STEPHEN HESTER, chief executive of the Royal Bank of Scotland (RBS), has come under attack for receiving a£963,000 bonus. Large parts of the media, and Labour politicians have been outraged by his decision to keep his bonus.
Stephen Hester is not a banker, but was recruited by those hypocrites who now sit on her Majesty’s opposition benches, who, when they were in power, were set to turn around this loss making carbuncle . It should of course been allowed to fail; for that is supposed to be how the market works. Instead the last Labour government poured billions of people’s taxes into keeping it afloat, and recruited Stephen Hester to turn it around.
This he is in the process of doing, and as part of his contract with the previous government his remuneration was contractually agreed to by both parties. So Mr Hester is quite right to ignore the croakers, and keep his bonus. There is nothing immoral in holding such a position; he has brought the bank back into profit, and when the time comes for the government to privatise RBS, they should walk away with a handsome return for the taxpayer.
In the course of his overlordship of the RBS, Stephen Hester has had to make 3,500 people redundant, and may have to make many more so. He had to because it was the price that the employees had to pay, not for any perceived failure by Stephen Hester, but the fault of bad decisions made by Sir Fred Goodwin, as well as the folly that now surrounds the euro zone; which Stephen Hester, like the rest of us, knew little of at the time of his preferment.
If anyone believes that this bank could have been put back onto a successful footing without job losses, then they need their heads examining. Stephen Hester is being made a scapegoat, at a time when banking has become the modern form of witchcraft, and its practitioners modern witches. Stephen Hester fits their bigoted description perfectly…he has even been photographed in full fox hunting apparel to give further spice to the prejudices he is already subjected to.
Stephen Hester should carry on and fulfil his contract…I however, would not, had I been qualified for Hester’s job. I would have put two fingers up to my critics, given back my wretched bonus, and defied them to find someone who could do the job cheaper, if at all. Perhaps Bob Crow would have welcomed another nought on his six figure salary to give it a try?
Whatever Stephen Hester is being paid, it is peanuts compared to the £45 billion of taxpayers’ money that has been spent in keeping the RBS afloat. So why jump on Stephen Hester’s back, when he is trying to make it a success, and, in the process, making a lucrative return on our politicians’ folly?
OF ALL THE critics of Stephen Hester’s remuneration arrangements, the most duplicitous has come from Mr Bean himself. Ed Milliband has challenged this government to show leadership and remove the ignominy of Stephen Hester’s immoral greed from the public eye, by taking away from him this obscene amount of money for so little return.
Compared to Ed Milliband, Stephen Hester is an almost saintly figure. Hester is unlikely to forget from which political party he was recruited, and one would think that Ed Milliband would wish to remain silent on the issue of this man’s financial arrangements, considering they were made with the previous government, a government of which he was part.
Both the Milliband’s were, remember, the princes of Labour cronyism. They were both elevated to the House of Commons via safe Labour seats.
Milliband has been a well known brand on the socialist Left ever since the late 1960s and well into the 1970s. It was the Milliband’s father Ralf, the Marxist intellectual who lectured at the London School of Economics, whose influence upon student unrest helped characterise student protest at the time - which may partly account for Ed’s soliciting of the trade union block vote, when seeking the Labour throne.
Many Labour politicians, who were middle class students at the time, became disciples of Ralf Milliband. So the Milliband’s, have, like crony capitalists, advanced their ambitions via their parents.
STEPHEN HESTER swims in much cleaner water as far as moral exactitude is concerned, than does the Milliband’s. He is just doing a job. He is not a politician. He is an ambitious businessman with a record that the previous government found best suited their requirement for salvaging the RBS. He does not deserve Ed Milliband’s hypocritical strictures. The RBS can and will be fully turned round over time. It will not be done so by either a trade union leader or a Labour politician baptised in the font of Marxism.
It was the Labour party who negotiated and gave Stephen Hester his job, and the same party should be standing by him now. Gordon Brown welcomed Stephen Hester to the fold, as did, presumably Ed Milliband.
Stephen Hester should now hold firm and remain true to the contract he signed. He does not have to sacrifice or apologise for anything. He agreed to manage the RBS and try to return it once more to, first of all, solvency, and then to profit. At which time there would be private interest gathering for the ownership the RBS. Thus releasing the British taxpayer from their financial commitment.
Monday, 30th January
FIRST ADDENDUM
STEPHEN HESTER has bowed to pressure and returned his bonus. It has been calculated by the Daily Telegraph, that the treasury would have received £500,000 in taxes taken from the various bonuses Stephen Hester was entitled too; but who will now receive nothing.
I can understand why he had to cave in. The kind of pressure he came under was of a different nature compared to that he was used to working under in business. The kind of public exposure he has been put under by the politicians and the media, has however, taught him a vital lesson: if you are a business man or woman and you have to sup with politicians, do so with a very long spoon; especially if that politician is a Labour one.
Ed Milliband now wants to go further than this one episode and take a look at all boardroom bonuses: ‘This isn't the best way of setting the pay for top chief executives, let's be honest about it’, said this sincere politician. ‘That is why we need real change - real change in the boardroom and new rules and real change from the Government to say tax the bankers' bonuses until we see the change in behaviour that we need.’
So after months of exposing his inadequacies as a leader to the British public, Milliband has hit upon a crusade that he hopes will make him popular with the voters; and it has all been achieved, by joining in the chase of one man.
This is why businessmen should avoid politicians like the plague. Milliband will now try to keep this issue alive; not for any particular principle but purely for his own political survival, which I hope he succeeds in doing. If he is successful in hanging on to the leadership of his party; I hope he will send Stephen Hester a thank you letter, for being the fox instead of chasing one.
Revolution in the boardroom and nothing less seems to be the message of politicians. For Vince Cable, and Nick Clegg would also favour a root and branch reform of boardroom bonuses. (however, they would each have an attack of the vapours at the mere mention of revolution).
So, politically at least, there is now an enthusiasm for some kind of boardroom retribution regarding bonuses. But the politicians had better take great care: the people are, at the moment angry with bankers and financiers; how long this will last depends on their own financial circumstances (let us not forget that the people were perfectly happy with city bonuses when they were given their cheap mortgages; which they now blame the banks for giving them).
The public are angry with the banks; but are they so displeased with boardroom bonuses in companies where the shareholders determine the merits of generous bonuses? Remember, Milliband, Cable, and Clegg are leading the charge against all public companies – not just the banks.
IF THE TRIUMPHRATE of Milliband, Cable and Clegg have their way; then, like all reformers and revolutionaries, they must suffer (as well as the British people in this instance) the unforeseen consequences of their actions.
How many times have we been told by politicians that we live in a global economy? So, surely any kind of reform must take this fact into consideration? But it appears that this mantra has been received by deaf ears, as far as our triumphrate are concerned.
Unless, that is, they have been secretly supported in their intentions by every other economy in the world; but we remain ignorant because no announcement has as yet been made.
FINAL ADDENDUM
STEPHEN HESTER misunderstood the nature of politicians. But he should not feel embarrassed by such a lack of understanding. Many successful businessmen and women have had similar experiences with politicians in the past, and this will continue well into the future.
Stephen Hester saw the RBS as a challenge. As an entrepreneur his main satisfaction would have been in turning around this bank. When he succeeds, as I feel he is now more determined to do after this episode; he will be given his knighthood, recommended by whichever politician is in number ten at the time. He will go to the palace and kneel before, which I hope will still be the Queen, and in doing so, confront someone who knows all about the deeds and manners of politicians.
As for the boardroom: there are plenty of such boardrooms to retreat to all over the world, for those who may suffer Stephen Hester’s fate in the future. If the triumphrate succeed with their ambitions, many entrepreneurs will go elsewhere to make their fortune; rather than rely upon the national lottery, as many of those who resent Stephen Hester’s bonus tend to do.
Capitalism is the perfect suitor for human nature. It is not the product of a political ideology like socialism, communism, anarchism, environmentalism, or any kind of nihilism. It is, if you like, the mould from which human nature has been cast.
Enlightened self-interest, ambition and reward, are the primary focus of the capitalist system; and in achieving these, society as a whole grows and evolves. Its people and their families find happiness with such an arrangement because it provides work and wages which, among many other benefits send them on holiday each year.
But this free market system, from to time, lapses into various forms of recession and depression; and this is what is happening to us today. In the past Ed Milliband’s father would have provided an answer called Marxism; an answer which has been well and truly discredited by history.
We, as a nation, have lost much of our manufacturing base[1]. Now we have come to rely upon the financial sector, and the billions it pays each year to the exchequer, to help keep this country solvent. If our politicians and media, through their populist attacks, start to undermine what is Europe’s financial hub, then I hope they have an alternative ready.
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