2 February 2012

Sir Fred Goodwin, the erstwhile boss of the Royal Bank Of Scotland (RSB) has now had his knighthood .annulled (cancelled). No doubt, Mr Goodwin, was awarded this honour for ‘services to banking’, which, in the event, turned out to be presiding over the largest corporate loss ever recorded in this country, something in the order of £23 billion, so it would have been hypocritical to leave him with this honour once this loss had been disclosed. Of course there are some who say that he should never have been given a knighthood in the first place, far too young and not having proved himself etc.

There have been other instances of honours having been cancelled but they were usually where a crime had been committed or the person involved had been struck off their professional register for a serious offence. However, this is apparently the first time that the annulment has taken place effectively for commercial incompetence. There are so many other instances of professional .or commercial incompetence, often with the transgressor walking away with a large compensation packet and a fat pension, one wonders whether this case will create a precedent.

Having said that,, apart from the public humiliation. Mr Goodwin will still enjoy a very handsome pension and the millions he made through share options, etc., whereas all the rest of us, that is the taxpayers, are having 22to bear the losses he incurred. Why is this? Answer, .because of his very tightly drawn contract .Question; why was it drawn so tightly in favour of Goodwin in the first place? Why not provide for loss of pension and
bonuses in the event of poor performance due to incompetence? I agree it might require careful drafting but it doesn’t seem difficult to draft it the other way to ensure that the person concerned receives handsome benefits in the event of some form of success. Do I think it was right to strip him of his knighthood? Certainly I do. He was only given it in the first place for doing a job for which he was employed for and for which he was grotesquely overpaid.

The other issue which has been taking up a lot of media space is the exercise by our Prime Minister on his veto in respect of the proposed EU Treaty. .

As I understand it the treaty was put together with a view to dealing with the default of any member of the Eurozone, but included .elements in it which our Prime Minister considered could damage our financial institutions and for that reason he exercised his veto. In the event, ,this Treaty has been signed by the other 27 members of the EU, clearly not as a Treaty but if not a Treaty then what is it? An informal agreement outside the normal EU directives? If every time one of the founding members exercises its veto against something proposed by the EU and its veto is ignored, then what value the veto? Of course, you can imagine that the Labour Party are making hay out of this situation. Mocking poor Mr Cameron as if the whole fiasco was his fault.

A third big issue currently being lauded about is the potential bonuses to be paid at this time of year to the bankers. Readers will recall me recording the fact that the current chairman of the RSB, after much media pressure., has waived his million pound. Bonus but we do not yet know what level of bonuses will be paid to the thousands of other city employees in the financial sector. They will certainly be considerably less than previous years.. if they .heed     the present government’s warning. How .Ed Milliband has the nerve to stand at the dispatch box and criticise this present government over the size of the current bonuses when he was a member of the Cabinet who signed off last year for £1.3 billion of bonuses to be paid to this select group. beggars belief.

What about the home front? I have sadly come to the conclusion after that one small glass of white wine I had with Rowan yesterday that any alcohol is going to stimulate my sinuses to a point where my breathing under the ”nose only’ respirator can become alarming. Sensibly, then I should become teetotal but it is very hard decision to make. Not that I crave alcohol-I can go two or three weeks without-but I do so enjoy the odd glass of champagne and what will I do when the good doctor arrives here next Tuesday to stay for four days, break the habit of a lifetime ? Or suffer the consequences. A true dilemma.

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