Bonus

[Biker Biggles]

I dont have a problem with staff who work hard and do well being paid a bonus,but it should be a fairly moderate amount.We are actually paid a salery or wage to do our jobs,and that should be the figure that puts a value on our work.Whats gone wrong is that some people have been getting huge amounts of money as bonuses,and other lesser mortals have been encouraged to see bonus payments as salery.
As a way of dealing with the issue I suggest the government stops micro managing the banks and seeking to interfere in their affairs,but simply comes up with a figure(say £10000 per annum)and says that any bonus paid above that amount will be taxed at 90%.Job done.

Originally Posted by northwind

When Woolies went under, the knock-on effect was fairly minor. It took Zavvi out too, who were already shaky, but neither was providing a neccesary service. Our current economic system is completely dependant on bank lending, if you doubt it just ask yourself how we got in this recession in the first place- "credit crunch". Banks aren't being loaned (not given- loaned, with interest payable) money just to keep them afloat, they're being loaned money to keep them lending.

exactly the reason why we cant borrow our way out of the situation, its reckless borrowing that caused it.

Im pretty sure companies which are struggling like JCB, Ford, jaguar, and many others who employ 1000s are just as important to our economy. its not so much the products that are essential, its the jobs and economic movement they provide.

anyway, i hate politics stuff (and banks), so thats it from me

[northwind]

Originally Posted by jamesrichardson

exactly the reason why we cant borrow our way out of the situation, its reckless borrowing that caused it.

Im pretty sure companies which are struggling like JCB, Ford, jaguar, and many others who employ 1000s are just as important to our economy. its not so much the products that are essential, its the jobs and economic movement they provide.

With the first thing, that's not really the case. For one, our own banking crisis certainly was NOT caused by reckless borrowing, and for another not all borrowing is reckless. The example of Woolies is pretty good here, we're talking about short term low risk borrowing used to keep the profitable parts of Woolies afloat, which would have kept people in work and would most likely have paid money back. Not reckless at all. The reason for the bank bailout is that it should have a huge knock-on effect, because it'll stop other companies going out of business, and have a natural bail-out effect as companies will be able to borrow from the banks instead of the government.

And no, none of those companies you mention are as important to our economy as any of the major banks, just now- even if you just look at their own productivity and employment, and ignore the economic benefits banks give promoting growth and sales, RBS employs more people in their head office alone than JCB employ in the entire company! JLR employs 15000 apparently themselves, which is less than RBS and HBOS employ in Edinburgh alone, which in turn is a minority of the total employment. These are just stupidly big companies, it's hard to comprehend and I work for one of the b*****ds Apparently if my division in HBOS- the smallest of the business- was considered seperate from the rest of the bank, we'd still be one of the country's top 100 employers. HBOS alone employs 105000 full time equivalents in the UK, which is more than JLR + every single member of staff in every jaguar and land rover dealership + all of their delivery drivers.

Understand if you don't want to keep the chat going of course, just thought you might be interested to get a sense of the scale here. Most of us do not get very big bonuses

Originally Posted by Biker Biggles

I dont have a problem with staff who work hard and do well being paid a bonus,but it should be a fairly moderate amount.We are actually paid a salery or wage to do our jobs,and that should be the figure that puts a value on our work.Whats gone wrong is that some people have been getting huge amounts of money as bonuses,and other lesser mortals have been encouraged to see bonus payments as salery.
As a way of dealing with the issue I suggest the government stops micro managing the banks and seeking to interfere in their affairs,but simply comes up with a figure(say £10000 per annum)and says that any bonus paid above that amount will be taxed at 90%.Job done.

If you mean they should apply that figure IF the bank makes a loss, then I am more inclined to agree...although I am not fixed on it.

But it should not be applied to a bank making profit (see Barclays!) any more than it should be applied to any company making profit. The only proviso being that bonuses are 'properly applied', i.e. be 100% that a person made the company money before giving them a slice. That's what is winding people up now, the banks paid out bonuses to people who they thought had made them money but it turned out they hadn't (this is true for the simple reason that they would not have paid them anything if they had made the company a *known* loss).

[northwind]

Not to drag this debate up again, but I was bored at work and looked up some numbers... See up the page, when I said that banks are more important than Jaguar Land Rover and JCB... Numbers:

Banking employs over half a million people in the UK directly, and 4 million indirectly. It contributes 50 billion to the UK economy annually, and 9 billion a year in tax, which represents fully 25% of all UK corporate tax revenue, and 10% of our GDP.

[Biker Biggles]

Originally Posted by northwind

Not to drag this debate up again, but I was bored at work and looked up some numbers... See up the page, when I said that banks are more important than Jaguar Land Rover and JCB... Numbers:

Banking employs over half a million people in the UK directly, and 4 million indirectly. It contributes 50 billion to the UK economy annually, and 9 billion a year in tax, which represents fully 25% of all UK corporate tax revenue, and 10% of our GDP.

Talk about putting all your eggs in one basket.I know I sound like a stuck record,but what sort of leadership has this nation had over the last thirty years that allowed us to slide down this path to oblivion?Even investment bankers are clued up enough to advise you to diversify and have a wide portfolio.But not us.Close it all down,flog off the family silver and trust the banking sector to keep us all going.How insane is that?

[northwind]

Mmm, I'm not sure how true that is, the UK banking industry is basically collossal, it dwarves other industries just because of that, not neccesarily because they're weak... Compared with germany, italy, france etc we're not untypical other than kicking their a***s in finance. So it might be more a case of looking a gift horse in the mouth.

[Biker Biggles]

Germany and France in particular have much more balanced economies than us.They have protected and maintained their manufacturing base come what may,and it will stand them in good stead now when physical assets and ability to produce will be paramount.It appears to make sense to apply Keynsian reflation policies over there,so the Germans will start buying their Mercs and VWs,and the French their Renaults and Peugeots,but what of us?Reflate here and we will just buy a load of Chinese imports and our economy will remain where it is now----F£cked.

[northwind]

Yeah, but that's kind of my point, our economy is arguably only so imbalanced because we have extra strengths, it doesn't neccesarily devalue the rest of the economy. They may be balanced, but they're weaker. And we're suffering more shrinkage, but from a stronger initial position. It's all relative.

[Biker Biggles]

You could argue much the same point but say we have extra weakness in the form of a hugely downgraded manufacturing sector compared to France and Germany(and even Italy come to that)
You are right about the large finance sector in the UK,but all that is so easily lost in the blink of a computer screen as we are seeing now.We will see how it pans out over the next year or two,but I think the future looks very bleak for Britain,and some of the "expert" forecasters seem to be contemplating that as well.