How we use Cookies

Denis: Even the rich failures are getting richer

Denis

THE economic inequality of our society continues to amaze me, although it has been around for many years.

The poet Shelley commented in the early part of the 19th century that the rich get richer while the poor get poorer. This also applies, it appears, to rich failures.

Sir Fred Goodwin, the former chief executive of the Royal Bank of Scotland, who is seen as the architect of the bank’s failure, was earning more than £4 million a year including bonuses before he was required to relinquish his post.

The Government had to step in with a £20 billion rescue package to save the bank.

The RBS is now 70% owned by the taxpayer and yesterday it announced more massive losses.

So what of Sir Fred the Shred, who got his nickname because of the ruthless way he bought banks and stripped them of their costs, often by shedding staff, to generate profits? Certainly not sackcloth and ashes.

He walked away from the RBS disaster with a £16m pension pot. This means that at the age of 50, he is already drawing £650,000 a year pension and will continue to do so for life.

Let’s just pause there: £650,000 a year for not working. That’s £12,500 a week, or £1,785 a day. A life of luxury and cruises for being a failure.

How does that compare to the average wage of the working man? And how would he be rewarded for failure?

"Sorry, gaffer, these valves are a millionth out. They’ll cause the gear boxes to seize up. I suppose that means we’ve lost the order and the factory will have to close because of me. Will I still get redundancy?"

"Of course you will, lad. And a villa in Bermuda."

I socialise with working men who are worried for their jobs in the recession. Whose employers have told them there is no money for pay rises. Who are expecting the next suggestion to be a pay cut to keep going.

These are ordinary blokes with a Northern work ethic. What message does Sir Fred’s pension give to them?

The Treasury, of course, has said it is looking to see if there is any way it can claw back some or all of the pension entitlement but a financial source has said, "In reality the pension has been agreed, is in payment and there is very little the Government is likely to be able to do from a legal standpoint."

The Treasury has also said that with RBS it will "review all aspects of Sir Fred’s tenure in office with a view to testing to the full any potential for legal redress".

But don’t hold your breath.

Don’t forget that scandal continues to dog both houses at the Palace of Westminster, with Lords accused of selling favours, MPs criticised for their expenses and the Home Secretary being investigated for possibly manipulating "second home" allowances.

"We are committed to cleaning up the banking system," says the Treasury. They might also consider cleaning up Westminster, while they are at it.

People in the real world are not stupid. They can see the poor are getting poorer while the privileged few are unaffected and don’t seem to care. Percy Bysshe Shelley had more choice words on the subject of establishment complacency.

After the Peterloo Massacre, he urged action from the common man: Rise like lions after slumber, in unvanquishable number. Ye are many, they are few.

Not that I am urging revolution. But politicians should think about that, come the next general election.

 

Journalists

Doug Thomson
Huddersfield Town correspondent
Chris Roberts
Huddersfield Giants correspondent
Louise Cooper
Crime correspondent
Nick Lavigueur
Health Correspondent
Joanne Douglas
Local Government Correspondent
Linda Whitwam
Education Correspondent
Henryk Zientek
Business Correspondent
Val Javin
Features Editor
Martin Shaw
Mirfield Correspondent