Introducing our new series – London’s Queen of the City column – written by our eyes and ears across the Pond. In this installment, the Queen takes on the current economic crisis, talking about its effect on the Square Mile (a/k/a London) and the need for constant vigilance.
Writing about City folk in general and bankers in particular has been a gruesome gore-fest lately. Ever more lurid stories of greed and excess and jaw-dropping incompetence have graced broadsheet, tabloid and web pages alike for months on end. One thing the Great British Public fail to forgive is being taken for a ride and, between the banks and the parliamentary expenses scandals, it’s been a helter-skelter rollercoaster ride all the way.
In time-honoured fashion, we Brits have selected one or two personalities for particular condemnation. We used to stick them in the stocks and throw rotten eggs at them, but these days we’re a bit more sophisticated: they get drubbed in the media.
In UK banking, the sites are set on Sir ‘Fred the Shred’ Goodwin, erstwhile jugular executive at The Royal Bank of Scotland who managed to finagle a staggering pension pot considering he’d brought an august institution to its knees with pure, erm, financial irresponsibility? Mismanagement? Rotten bad luck? Whatever, you pick. Fred fled. Somewhere nice, sunny and probably rather expensive.
The tax-paying populace took it considerably amiss that their heavily taxed pounds will now pay the unlovely Fred a massive pension, payable while he is only nudging 50. Peeved the people a lot, that did. Especially since they’re losing their jobs in droves, or working way past retirement age to fund their old age.
Great British pragmatism being what it is, many wage earners shrug, carry on and accept that fiddling politicians and a handful of dodgy bankers are a small price to pay for stable and pretty safe democracy with a penchant for pageantry.
Which is where I disagree.
If you want to get me all het up and in a right royal bother about business bullies, tell me a story of injustice. Especially in the workplace. Our Fred the Shred shed, well, shedloads of people in his mission to cut costs. Maybe even some of those who were warning about his bank’s dangerous exposure to toxic debt and the mortgage mess. But he got away with culling vast numbers, as have others and, sadly, will again, unless the corporate culture changes rather dramatically.
Her Majesty’s Government is busy tossing expensive sops to the banks to keep them afloat while thousands lose their jobs and small businesses die for want of a line of credit from those self-same banks. Not much is flowing out from the banks in the way of loans, either mortgage or business. I’m no economist, but I do find that rather startling.
Rescuing really ailing businesses is, admittedly, a tricky scenario. Rescuing a bank on the verge of crashing and burning is seen by some as criminally stupid. You don’t supply Viagra to a man with a heart condition, why inject cash into an institution which managed to lose nearly all of its stash of the readies before now?
I’ll ‘fess up a vested interesting the banking sector: my Consort, as we will call him, has worked for some of the biggies over the years. He’s been treated extremely well and utterly appallingly by some household names, all who shall remain nameless.
Consort was working for a boutique investment bank earlier this year. Last year it paid its senior execs some eye-popping bonuses. From Christmas it neglected to pay him. He was told he had to keep going into work, and that the money would be forthcoming. It wasn’t. No salary, no expenses, no healthcare, no PAYE, no National Insurance for four months. Eventually, in April, he was forced to leave, luckily scoring another position elsewhere. He still hasn’t been paid by his former employers.
We’re off to the Employment Tribunal in August to beg them to get him his cash. Meantime, we’ve been told that the bank’s management is busy whizzing off assets and invoiceable income from his firm into other business ventures. When they’ve stripped it clean, they’ll close the bit of the business that employed Consort (and about twenty others – all still unpaid, we hear). So when we get to court, there will be no viable business, no money, and no way of paying him even if he wins because all the assets have been shifted out. But we’re doing it anyway because you have to stand your ground and shout when things like this happen. Rolling over and playing dead just encourages more bad behaviour.
It only takes a little spot of rot to spoil the barrel of apples. Letting the little sins slide in is a slippery slope. Squeaky clean, that’s what City types need to be. It may be difficult to scrub out the bad practices that have become so prevalent, but that’s no excuse for not trying.
Good behaviour goes with good governance, which begets trust, and trust brings profitable transactions benefiting everyone. Time we tried it.