Stripping Sir Fred - a monumental irrelevance

 By phatcontroller

Oh well, that’s alright then. They've stripped Fred the Shred of his knighthood. The financial crisis is solved. The world breathes easily.

It is an extraordinary technique, and a disastrous one, that – time after time – the British political establishment uses to avoid action. 

They narrow down the problem, increasingly absurdly, to some symbolic gesture. Then they do it, and keep their fingers crossed that history will move on.

In fact, it is tough today to work out which is the most annoying.

Is it the politicians who really think they are solving anything by removing the little something that hangs before Fred Goodwin’s name?

Is it the CBI and the usual business lobbyists who apparently believe there is nothing wrong with a loss-making publicly-owned bank giving its chief executive £1m in shares?

Is it the Labour Party which wrote Stephen Hester’s contract and seems unable to broaden the issue out any further?

All in all, the bonus debate is peculiarly bad for heartburn, especially when another £500 million has been earmarked by RBS for bonuses for other staff – money that rightly belongs to you and me as shareholders.

Especially when the peculiarly unimaginative Croydon Council say they are thinking of closing Upper Norwood library, a unique experiment with a locally run institution in premises shared by two local authorities.

It is staggering that the public sector has these priorities, and even more staggering that somehow the question to knight or not tonight is any kind of answer.

Nor is it just the bonus culture, of course. It is the whole issue of how we have allowed a small group of staggeringly overpaid ubermensch  to emerge, corroding the social fabric, pushing up inflation and diverting energy and money away from the productive economy.

How do we tackle it?  We can get behind Vince Cable in his struggle with the Treasury on this issue.  We can point out that these salaries and bonuses are not just unfair – they are actively corroding the economy.

But first and foremost, we need to do what Andrew Simms and I argued last year in our pamphlet The Ratio, and expect companies over a certain size to publish the ratio between the salaries of their highest paid staff and the annual wages of their lowest paid contractors and cleaners.

Information isn’t enough, but it’s a vital start.