How many millions does a top banker need?
Controversy over the near £1million share bonus awarded to RBS Chief Executive, Stephen Hester, is unlikely to end with his decision to decline it.
The bank is 81 per cent Government owned so, unsurprisingly, public opinion suggested the Government should have intervened directly as the principal shareholder. Mr Hester was recruited from the private sector to head up the bank and, the argument goes, needed a remuneration package comparable to what he could command elsewhere. Indeed, it is suggested he might be tempted to leave the bank.
To people struggling on capped or cut salaries or wages, the sums involved are beyond their dreams – and resentment turns to anger when these bonuses are paid to people who are making thousands redundant.
Mr Hester will continue to be very rich by any standards and should see the job through. There may be a case for a deferred bonus paid when the share price sufficiently recovers taxpayers’ losses, but now is not the time.
However, Labour get little credit from joining in on the attack on Stephen Hester as it was the last Government that set up his remuneration scheme.
The wider issue is the growing inequality between workers and bosses. Do we think inventors like James Dyson or pop stars and footballers like Adele or Wayne Rooney, should not receive huge earnings and how would we enforce it for private companies.
We may call, in vain, for a new morality among high earners. It certainly doesn’t help the case for those who argue for an end to the 50p tax rate. It may well be that we need to set up more broadly based remuneration committees – including ordinary shareholders, customers and employee representatives.
It certainly reinforces the case for employee share ownership, which is unlikely to end the bonus culture but may make it more equitable.
Breaking the Union: fiendishly complicated
The independence debate has taken on a new and dominant intensity since the UK Government raised the stakes. More people than ever now realise that Scottish independence and the break-up of the United Kingdom are real possibilities.
It is absurd for the SNP to suggest that this is just a matter for Scotland and that any action by the British Government is interference. The break-up of the UK has profound implications for all its 60 million citizens.
Nor will the outcome be what Alex Salmond or the SNP asserts and that any challenge to these assertions are wrong or anti-Scottish.
It is now becoming clearer to a wider audience that disentangling Scotland from the rest of the UK will neither be quick nor simple. It will be fiendishly complicated and likely to prove divisive .
How an independent Scotland manages its economy is fraught with uncertainty. We have no currency of our own. If we continue to use sterling our interest rates will be set by the Bank of England with no reference to Scotland. And the Bank will set the framework by which it would underwrite the Scottish public finances as a lender of last resort.
Joining the euro could only happen after negotiation and an extended transition where strict criteria will have to be met and after which conditions would be imposed. Scotland’s share of the UK national debt would have to be negotiated, not least, the assets and liabilities of RBS and HBOS.
Defence has already presented itself as problematic and an area of dispute. UK defence would be weakened, and Scotland’s defence would be almost non-existent.
Welfare is a huge part of the public finances and disentangling Scotland’s share and liabilities would be highly complicated and would leave Scotland exposed so that if unemployment was higher than the rest of the UK (as it is now) or the age profile of our population was higher than the UK an extra burden would fall on Scottish taxpayers which is now shared across the UK.
The riposte that Scotland’s energy assets will more than cover any differentials ignores the complexity and begs many questions. These include how the assets and decommissioning liabilities will be apportioned but what will be the value and amount of recoverable reserves – and the SNP always pick the maximum.
As for renewable energy, its full realisation depends on the market and under present plans investment is underpinned by customers across the whole UK. Without guaranteed access to these, Scotland will rely on contracts to be negotiated with external buyers.
Independence represents maximum uncertainty in the most difficult economic circumstances we have faced for decades. The United Kingdom needs to pool its assets of resource and people, not break them up.
Can’t golf and wind energy co-exist?
Donald Trump has threatened to scrap his Menie golf and housing development if the proposed offshore wind farm in Aberdeen Bay goes ahead. Of course, he is entitled to object to a planning application as is anyone and he has the support of neighbouring golf clubs.
However, it would seem quite improper for planners to be intimidated by threats of this kind rather than evaluate a planning application on its merits. This, obviously, will include whether it has an adverse impact on other activities such as the operation of the harbour or damage to tourism.
As the local MP I frequently drive to and along the coast between Aberdeen and Collieston. What I always observe is a busy maritime scene with oilfield service and support vessels, tankers, cargo ships and occasional parked oil rigs. I am not, therefore, wholly persuaded that fixed wind turbines will necessarily be more visually offensive and, I am sure that some golfers will find the offshore scene interesting.
The proposed wind-farm is a major development and a symbol of the next generation of energy investment which offers potentially significant opportunities for Scotland. It will be unfortunate if one investment has to be traded for another rather than finding ways to co-exist.
Solar energy court ruling no surprise
It came as no surprise to me that the Government lost its court case over the decision to halve the feed-in tariff on solar panels for electricity from 10 December – before the consultation was completed.
The Government was right to review the payments which were being taken up at a rate the Government could not afford to continue.
However, having benefited from installing 2.9 kilowatts on my roof last July, I think it would have been fairer to have a cut off time that at least allowed those who had signed a contract or paid an instalment before the announcement was made but were unable to complete installation in time to secure the tariff on offer when they made the commitment.
The Government is appealing and I suspect some such compromise may emerge.
Diversity of renewable energy and greater efficiency are essential both for security of supply and to reduce our carbon emissions. As the price of fossil fuels, especially oil, are likely to rise long term I have no doubt that the economics of solar, as well as wind, wave, tidal, heat pumps and bio-fuels will become more competitive over time supporting a growing, job creating industry.