Thursday 5 March 2015

Financial scandal fatigue

There's a nice moment in the "Beyond the Fringe" sketch about the war where one of that "fab four" says:  "Every day Alvar Lidell brought us news of  fresh disasters" and this is immediately followed by a mock BBC voice-over: "This is Alvar Lidell bringing you news of fresh disasters."

Accurate that is or not, there is no doubt that nowadays, if not every day at least every week, we get news of fresh actual or possible financial scandals, so much so that most of us have lost count.  In the last week or so we have heard that:

  • the Bank of England, surely the epitome of financial probity, is to be investigated by the Serious Fraud Office  for possibly having manipulated the money auctions which were implemented to bail out the financial system through so-called Quantitative Easing in 2007/8
  • the Chief Executive of HBOS claims he knew nothing about the illegal acts of his Swiss subsidiary in aiding and abetting tax evaders, and instead of being sacked for negligence is likely to receive a bonus of £7.5m;
  • RBS, a bank "bailed out" with public money, made losses of £3.5bn in 2014 so its bosses are to receive a total of £421m in bonuses
  • Lloyds, another bailed out bank,  is to pay its boss a combination of pay and share options of £11.5m just for one year of his services.  Maybe they can afford it because they pay me just 0.2% interest on my "Easy Saver" nest-egg,  but if they lend it to someone as a credit card overdraft they charge them up to 23.7%.  (An incredible 52.1% on one deal: it should be illegal)
Beyond the financial sector we have learned that university vice-chancellors, assumed to  be dedicated and unworldly academics or absent-minded professors,  are not so unworldly that they fail to pay themselves an average of around a quarter of a million pounds a year.  No wonder they protested when Labour proposed to cut tuition fees to a maximum of £6 000 a year.

And this week I've received a circular from financial advisers Hargreaves  Lansdown  telling me that if I put £8 000 into my "pension pot" this year the government will add another £2 000 to make a total of £10 000.  Very nice for those with £8 000 a year (about £160 a week) to spare.  Were I a "top rate" taxpayer I'd be able to pay in £152 000, (just short of £3 000 a week)  to which the government would add £38 000 and I'd be able to "claim back" (I've no idea why) £ 47 500 so the total cost to me of a £190 000 addition to my pension pot would be a mere  £104 500.

Even with £300 a day for signing in at the House of Lord it would be difficult to stretch to that.

 Hargreaves Lansdown tell me that the Treasury spends £35bn a year in supporting pensions in this way.  We are urged to move quickly, because if Labour or the Liberal Democrats are in the next government this largesse, most of which accrues to the already very well heeled, may be reduced.  Fingers crossed that it is - down to the level which supports a pension pot sufficient to provide a pension equivalent to the median wage.  that's all anyone needs.  Indeed it would be a pretty generous pension.

What is regrettable is that the last Labour government, with whopping majorities for 13 years, appears to have done little to put a stop to these bonanzas.

At the other end of the scale  David Cameron has announced that if the Tories form the next government they will stop giving child benefit for the fourth and any subsequent offspring. That's on top of the benefits cap, the bedroom tax and vigorous purges of  self-seekers and those on the disabled register.

All  this together we are not.  I am astonished that our outrage is not more explicit.  We seem to have become inured to "news of fresh exploitation."

Sadly at least a third of those likely to vote in the next election seem perfectly happy to support the party which will perpetuate this unjust, divisive  and dysfunctional regime.

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