Category Archives: big business

FCA to allow bankers to to do what they want

In the dim and distant past, some bankers were a little bit naughty. In fact, some made it into our evil hall of fame, and one or two even got sent to jail as a result. Some notable examples are the Libor fixing scandal, the PPI mis-selling scandal, money laundering, the rate swap scandal, and manipulation of the foreign exchange rates. In response to the barrage of illegal behaviour, the Financial Conduct Authority was set up to keep an eye on the banks. The FCA is (in theory) an independent body, set up in 2013 to replace the Financial Services Authority, to oversee both high street and wholesale banking.

Unfortunately the FCA has been doing its job too diligently. When it has uncovered potential wrongdoing, it has had the audacity to speak out about it. Now the Treasury has had enough of such ridiculous behaviour, and is seeking to put a stop to the bank-bashing. The first step in that was George Osborne firing the previous FCA chief, Martin Wheatley, and replacing him with Tracey McDermott, who has already promised bankers that she won’t encumber them with more regulations.

One thing that the FCA were investigating was whether pay and bonus structures were encouraging individual bankers to misbehave. Examples are Fred Goodwin, who led RBS in to a situation where the government had to buy it out before it collapsed, yet he still walked away with a £693,000 a year pension. We would imagine that the FCA wondered whether some linking between poor performance and pay might have encouraged better performance. But we’ll never know if that is what they were thinking, because their report has been gagged;

The FCA had previously said that the report would be the most significant thing it did in 2015, but shortly before it was due to be published, they decided to quietly work with banks on a one to one basis, to persuade them to “have a cultural change” instead. In repose, Conservative MP Mark Garnier, who is a member of the Treasury Select Committee, responded to the news by going on Radio 4 to question whether the Treasury had too much influence on the FCA (which the Treasury of course denied). George Osborne, who has met with senior bankers over 90 times since taking office did however say that the age of banker bashing was over, and that the UK would aim to be the best place for global banks to have an HQ. Because that worked so well for us before. Mwhahaha.

Update – 5th Jan 2016

The FCA today announced that it would take no action against HSBC for actively helping clients evade tax;

The FCA concluded that while HSBC did break the rules, they have changed their ways since then, so it didn’t need to take any action against them. That means that the only person who is in trouble over the tax evasion is the whistleblower who brought the wrongdoing to public light – he has been sentenced to 5 years in jail for violating Swiss bank confidentiality rules. Mwhahaha.

In completely unrelated news, HSBC are shortly about to conclude a 9 month review in to whether it should move its headquarters out of the UK (and therefore out of the FCA’s control), with the corresponding loss of city jobs that George Osborne is so keen to avoid.

We’re too strict on bribery and corruption

There was a time when some British businesses bribed their way into juicy contracts around the world. BAE systems was particularly good at it, allowing them to win arms deals all over the world. Unfortunately the US noticed, and fined them $400m. When it became incredibly embarrassing that the Serious Fraud Office had investigated but done nothing about it, a new anti-bribery law was brought in in 2011.

Some people have been of the opinion that stopping bribery and corruption is a bad thing – particularly when doing business with Asia and the Middle East. So the Tories have undertaken a consultation to see if it can be changed.

To make sure that they got the answer they wanted, the government only asked business, and didn’t ask the SFO (who are the enforcers of the act), or indeed anyone who might have had anything to say about the benefits of the act. Mwhahah.

Surprisingly though, almost every business said that they were happy with the act, with some saying that watering it down would be embarrassing and hurt the good reputation of British businesses. So for now, the chance of a nice bit of evil has been halted unfortunately.

As benefits are cut, so are wages

The Tories have spent the last 6 years dismantling the welfare state, with a view to improving the economy. Fortunately some employers have realized that when the state doesn’t have employees backs, they are free to screw employees. How do we know this? The ONS has published figures this week about the number of people paid less than the living wage, and how that has changed over time.

Statistics show that the percentage of people (or more accurately the percentage of jobs) paying below the living wage was steady at about 13% until 2010 when the Tory-Lib Dem Collation got in. Since then the percentage has increased to almost 20% in London, and nearly 25% outside London. Employers know that with benefits all but eradicated, unskilled employees in particular in the accommodation, food services and retail sectors have no option but to accept whatever pay they can get. Average pay is also completely failing to keep up with inflation, showing that these issues are not confined to the lowest paid jobs. In fact, the median pay today is worth 10% less in real terms than it was in 2008. Mwhahaha.

There are some other inequalities hiding in the data too – women are far more likely than men to be paid less than the living wage;

Living_Wage_Gender

and the youngest and oldest people are more likely to be underpaid too, with 18-24 year old’s the worst hit. The standard justification for that is that they have less experience, so are worth less, but it’s hard to see how a 24 year old, full of energy and enthusiasm, with a potential 6 years experience under their belt is truly worth so much less than a pensioner.

Living_Wage_Age

The truly evil thing is, I doubt anyone is surprised.

Make the proles work to death

In the good old days you could send someone down a mine for a week without a break and pay them tuppence. However, the working time directive and the minimum wage put an end to all of that. The minimum wage ensures that you pay most people at least half a pittance, and the working time directive stops you from making them work every hour of every day.

In fact, what the working time directive does is it forces employers to give employees a) a break every 6 hours, b) 11 hours off to sleep/eat, c) one day off a week, d) 4 weeks holiday a year, and e) not work more than 48 hours a week. All of this can be averaged over a reasonable period for shift workers too. Unless the employee chooses to opt out of any of those of course – the employee can choose to do overtime to boost their wages if they want. So it’s a pretty annoying law if you want to work your employees to death against their will.

All of this is courtesy of the EU, who for some reason think that the little people should count as people, and be protected from exploitation by unscrupulous employers. Fortunately David Cameron is going to fight the EU over this, and seek to get rid of workers rights. Mwhahaha.

If David Cameron succeeds, we can look forward to never seeing your friends and family, and a large increase in strokes and other illnesses as people are literally worked to death.

MPs supplement wages with second jobs

Being an MP is something that most people assume is a full time job. They get paid £74k plus very generous expenses for representing their constituents in parliament, debating laws and policies, and working on committees. They also are expected to work hard within their constituencies, running a regular surgery, attending meetings and so on. Parliament sits for about 160 days a year (it varies from year to year), leaving 73 working days for party conferences, constituent meetings, and so on. Parliament starts as early as 9:30 am, and finishes as late as 10 pm, so it’s not a short day.

However, despite this, 100 MPs have reported as working second jobs. The latest is MP for Stratford-on-Avon, Nadhim Zahawi, who has landed a job as Chief Strategy Officer for Kurdistan oil company Gulf Keystone.

Mr. Zahawi, sits on the Foreign Affairs Select Committee, and was chair of the Parliamentary Group on Kurdistan during the last parliament, leading to no end of questions about conflict of interest, in addition to not working full time as an MP. Mwhahaha. Some MPs with second jobs claim that it helps give them additional knowledge and experience. That may be true for a barrister or a doctor, but it’s hard to see how that applies to a lucrative directorship or consultancy.

Mr. Zahawi is far from the only MP to be moonlighting. The BBC reported 100 other MPs also working second jobs earlier this year;

Some may sympathise with the poor underpaid politicians needing extra work, but according to YouGov, the public are not particularly happy with MPs working part time.