Looking at a pig’s ear
As the rain beat down and the storms raged on Thursday, how little we suspected that it would be setting the tone for the financial institutions over this last weekend.
Our economic situation, hardly a happy one for a while now, and frequently thrown into turmoil by yet another catastrophe in the maelstrom that is the Eurozone just as we think it’s going to settle down, it seems set to have a whole new pig’s ear of a situation to contend with too, the latest, thanks, once again, to the banks and financial institutions on LIBOR and interest rate swaps.
Having spent a good deal of time over the last 15 or 16 months re-establishing links and generating a meaningful dialogue between the various banks and the Region’s small businesses it would be easy to give in to frustration and join in the vitriol and railing against those same institutions and specific persons in their higher management.
They undoubtedly have a very big case to answer having caused closure of many small firms and untold misery to thousands of families up and down the Country by their actions in recent times, but, however justified our anger and disappointment the last thing that we need is to join in with the political point scoring, grandstanding and jumping on the bandwagon of easy sound bites.
There is an urgent need for a fundamental review of the whole banking system, and probably more regulation at some point, though I would agree with the Governor of the Bank of England that now is not that time.
That particular can of worms may run very deep and take quite some time to sort out and we need a full and proper investigation as soon as possible to bring the appropriate people to book – at every level in those banks and other institutions, that will then not only best serve the majority of the employees of those institutions who were never involved, it will give us, the small businesses and the ordinary public, the justice we deserve.
Hopefully the investigation announced by Mr Cameron on Monday will make actual progress towards this. There’ll be plenty of time later for a full forensic examination of what and how things went wrong.
I would agree with Vince Cable when he says that it is time for the shareholders to have a voice, including, or maybe, especially, those of the companies who are the larger shareholders within those banks – one report over the weekend stated that Barclays pays out 3 times as much in bonuses as it does to shareholders, how they’ve managed to achieve that over the years under the noses of those shareholders is a mystery, but, if true, does serve to underline the total inequality and skewed priorities currently as I doubt it’ll be the only one with such bias.
As this £290 million fine is basically a “windfall” I would call for the government and our local MP’s to support utilising those funds received so far to:
• restore the SFO budget sufficiently to allow it to look into this whole situation (about £20 miliion);
• establish a proper small firms section within the appropriate existing government department that we’ve been calling for nationally, (maybe £10 million?) – put that office here and save a few public sector jobs too;
• to work with organisations like the FSB and larger companies to restore the remainder, (about £260 million), back to the small business sector from where the money was mis-appropriated and fund schemes such as the Portas Projects and that piloted by Greggs in Middlesbrough to encourage new and start-up businesses regenerating the centres of towns and rural areas to provide real jobs for people.
There are about 3 million small and micro firms in the UK, so if these measures only resulted in 15% taking on an average of 1 new employee full time that would be 450,000 and worth far more to the economy and Regions like the North East than temporary and part-time supermarket jobs.
Not only could such measures help to reduce the benefits bill, they may even help to give a much needed boost to the confidence of the larger businesses and encourage them to begin investing some of the £138 billion in funds available to them, (equivalent to about 3% of UK GDP), and really get the economy moving again.
There has already been enough ploughed into the banks and sat on for far too long, this is an opportunity for us to start seeing the finance being made available to those who are most likely to use it in the way intended and generate some much needed real economic growth and possibly opening accounts with more responsible banks and taking mortgages with building societies that do “boring” banking.
The North East Region of the FSB will be holding an event looking at alternative sources of finance as a realistic option to traditional banks in a few weeks time as a positive step to help the businesses in this Region, though that doesn’t mean we’ve given up on building on the dialogue and positive steps achieved with the banks to date, there’s probably more need for that than ever now.
Finally, let me finish with a quote from Thomas Jefferson:
“I believe that banking institutions are more dangerous to our liberties than standing armies.”
A pity that a few people hadn’t taken note of such a sagely observation a few years ago…
This was posted in Bdaily's Members' News section by Ted Salmon .