending, new businesses are struggling to get the investment they need. This could be solved by allowing pension and mutual funds to invest in new businesses, rather than the current blanket ban on unlisted companies, and would help to loosen the banking stranglehold on the economy. There are about 5 High Street banks - there are over 35,000 pension and mutual funds;
  7. National Insurance - we currently operate two taxes on earnings in the UK - Income Tax and National Insurance. These have to be levied separately, often requiring complex payroll software or laborious calculations, which is a disproportionate cost to small companies. National Insurance should be abolished, and the rates added to Income Tax, vastly simplifying the tax system. The residual Employer National Insurance could be retained as a Payroll Tax, which is what it is anyway;
  8. Payroll Tax - Currently, employers have to pay 13.8% of their employees' income (over a minimum threshold) in Employer National Insurance, which is in effect a Payroll Tax. The revenue may well be useful to HMRC, but the way it is levied is a direct obstacle to employment. This should be carefully looked at to see if there can be an alternative way of raising the revenue without harming the labour market. Increasing the minimum threshold and reducing the rate may actually stimulate jobs and bring in more revenue;
  9. European Law - many of our laws originate from the EU, and there are often conflicts with domestic law, leading to confusion and sometimes costly litigation. If European law is to be enacted in the UK, I would suggest a full legal analysis of it's impact before it's application, then it's application via Acts of Parliament and the relevant repeal of conflicting legislation. In other words, keeping the law as simple as possible, rather than just bolting bits on and hoping for the best. Of course, politically, this would require a fundamental change in our relationship with the EU, but that's not a bad thing;
  10. Planning - the current planning permission rules are particularly hideous and overbearing - there are currently over 200 items of legislation regulating town and country planning. Restricting the urbanisation of rural areas isn't a bad thing, but if we're going to do it and still allow a dynamic economy, re-use of brownfield and inner city sites is absolutely key. Securing change of use from residential to commercial and vice versa is particularly difficult. These laws should be simplified and consolidated, shifting the bias away from maintaining the status quo, especially in urban areas.

So, 10 examples there of red tape that could be cut, reduced, simplified and/or consolidated which would have a lasting impact on the economy in this country, making it easier to start businesses, carry on in business, get a job, employ people and make money.

Off you go then. Snip, snip.

    Thursday, 5 January 2012

    Diane Abbott and White Guilt

    So, the Twittersphere predictably exploded today with the revelation of a nice little tweet by Diane Abbott MP. I can't provide the link as she has now deleted it, but a lovely little screenshot is below.

    Tweets can be deleted, screenshots are forever.

    Nice sentiment, isn't it?

    Abbott issued a defensive statement earlier as well:


    Which I propose to be total bollocks. Why didn't she say '19thC slavers' instead of 'white people', and why use the present tense? Plus, she had 34 characters on her tweet left over. Diane Abbott is a liar, and got caught being a racist scumbag.

    But that's not really what got my goat. What's really annoyed me is the number of people that have leapt to her defence, while the same people would have shrilly howled for the immediate resignation of anyone who dared to make such a comment about another ethnic group.

    Can you imagine the furore if a Cabinet minister had commented that 'black people love robbing folks'? Or if 'Jews stole people's money'? They would be castigated for it, and rightly so.

    Now, I'm not for censorship - as far as I'm concerned, Abbott can say whatever the hell she likes, but she's got to be prepared to substantiate it, and to have people attack that opinion vociferously. Which I have done, and used that argument to contend an opinion, i.e. that Abbott is a racist scumbag who should resign. And for that, she gets this blog's highest dishonour.

    Welcome to the Gallery. You cunt.

    But another defence that was used is basically that, because Abbott is a member of an ethnic group which has been historically oppressed, it's basically acceptable for her to criticise members of an ethnic group which historically did the oppressing.

    So, because Abbott is black, is perfectly OK for her to make stereotypical generalisations about white people. And because white people from Spain, Portugal, France, Holland and Britain engaged in the African slave trade hundreds of years ago, all white people must therefore be held in permanent guilt for this, and accept lesser protections against discrimination.

    Bollocks, I say.

    I am white. I am not ashamed of it, because it is nothing to be ashamed of. I am British, and I am proud of Britain's primary association with the slave trade: we abolished it. So when people try to tell me that I should bear some long-dead bunch of bastards' guilt for doing despicable things to other humans simply because I look a bit similar, I say: fuck you and the horse you rode in on.

    It's worth bearing in mind that the civil rights movement, which is largely responsible for the equality of position that black people hold in modern society (and a bloody good thing too) advocated just that - equality. Equality of opportunity, and equality before the law. Not domination by any ethnic minority based on white guilt. That's just replacing one form of inequality with another.

    And then came the crowning achievement - a bunch of white people defending Diane Abbott by parodying white people under the hashtag #whitepeopleblues, generally pathetic stereotypes portraying all white people as middle class, rich, driving Land Rovers and sending their kids to private school.

    It just goes to show how far removed from reality some people are. Sometimes, I despair.