Now we’ve entered the new year and talk has moved beyond personal resolutions – perhaps it’s time to reflect on some of the big mistakes in our system of governance, which when things go wrong can and often does have devastating effects.
The most recent example of this wasn’t biblical – such as a cloud of locusts or indeed a rain of frogs, but instead something more devastating, ie the failure of our banking systems.
Yet amazingly the blame for it happening wasn’t laid at the door of incompetent, greedy financial administrators or their companies, rather per se mostly at the feet of politicians, who were castigated the world over for letting it happen. But what have we learnt from the devastation caused? Very little it seems, with the same people responsible for it occurring largely still in charge and running the show.
Indeed still continuing to award themselves enormous sums in bonuses while the establishment they work for is either run at a loss, or has lost billions of pounds in assets. This even though recent academic reports support the view that such payments distort behaviour, with evidence that the more bosses get paid, the worse they perform. I mention this because we’re about to enter an annual period when such payments are about to be authorised, and given the systems title bonus which itself derives from the Latin ‘bonum’ meaning a good thing, now is probably the best time to suggest changes to such bad practices. I say this because we need instead to firstly protect customers from such irregular behaviour and secondly to get the banking network to play a full meaningful part in society. Don’t they at the moment? No! Currently some of the biggest foreign investment and commercial banks operating in Britain only pay an average tax rate of just six per cent on their billions of dollars worth of profits they make here every year.
At the same time following the Brexit decision to leave the European Union, many of the same institutions are working to influence the European Commission to change rules that would allow the European Central Bank control over where Euro-based clearing occurs, thus allowing it to force such activities to occur in a country that uses the Euro. So what needs to happen? The Chancellor of the Exchequer in his spring budget must immediately introduce measures to limit such bonuses and instead get bankers and bosses to provide their staff with decent fixed salaries. Force all banks, foreign or otherwise operating in the UK to pay their fair share of Britain’s corporate tax rate of 20 per cent. Make moves to halt any attempts to change London as the world’s biggest Euro-clearing hub which currently controls 70 per cent of the market. Finally to take steps to get tax avoiders to pay their fair share. Increasing austerity measures to make up for revenue lost because of such people is unacceptable – nor for ordinary citizens to pay the price of ever increasing levels of financial inequality.