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A new taxpayer-owned mega-bank

Robert Peston | 17:55 UK time, Monday, 3 November 2008

The great fear in the City about the Treasury taking stakes in three of our biggest banks is that this partial nationalisation will turn them into non-commercial public services.

No bad thing, some might say.

But it's not what the chancellor and prime minister want.

So they are putting the shares that will be acquired for taxpayers in Royal Bank of Scotland, HBOS and Lloyds TSB into a new company that will be owned by the Treasury, but will be managed at arms length.

That company will be chaired by a former finance director of Lloyds TSB, Sir Philip Hampton, who is currently chairman of the supermarket group Sainsbury.

Sir Philip HamptonHe knows banking better than most.

And his job will be to force the banks to:-

  • continue lending to homeowners and small businesses,
  • to prevent the banks senior directors from being paid more than is deemed to be fair and appropriate, and
  • to make sure that the banks grow their profits in a sustainable way.

Is there a contradiction between the Treasury's determination to sell its shares at a profit as soon as possible and its insistence that the banks must keep the lending taps open as the economy contracts, with the attendant risk some of the new loans will go bad?

Hampton, who is a shrewd banker, not only thinks that these are reconcilable ambitions, but that the interests of his new company will be closely aligned with those of other shareholders in the banks.

Which is as much to say that he could easily find himself siding with the City and not with ministers, if there were a dispute over - for example - whether the banks were lending quite enough to those viewed in Westminster as deserving cases.

So the Treasury is taking something of a risk by appointing him.

And there's a further risk in its decision to create the vehicle for owning the bank stakes as a formal Companies Act company.

How so?

Well as the chairman of a proper company, Sir Philip could not be formally directed to take this or that action by ministers.

If they were to dislike how this new company operates, they could sack him. But that would be jolly embarrassing for them. So, in practice, Sir Philip - and his chief executive, John Kingman, who is being seconded from the Treasury - will have considerable autonomy.

Oh, and by the way, the new company will also take control of Northern rock and the rump of Bradford & Bingley.

So Sir Philip is not taking on a small enterprise. In fact, what the Treasury has dubbed UK Financial Investments Limited will end up as one of the biggest bank holding companies in the entire world.


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  • Comment number 1.

    Can banks ever be trusted again ?

    If we want the answer to be "yes", then we will need an all-encompassing regulatory framework and employ a small army of investigators to ensure that banks meet their obligations. The FSA is manifestly unfit for purpose.

    We have to accept that we can't just allow greedy fat cats to syphon up huge amounts of shareholder/saver funds to bolster their lavish lifestyles.

  • Comment number 2.

    yet again this governments leadership only do half a job then mess up what they have already done, they had the chance to fully nationalise the banks and gain control of the banking system and securing it in the peoples interest but no they placate the overly paid bankers and waste millions in the process.
    the worst part is that this thing laughingly called our government is expecting us to thank them for not doing the job they get there massive wages for.
    i can only assume that the government are getting paid im bullion or diamonds rather than use the banking system they have helped ruin.

  • Comment number 3.

    Fantastic! All these bank holdings are going into a separate company, with a shiny new Chair who will presumably be very well remunerated.

    Of course, this is being done to keep the holdings at arms length from the government. So, are the nationalised banks free to pursue their chosen strategy subject only to Big Phil's shareholder oversight? Well, not exactly. They will have to lend to homeowners/businesses whether thry perceive the risk to be properly rewarded. They have to curtail Directors' earnings, and "grow profits in a sustainable way", whatever that means.

    So no Treasury interference there then?

    We already know that the lending target is total loans outstanding as per end-2007 levels, which we also know is what helped cause the collapse in the first place.

    I can't wait to hear how, and who, will decide what are "fair and appropriate" earnings for bank Directors. I'm old enough to remember the days of the Callaghan government that tried to set everyone's earnings by central diktat, with some body of the "great and good" (appointed by the PM of course) deciding who got what.

    And finally, the idea that anyone from Sainsbury's is the right person to talk about sustainable profits is laughable. They've been losing market share to Tesco/Asda/Lidl for years.

    Management of this portfolio should have been handed over to a private equity house to sort out and replace the dross. They'd have been way more ruthless on the incompetents at the top than will happen with the "arms-length" Treasury solution botched together here.

    At least it now becomes obvious why Barclays was prepared to pay so much to avoid having to join this bunch of losers.

  • Comment number 4.

    More jobs for the buoys as they go bob bob bobbbing along inthe sea of new lickquidity ,is this an attempt to keep control away from the next tory government ?

  • Comment number 5.

    Sounds like good news to me.
    How accountable will this company be to parliament?
    A bonus of all this may be that we all get to learn more about these financial institutions when Hampton gets hauled before various select committees from time to time.

  • Comment number 6.

    Yes, having got rid of this joker by the front door, Eric Daniels now finds he has crept back through the back door.

    Interesting times...

  • Comment number 7.

    I believe its a good thing that he is going to force banks to keep lending to small businesses. Otherwise how will they get the money to start up? And more small businesses means more GDP and employment, which will have postivie effects (hopefully) on the economy.

  • Comment number 8.

    Yet another exspensive quango, enforcer !

    One shambles to another by an inept Government long passed its sell by date.

  • Comment number 9.

    " a shrewd banker"

    That will make a nice change from the ones we've had recently: they were a shower of total bankers.

  • Comment number 10.

    "The great fear in the City about the Treasury taking stakes in three of our biggest banks is that this partial nationalisation will turn them into non-commercial public services.

    No bad thing, some might say.

    But it's not what the chancellor and prime minister want."

    Hmmm. Supposing the majority did support this and the pm et all did not, it would make no difference under dictator Brown. This guy appears to have the skin similar to a walrus in kevlar.

    ... this engineered financial crisis is neither 'natural' nor happening in isolation.
    As is famously attributed to Franklin D. Roosevelt, "In politics, nothing happens by accident, if something happens, it was meant to happen". The same can be said of global finance.

  • Comment number 11.

    Robert if the City fears the government takeover of Lloyds what chance is their of existing shareholders particularly institutions taking up the shares.

    Personally as a shareholder in Lloyds I would be happy to stump up the cash for 12% preference and/or normal shares. Not that my holding would solve the capital problems.

  • Comment number 12.

    "But it's not what the chancellor and prime minister want... [it] will be managed at arms length." - Robert Peston

    So they do not want accountability. Thank you for pointing that out so succinctly.

    "Is there a contradiction between the Treasury's determination to sell its shares at a profit as soon as possible and its insistence that the banks must keep the lending taps open as the economy contracts, with the attendant risk some of new loans will go bad?" - Robert Peston

    There plainly is a contradiction. Maintaining lending levels into a recession means burning a lot of extra capital on losses that could have been avoided.

    "Hampton, who is a shrewd banker, plainly thinks these are reconcilable ambitions." - Robert Peston

    Are you quoting him on that?

  • Comment number 13.

    He doesn't think they are reconcilable ambitions. He knows that the first two are political window dressing, to give the impression that labour is supporting the ordinary people.

  • Comment number 14.

    So the government are hoping that any profits gained from the bank shares will offset the huge losses from the property portfolio. Fat chance of that.

    Is this another off balance sheet item?

    This is one we will not find out about for years to come.

    They are throwing it into the long grass hoping we won't notice. Typical!

  • Comment number 15.

    here we go again.

    gordon brown and his government playing the "independqant of government" card whilst maintaining control over matters via the back door.

    indirect government which allows labour to claim success if something goes right or blame others when things go wrong.

    predictable, stale government.

    i trust the people of the UK will be able to see through this trick, as the BBC cannot.

  • Comment number 16.

    Oh what a good idea! Have a banker to determine whether the salaries / bonuses of other bankers are fair. Same pigs one trough. How about NO bonuses, their salary should be adequate recompense, no need for an incentive to do their jobs properly. If they didn't get bonuses, are they claiming that they wouldn't do a good job - if so fire them.

  • Comment number 17.

    OK so the guy who will be running UK Financial Investments Limited is the former finance director of Lloyds TSB which is chasing the takeover of HBOS and is now Chairman of a company which a former Labour Govt Minister - Lord Sainsbury - is involved in.

    Transparency is a great thing but very obviously open to interpretation !!

  • Comment number 18.

    Sir Philip Hampton is at least a ACA (Accountancy magazine Feb 2007) that is a start.

    Now let us see if he can, or is allowed to, implement a proper rational asset and liability valuation system (including Mark-to-market). The toxic waste must be exposed and dumped.

    (I also wonder why he is apparently not a 'Fellow' of the Institute of Chartered Accountants. Perhaps someone can find out?)

    If this new mega-bank is to be trusted and inspire 'confidence' it MUST implement the most robust valuation techniques - none of this half-way house stuff that seems to be all the rage at present (this week).

    I hope he will resist the pressures from his bosses to make things look rosier than they are, but having received a Knighthood in the Queens New Year's honours list for 2007 I am left a little worried that he may be too close to government and the establishment.

  • Comment number 19.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 20.

    At the risk of saying the same as others who are awaiting moderation, let me say what a waste of money. Creating another layer of management and somebody to blame when it goes all goes wrong is pretty typical.

    How about some taxpayer representation then?

  • Comment number 21.

    Yet more tax-payers money going into another quango manned by 6-figure earning idiots who are as much part of the problem as part of the solution.

    I am sick of these half-thought-out initiatives created on the hoof. I bet this scheme will not work as it is intended. Just more money down the drain.

  • Comment number 22.

    So now we have:

    UKFI aka Treasury to maximise value for taxpayers

    BOE to keep inflation under control

    FSA to regulate the financial market

    Four dismal failures, with only the government exceeding them in uselessness.

  • Comment number 23.

    "1. At 6:31pm on 03 Nov 2008, chris wrote:

    Can banks ever be trusted again ?"

    Ehm... nope. You know what banking is? How it works? The effect it has on our society? The effect it has on our economy? Environment?

    Banking and the nature of our money is perhaps the third greatest problem which the civilised world faces.

    Here's a quote for you:

    "The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight-of-hand that was ever invented. Banking was conceived in iniquity and was born in sin. The bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money and control credit." - Sir Josiah Stamp

  • Comment number 24.

    #5 5imple5imon

    "A bonus of all this may be that we all get to learn more about these financial institutions when Hampton gets hauled before various select committees from time to time."

    Well, it's a thought. It would be the first time ever that we learnt anything from anyone being dragged before a select committee. Perhaps Hampton isn't quite as skilled as others at the sort of politico-managerial non-speak that has become mandatory for communication at this level?

    Doubtful, though, isn't it. If he's a good enough pal of the PM to be trusted with an "arms-length" appointment such as this, the least he's got to have is an ability to sound convincing while at the same time saying nothing that means anything.

  • Comment number 25.

    Well it is a practical solution, and such an animal was always going to be a strange beast.

    The ring fence isolates the government to some extent from any negative impact of UK FI Ltd policy implementations, because there are bound to be some.

    It gives a framework for the taxpayer being repaid. It gives an umbilical between the government and UK FI Ltd which can be cut easily in due course. And it allows UK FI Ltd to function with at least the potential of separation from government dictat. The governments job has to be one of regulation not commercial operation.

    It does look to be a bit of a poisoned chalice and there will be fallout at some point. The current, and well established government policy, is to put distance as rapidly as possible between the downside of any commercialisation and the government, preferably with the hope that seperation is in the eye of the beholder, even if the negative fallout is entirely predictable it, is then blamed on the commercial operator, a result of market forces.

    The issue of bonuses is in reality a red herring. If shares are judged to be low then there is plenty of opportunity to see subsequent growth in share option value. It is quite obvious that substantial staff cuts will be used to boost profit. and therefore share price throughout the sector. The current situation will be used as an opportunity to press forward with IT and self service facilities in the financial retail sector. It will be a cruddy inflexible service for the customer but nobody will fight it.

  • Comment number 26.


    I'm surprised that after the failure of the state to prevent this ridiculous bubble you could imagine that putting banks under political control would run them 'in the people's interest'. Instead, we'd see lending used as a tool of political and social policy. Do you think that politically ran banks one or two years ago amidst soaring house prices would have done a better job of avoiding credit risk? Or do you think they'd have been under pressure to continue and increase lending to poorer 'hard working families struggling to get on the housing ladder'? What about 'strategic' (ie, lossmaking) industries which just happen to be politically high profile? And how well do you think government would carry out its bank-regulation duties if it owns all the banks?

    The irresponsible '2007 levels' edict that the government will no doubt have to go back on (or at least shoot full of loop-holes) should have tipped you off. Political control would be nothing but a licence for government to use taxpayer-backed cash to make dodgy loans to special interests and the politically correct or powerful. I can almost imagine the yacht-bourne conversations now...

  • Comment number 27.

    Interesting to see the comments coming in here.

    Those attacking the appointment of someone from Sainsbury's due to their "poor performance" are causing me some confusion; While Sainsbury's does have a banking side to it on the whole it is a different animal to a bank, also it should be noted that the last CEO put Sainsbury’s on the back foot and was voted off the board a while ago. Since Sir Philip Hampton took over things have improved. Sir Philip Hampton was the financial director of Lloyds TSB, which was one of the Banks in the UK least affected by this whole mess, isn't that reassuring!

    Sir Philip Hampton also wrote a paper for the government back in 2004 which lead to the Regulatory Enforcement and Sanctions Act 2008. While it should be noted that the act applies to the regulation of local authorities rather than banking; we should consider that what the banks need now is close regulation; so transferring the skill base should not be difficult. What we need right now is someone who knows what is what, has a plan and is prepared to have a go. If Sir Philip Hampton didn’t think he could do this then it is doubtful that he would have taken the post. This man apparently knows his stuff so we should all back him to the hilt.

    So basically I want to know who the people shouting down his appointment want! Seriously if you don't want him then you must know someone better otherwise what is being said doesn't make sense.

    Our government are not supposed to make us happy right now; we are facing a very real threat to our way of life and the government is taking the action it thinks is needed to protect our national interest over everything else. Short sighted thinking and the fear personal loss and hardship should not blind you to the truth that the men and women who are trying to find a way out of this mess probably know a lot more about the whole situation than the rest of us. It is all well and good saying that the whole thing is being handled in a bad way, but if a better solution cannot be substantiated then really how can we know that this isn't the best way of dealing with the issue?

  • Comment number 28.

    I am sure that HMG has no intention of trying to tell the banks how to lend money. They will stop some of the excesses as after all these bankers have destroyed so much shareholder value that they should all be sacked without compensation for gross negligence- so that should be a reasonably open door. They might also stop the banks getting into areas they should not be in because they were incentivised to outperform each other in the shareholder value stakes- banks should be boring and grow slowly with senior directors who have status but not riches- that should be left to the wide boys in investment banks who should not be allowed to take deposits or be clearers and not have enough resource to threaten the whole system.
    I think HMG will want to sell their stakes as soon as they can- no way do they want to distort the market any more than they have done already in the interest of saving the whole system. Give them the benefit of the doubt- there may be a lot of doom and gloom about but it could be so much worse.
    The Banks really do take the biscuit- they want to pay bonuses to top performers to stay in the game- is this the game that has cost the world's taxpayers $3 trillion and goodness knows how much shareholder value they have destroyed- if they want to leave- these so called superstars should be given a thank you and told to take their rather expensive risks somewhere else- after all even those that thought they were making money were only doing so because a colleague was losing it- you simply cannot make money unless you add value which the banks blatently have not.

  • Comment number 29.

    At the moment I believe that the money injected into Northern Rock is shown as part of Government debt presumably because they borrowed the money. Will the debt now increase or is this a device to take the NR debt out of the statistics?

  • Comment number 30.

    @ denzil69, number 15.

    It was the Tories who started putting things at arm's length to avoid the bad publicity that failure brings. Privatisation and 'agencies' were the Cons doing.

  • Comment number 31.

    Philip Hampton is a great choice - I worked with him as did Marcus Agius in the City. Perhaps Philip should have a word with Marcus re Barclay's terrible value eroding proposal and convince him that the HMG is the way to go. Failing that Barclay's must not lock themselves in for so long with this incredibly dilutitive /expensive proposal. Shareholders need to force a revison or better yet a HMG solution.

  • Comment number 32.

    I am sincerely hoping that LTSB investors see sense and reject the whole deal. Otherwise they will be giving up an independent, well run, well capitalised institution for a crock of the Brown stuff!

  • Comment number 33.

    A situation was developing that was potentially incoherent and this attempts to address that.

    It may or may not succeed.

    However I am mildly disturbed to witness posters often stating something along the lines of 'can we trust the banks?'.

    As if all banks were the same.

    They are not.

    Like many people, I am been appalled at the revealed behaviour of some banks.

    I have withdrawn my company and personal funds from two mainstream 'misbehaving' banks and loaned these funds to institutions where the emphasis is clearly on ethical and moral behaviour.

    Others might consider doing likewise, then it will become irrelevant to you what the 'big four' bankks or the Government for that matter, do.

  • Comment number 34.

    The banks have behaved in a thoroughly reckless fashion, gambling with peoples' savings, pensions and lives. It will be a very long time before they are trusted again, if ever, and unfortunately most people have to use them. Halifax, and Bradford and Bingley were solid, safe places for savers when they were Building societies and they managed to survive 2 world wars and the 1930s depression. Ten years after becoming banks they decided to get on the debt creation carousel and have had to be rescued. Savers should consider building societies and credit unions for their money as these institutions lend out money carefully and at a lower ratio compared to their deposits. In fact credit unions can only lend out what is saved with them.

  • Comment number 35.

    It might be moderately interesting to note that "Sainsbury's Bank" is actually 50% owned by HBOS ... who knows mabe Sir Phil has designs on expansion?!

  • Comment number 36.

    Echoing virtually everyone here--- the whole progress of events seems just unbelievable...

    The biggest casualty in this ongoing car crash (after I suppose; common sense, decency and truth) is regard for the abilities of the people making and participating in these decisions.

    Okay.,,,nationalise and control the banks if you want...or don't...if you want....those ideas and their consequences can be debated

    But to pretend that whole cohorts of mutually exclusive ideas can be just yoked together because it is decided they will be wished into conjunction is like is just some sort of lunacy---- of the sort specialised in by the Soviet Union at it's most woebegone

    De-centralised centralisation.... prudent recklessness...... grow profits in a sustainable way by lending at 2007 levels which saw loans become so loss making the entire system has (nearly) collapsed..... ....

    I know, why don't we just short circuit this...give Sir Phillip a Peerage now, and £5Million..... and move on to whatever will be the solution after the next election right away instead of wasting the next two years ---and causing more harm than good.??

  • Comment number 37.

    It is easy to criticise the Banking Establishment when you do not really understand the issues.

    To make it easier still I strongly recommend you all take the Crash Course on this clip:

    It is really quite informative and very funny.

  • Comment number 38.

    In Spain they announced today that the government will "tell" the banks that they have to (no need for "persuasion" down here)
    1. defer 50% of monthly mortgage payments from the unemployed and needy families, such as the recently bereaved, including the self employed whose businesses are adversly affected
    2. spread the arrears so created onto the remaining mortgage monthly payments from 2011 until the end of the term
    This seems to me to be a far more effective intervention method than taxpayer owned megabanks and a much quicker way of feeding through government intervention

  • Comment number 39.

    John Kingman, says Peston.
    There's that name again.

    Google Daily Mail, John Kingman, Robert Peston and the Financial Times.

    Like Robert Peston I am only a seeker after the truth.

    Kingman is said by the Daily Mail to be Robert Peston's deep throat.

    Can Robert Peston comment?

  • Comment number 40.

    So now we have:

    The next Pinewood, sorry Bretton wood II blockbuster!

    You thought it was over............
    Your Bank still had cash........
    Just when you thought it was safer to go Bankrupt............

    In this Halloween event of the century 20th Trillion Red Box presents ...

    Blairs Witch project chapter11... .A Nightmare on Downing Street

    Already up for 10 Darlings, this sequel to the prequel about an ordinary understudy to the fantastic Count Blair of TransAtlantica defines the sheer horrow of how the keeper of the purse lies side by side in the bed of the wicked Bankers of Fleece Street.

    This dark horror/comedy unravels a multi-layered plot of intrigue and deception that culminates in a massacre performed by a formerly +AAA cast including

    Gordon Brown.......Inocent Bystander
    Alistair Darling.......The wicked Cash Sucker

    Bradford Pitt........Bowler Hat Murderer 1
    Bingley Crosby....Bowler Hat Murderer2

    Halifax.........Marked by the cross
    Lloyd...........The enforcer on Black Horse

    And a special appearence by

    Sir Northern Rock.....

    "I just had to get on the phone and shout abuse at this sadistic hard place that just sat there and (re)possessed the vulnerable.. a truly cinematic experience''...Jonathon Ross Film 2011

    At Cinemas NOW!!!..... or download any news channel to watch the Horroe unfold

  • Comment number 41.

    Gordon Brown has always been at his best when recognising his own limitations – in particular this desire to meddle in things that he knows, like his bitten nails, that he should really let alone. As such, his best acts have been ones of denial – in particular, his decision to make the Bank of England fully independent in 1997 and then his vow to stick to Tory spending limitations during the late 90s. Now, it looks like he is trying to repeat the trick. He knows that, like an alcoholic with the bottle of cheap whisky on the shelf, he won’t be able to leave the drink alone. And he has little enough trust in others to believe that they will either. Brown’s solution is thus to lock the whisky away in the cupboard and give the key to a his local minister.

    So one would probably be right to assume that Brown’s trying to create a genuine separation between government and ‘UK Financial Investments Limited’, so as to make it very difficult for him, or any successor, to interfere with it. And this is almost certainly a good thing – just as granting independence to the Bank of England was a good thing. So, one should give credit where it is due.

  • Comment number 42.

    Although I am an avid reader of your on going articles about the credit crunch I always get the distinct impression that you over sensationalise your interpretation of the events as they unfold. That I suspect is because you believe in good old fashioned journalism. Don't let the facts spoil a good story.

    In your latest article you use the emotive phrase "Sir Phillip Hampton will be employed as chairman to FORCE the banks into moderating their over exuberant behaviour. Whereas I would hope Sir Phillip approach will be to ENCOURAGE these people to modify their behaviour for the good of all concerned. The government, the taxpayer as well as the banks and their shareholders.

    The people running our banks may have behaved foolishly in recent years but we must not forget that bankers are proud, albeit sometimes arrogant, people who like the rest of us do not take too kindly to being lectured to by the likes of journalists and other people on how best to conduct their business. Even if we do agree with much of what you have to say. Just give us the facts without your spin.

  • Comment number 43.

    ah, let the fox guard the chickens - what a smart idea...

  • Comment number 44.

    It looks reasonable on paper, but like all things government it will soon turn into a quagmire of regulations, confused reporting arrangements, lack of role clarity, empire-building, political finger-pointing, recrimination, inefficiency, waste and buck-passing. I'll lay money on it (if I had any).

  • Comment number 45.

    Re My # 37
    The link does not seem to work (for me at least).
    If anyone can advise how to watch B, B and Fortune's Sunday evening show "Silly Money"
    I would be grateful.

  • Comment number 46.

    Meanwhile in Nigeria,

    > Banks were borrowing money from each other to buy shares in other banks

    Well, I wonder where they learned tricks like that?

  • Comment number 47.

    to #34

    Who voted for demutualising building societies? Yes that would be the depositors, who either became shareholders of their greedy and ultimately unsuccessful little banks or who sold out the mutuals for the sake of a few hundred measly pounds.

    People argued at the time that the building socities should stay as they were providing properly thought out mortgage products to customers who were able to pay and with a firm base of depositors and without a legion of shareholders whose interests are naturally at variance with depositors. Of course those people were roundly mocked and derided. It was of course very dull and heaven forfend anything should be boring and well run!

    I'm not sure why there is so much shock at finding the banks were hopelessly untrustworthy. The conflict between the interests of depositors and shareholders is the natural state of banking and whomever thought that this sector should be deregulated was certifiably insane or criminally negligent. Bankers were handed limitless power to make money and they did. Wouldn't you have done the same given the same power and lack of accountability? We never should have trusted them in the first place, not trusting them is the correct state of mind and the basis of effective regulation.

    The government are obviously trying to strike a balance between control of the nationalised banks and allowing them to operate as effective businesses. The end result which they have to aim for is a fully regulated (the job of government) private banking sector (the job of business) and this new organisation, though it may be a camel in design, does seem intended for that future ultimately. Lets just hope it doesn't wander off into the desert.

  • Comment number 48.

    So its make the rules as you go along.

    Heres yet another example of crisis management.

    This move only underlines Messrs Brown Darling and lord Mandy havnt a clue what to do.

    So Sir Phillip is going to force them all to lend as before?

    Has no one learnt anything from this mess?
    You borrow to make money and develop a business in a sensible manner.

    You dont borrow to support a lifestyle you cant afford.


  • Comment number 49.

    Sorry to comment twice in a row but have only just read comment #42.

    How can I put this godfreybrown. If you think that bankers have earned themselves anything other than the right to be wholly disregarded in anything that they might say, do or think, then you have completely misunderstood how badly they have behaved and how criminally incompetent (or deliberately dishonest) they have been individually and collectively.

    Millions of people are going to pay with their jobs, their homes and in the third world, their lives, for the thoughtless arrogance and greed of a few thousand men and women. In more enlightened times the senior bankers would have paid with their heads! A lot of humility is in order.

  • Comment number 50.

    " 33. At 8:54pm on 03 Nov 2008, JohnConstable wrote:

    However I am mildly disturbed to witness posters often stating something along the lines of 'can we trust the banks?'.

    As if all banks were the same.

    They are not."

    Of course they are. They all follow the same model;

    Bank borrows deposits, pays interest on deposits.
    Banks use deposits as reserve.
    Banks create new money and lend it out at interest.

    And the results are the same; Credit Boom and Credit Crunch, with only a Fractional reserve, ALL Fractional Reserve Banks are fundamentally unstable.

  • Comment number 51.

    Hi there,

    I liked your presentation:

    at the beginning you mention that the cheap cash that enabled the bubbles in the west to form came from Asia.

    Why has this cash dried up? Is is because this cash itself was cash that had been spent by western countries importing goods from these countries? So it was one big leverage game of a global scale. Which came tumbling down when western banks defaulted?

    A simplifies example would be I start with £100 I lend it to you you lend to someone else they lend it back to me. We repeat 10* at the end we each owe £1000 even though there is only £100 capital. Thus when someone defaults there is a loss of £1000 even though we started with only £100.

    Or is there some other reason?

  • Comment number 52.

    What a complete shambles.

  • Comment number 53.


    You remember Brown being hailed by the BBC as saviour of the global banking system with his master plan that the rest of the world were following?

    You do remember yes?

    Well what is every other government doing with their shares, are they setting up this type of holding company?


    What? It is only Brown who is doing this? The rest of the world didn't do the same?

    I must have missed that report... Or maybe you are writing it as I write this? Along with preparing to take mandleson apart for refusing to disclose details of his meetings with Oleg?

    The wonder of blogs, is that all you have written is instandly available with a single click - no searching, no diging through old papers etc... This isn't going to go away...

    You are writting follows ups for these two things - yes?

  • Comment number 54.

    So this new 'arm length' company is going to tell these little Jonathan Ross type buggers how to go on.....?

    Having had massive taxpayer oops sorry, Government support they must do as they are told, surely to goodness?

    But, hang on, in the USA, the banks receiving the billions of taxpayer support are paying about half of it out in dividends over next few years....why?

    Well, if they weren't allowed to pay out these dividends they wouldn't 'play ball' and do what Obama and Co want them to (sorry, a bit presumptuous there).

    Who has the power?
    Not the little people, thats for sure

  • Comment number 55.

    It is a disaster that the govt have taken stakes in the banks as the one thing that the govt is absolutely hopeless at is running anything - think of schools, hospitals, railways, nationalised industries...the list goes on and on. Let's hope that they don't interfer in the running of these businesses, get their money out and go as soon as possible.

    While they control the banks, people will not wish to borrow from them as lending becomes a political decision not business decision. Because of restrictions on pay the best staff will drift away, shareholders will then drift away and the British banks will end up being unprofitable, state run disasters that end up being sold cheaply to EON or some other country in a few years time.

  • Comment number 56.

    Hampton's tenure as FD at Lloyds was not a success - in fact I think he was sacked.

    During his time the Lloyds share price suffered terribly and as I recall one of the problems was his undermining the Board's view on one or two key issues in his briefings to the City, on which his judgement was later viewed to be wanting.

    Perhaps he's pally with labour - after all Sainsbury is.

    Labour's old boy network at work again.

    Let's hope he's learned from his mistakes and isn't as hopeless as the people who have appointed him have been in handling the credit crunch.

  • Comment number 57.

    Blairs Witch project chapter11... .A Nightmare on Downing Street.......


  • Comment number 58.

    Sir Philip Hampton, there is a name with a history...
    Was it not Sir Philip Hampton that produced the Hampton report on regulation for the Treasury a few years back that advocated a light touch approach to regulation... the approach Gordon Brown has been championing throughout Europe, until the credit crunch took hold. At which point he followed his normal pattern of trying to rewrite history by saying that he had been pushing everyone else for tougher regulation.
    I wonder how well this new company will be regulated?

  • Comment number 59.

    Off topic, I do not agree with the sentiments expressed about Robert Peston at yesterday's Treasury Select Committee meeting on the banking crisis. The committee seemed to think Robert Peson had too much influence. In my view he has earned his audience by being very good at his job, and far better than the MPs on the Treasury Select Committee at keeping the public informed and explaining what the banking crisits is about.

  • Comment number 60.

    Talking about regulation, I had the misfortune to watch the Chancellor, Governor BOE and Adair Turner (not sure what he does) defend their stance on what they knew about NR and BB and the takeover (or not) of HBOS to the select committee.
    Well it was all due to extraordinary circumstances, nobodies fault 'cause it couldn't have been forseen. (Sir Humphrey nodded wisely).
    One telling question was about regulation of foreign owned banks (Iceland).
    Ah we're looking into that said Turner (confidently).
    My question would be who is going to regulate the Spanish Giant (Santander) and how will we ever know when this bank gets into trouble?

  • Comment number 61.

    doesn't seem like this bail out is working, simple me says we are just paying back the debts to those who no longer trust our asset valuations. The cynical would say it wasn't meant to aid recovery, just pay back the elite who trashed the whole system in the first place.

  • Comment number 62.

    "to make sure that the banks grow their profits in a sustainable way."

    And will they be managed by the same people who drove them into bankrupcy?

    Some people live in a world all of their own imagination.

  • Comment number 63.

    "So, in practice, Sir Philip - and his chief executive, John Kingman, who is being seconded from the Treasury - will have considerable autonomy."

    So they said of the companies, battalions and regiments of the former Soviet Union. The commander is the one to command and take the fall if things go wrong but the political commissar is the one that truly "gives the orders".

    Similarly, Sir Philip may be "in command" but the Treasury Commissar, John Kingman is the one who gives the relevant orders !!

    Welcome to the Union of Soviet Socialist Britain !!

  • Comment number 64.

    #26 For more than 40 years, China ran its banks on political rather than commercial principles. In the run-up to its ascension to the WTO, China had to write off trillions in bad debts run up by SOEs (State Owned Enterprises - an oxymoron if ever there was one) !!

    Now its banks are clean and operating on sound commercial principles, China wants to keep it that way.

    On the other hand, our Illustrious, Most Beloved, Great Helmsman and Paramount Leader wants to do just the thing that China got gladly rid of in 2,000 !!

    All hail, his great financial prudence !!

    And if all those Barclays shareholders who objected so strenuously to their deal with the Arabs want to sell their shares in Barclays, I am now *certain* there will be many takers after such good news from the Ministry of Truth !!

    Why do I get the feeling that the Arabs bargained far harder for their financial "help" that Gormless Gordon could and that this news is yet another sop to divert attention from his failure to get free/cheap funding from the Arabs ??

    Does Gormless Gordon not realise that he is asking Absolute Autocrats to support his Socialist Ideals ??

  • Comment number 65.

    #27 It is totally irrelevant whether Sir Philip knows his stuff or not. So long as he is shackled to a Political Commissar, he will have no freedom to do the right and proper commercial things that contradict the government's political ambitions !! He will have to toe the Party line or be sent to a gulag in the Outer Hebrides as Banker-in-Chief to the wild life there !!

  • Comment number 66.

    #41 To continue your analogy, Brown then whips out a duplicate key (his Treasury Commissar), opens the cupboard and quaffs the lot before anyone can stop him !!

    So much for it being a "GOOD THING", as they say in "1066 and all that" !!

  • Comment number 67.

    #60 Regulate Santander ?? Why bother !! They'll be buying up the rest of Britain soon and very cheaply too !!

  • Comment number 68.

    "Even Barclays cannot be immune to those looming losses - though, as of now, it can probably allow itself just a small smile of self-congratulation, having avoided putting out the begging bowl to British taxpayers."

    Robert Peston's blog on 31 October 08

    Addendum after current news - Barclays must be grinning in a near-demented manner at the fate of those banks that have to submit to the will of the political commissars !!

  • Comment number 69.

    So corporate pay is now also at arms length from the government...very nice...I now have no faith in the banks....sorry its worse than that, I now have no faith in the long term viability of the western capitalist model, I think we are effectively now a bankrupt nation living on borrowed time, even in the 1970s we were able to manufacture and export our way out of recession, now the entire economy is balancing on fluff and cotton wool.... I fear its too late, Even if Just one pillar of the economy (property prices) were to really crash...and I mean really crash...say by 50%....that would totally wipe us out.....sorry guys, but we are doomed

  • Comment number 70.

    If you are looking for prudence and openness
    the CO-OP bank is a model for the new organisation. Greed and avarice has no place in the CO-OP movement, witness it's smooth passage whilst all other banks are clamouring for their rescue from the government. It is in line with the idea for the new company hopefully listening to the what the nation needs and not want the money lenders overiding need for bigger and bigger profits at any cost.
    The Rochdale Pioneers gave the ordinary man and woman the ability to stake their claim in society. This may just alter the direction of the country through the slow down to come..

  • Comment number 71.

    Well someone must run the show. Too much regulation? Too little regulation? Let commerce do what it does best? Help small businesses which grew up on easy credit? Help the public who ran up ridiculous debt on easy credit? Can't respect Brown as he single handed got us into this mess. Cameron will do a better job because .....?These comments go on and on and on.

    Everyone in any position has got something in their CV which does not reflect well on them. Oh, someone might say, that noted economist whose name I have forgotten predicted all this. The range of opinions you find amongst economists and financiers is so wide there will always be someone who got it right.

    You cannot trust someone to run the show purely on the basis of past record. It is what they do in the situation they find themselves using all their experience of success and failure that matters.

    I now refer to football. Spurs got a previuosly successful manager in Ramos. He was a disaster. Newcastle got a poorly regarded manager three weeks ago and he has turned it around. Spurs got a successful manager in Harry Rednapp and he is doing exactly what was expected.

    Getting the country out of this mess depends as much on the personality of the leaders as on their policy. We do not trust any of our 'leaders' (their fault, not ours). It is only once we trust someone that their policy, however sound and coherent, becomes what the country wants to achieve.

    Our real problems are not economic, but with the sort of people (whatever their views) who aspire to become our leaders.

  • Comment number 72.

    Dear Robert
    This entire crisis is a complete shambles,
    The tax payer has paid the Banks Billions of pounds, and Yet they will still not lend at 2007 levels,---- and that was the root cause of the shambles. "Why lend at a level that caused the problem in the first place,"?
    The Banks therefore have OUR MONEY, which they are hoarding until they make up all the losses they have suffered,
    "So do we need BANKS? ---why not do away with them completely after all its the Bank Of England that promises the bearer the sum to be transacted.
    Lets all be a customer of the Bank Of England, etc, lets all use it as a BACS, system, and yes ---lets Nationalise ALL THE BANKS, AFTER ALL there is NO PRIVATE MONEY OUT THERE, BECAUSE THERE WERE THEN THAT MONEY NOW STOPPED BY THE ICELANTIC BANKS, WOULD GET BACK TO THEIR RIGHTFUL OWNERS
    "Who the hell do these Bankers think they are, stopping people from getting the money that is rightly theirs,
    It begs the question,
    "who owns the money in a bank account."?,

  • Comment number 73.

    Hmm, a national investment company ?

    A UK Sovereign Wealth Fund!

    Why not create National Property Fund ?

    It could Nationalize the homes of folks who would otherwise be repossessed, and then rent those Homes back to the original owners......

    It would be a National Housing Association.

    It would save people the trauma and uncertainty of moving home or being homeless, bed and breakfast is more expensive to the Gov't than Council Houses.

    Not a Vote winner perhaps but then nor is confiscating small shareholders shares !

    See Bradford and Bingley.

  • Comment number 74.

    Found this analysis, very relevant to this discussion ....its worth a read IMO

  • Comment number 75.

    Another of those heartwarming 'force the banks to continue lending' stories already contradicted by Ld Mendellson this morning at 08.35hrs on your own Today (aka 'Toady') programme, 'well, we can't force the banks to do anything..'(Never heard of laws, meLud?)

    "The BBC's business news website won a major award (the other day). Once again, it's the ABI Financial Website of the Year. This year more than ever, it is richly deserved. Record numbers of people are checking in with our business pages - as many as 2.65 million people a day. It helps make the BBC one of the most-read websites in the world"..

    Richly deserved award and I'm a Leprachaun.

    Yup. The BBC website is right up there with Jif and Skippy.

    2.65 million rather scared-stiff folk logging in and scouring the site from cover to cover looking for some guidance or hope - nay - even some really incisive reporting where, for once on the BBC, the Great and the Good actually get a thoroughgoing 'reaming' and go away in tears and some good actually comes of it.

    And no doubt as the number of court orders, repossessions and foreclosures goes off the barometer and tens of thousands of peoples' lives are turned inside out the BBC will be right up there recording it all and get an award for reporting 'the human cost'..

    Meanwhile we'll content ourselves with being the hapless victims in the grand show. Like those BBC wildlife films where the big cats have cosy names and the gazelle cops it in the end, while the film crew stand around muttering 'nature can be cruel I'm afraid'...


  • Comment number 76.

    # 55

    Have you got any evidence that nationalised industries run worse than private?

    Royal Mail was able to provide the most superior postal service in Europe as well as providing profits to the budget for over 2O years. Yes, both the conservative and labour governments just took the money and never invested in it. Surprise, surprise, it became loss making.

    Your example of the railway is a bit strange if I think of the privatised railways that I have the unfortunate fate to use daily.

    If the government was to use (which it is not) the nationalised banks to achieve economic policy aims, why would you want to measure them by the same measurements than other banks? Then the only measure would be effectiveness and not efficiency.

    If the government was to run the nationalised banks (which it is not) to compete with commercial banks, it could knock them out of the market rather quickly, but then the outcry would be because of "unfair competition" of not having to pay dividends to unnecessary shareholders.

    The French used a state-led banking system for over 3O years and they were quite successful with it, providing liquidity to an economy that otherwise had a chronic shortage of it. They achieved a much higher economic growth (in spite of their economic structure that is not growth-inducive) than the liberal UK. However, they failed with the attempt to influence the economy through nationalised banks in the beginning of the 198Os. Yet, while French banks regularly loose on speculation (ever since the Credit Mobilier), they are rather attentive to government wishes and it works.

  • Comment number 77.

    I'm sure the Beeb will suffer the same Pay restraints and staff cuts as the the rest of the economy.

    After all the license fee won't be able to remain at the high level it is for long.

    Especially with the damage to Pension Funds etc.

    It would be a morale booster if the license fee was, say , halved.

    Save ordinary families some cash in these hard times.

  • Comment number 78.

    No Ivory towers left in UK PLC (subsidiary of Middle East Global Investments).

  • Comment number 79.

    #71 : Boilerbill

    "The range of opinions you find amongst economists and financiers is so wide there will always be someone who got it right."

    Yes, but what you have to remember is that a huge proportion of these "experts" are effectively pre-programmed to pass judgments only with the pre-supposition that the decisions of social/political authority are of the highest intellect and integrity, with no trace of being either negligent or self-serving. Of course if you start from this standpoint it's not possible to raise doubts about the correctness of a policy either at the time it was put in place, or, later, when it has been ineffective.

    I think you would find, if you trawl through the opinions of genuinely capable people who are neutral of pro-authority bias, that there has been major criticism of the quality of authority's decision-making - at the time, without benefit of hindsight.

  • Comment number 80.

    Yet again, they miss the point. After eight hundred years of complete autonomy, the banks cannot live like the rest of us, so they are now holding us to ransom at all levels, retail, commercial, and economic. This only addresses the retail, whereas if anything the complete and utter collapse of corporate finance is the fulcrum on which the recession will turn into a disaster of biblical proportions.
    Yesterday's Select Committee demonstrated just how little grasp the High and Mighty have of the situation - or at least are willing to admit to in public. The collapse of trade credit and international shipping may be serious for China, and that may have geo-political repercussions: you can't cut off the oil to the machine without things overheating.
    If the banks won't do it, get rid of them and find us something which works.

  • Comment number 81.

    Dear Robert

    Are we being Honest about this down turn, "Whats it Hiding"?
    Is it about Pensions, and the Financial Institutions, inablity to pay the sums required, and so ---they engineered this credit crunch, to half the pension funds and force the final salaries pension funds to close?
    One issue is ABUNDANTLY CLEAR,
    since Lamont and Brown, taxed pension Funds, £229 billion has been wiped from the Funds, peoples savings taken by the State never to be seen again, these two VULTURES have made this crisis which has now forced ordinary people to be expected to work until they are 70, and now in this crisis which politicians created in the first place, to loose all their savings.
    "Where has all this personal money gone"? " "where is it and why is being stopped from being given to the owners who need it?"

  • Comment number 82.

    Is this a case of poacher turned gamekeeper......? I would not want this job as it seems impossible.

    As you rightly point out commercial reality suggests reducing exposure during an economic downturn or at least raising interest rates to reflect risk (this is essentially what the banks are doing by not passing on rate cuts). Isn't this how this all started......sub prime etc etc..!

    Whilst in the eyes of the public capping remuneration to senior bank executives will be popular in practice it is hard to regulate as it is subjective and likely to lead to a skills loss..

    Both of the governements intended consequences of the bank bail out will be detrimental to the overall government objective of controlled sustainable growth in profits.

  • Comment number 83.

    China Daily updated 2008-11-04

    "The central bank has also decided to end credit quotas, *a measure it put up in the beginning of the year to rein in loan growth*, its spokesman Li Chao told the Xinhua News Agency."

    WHile the Chinese slammed down the sluice gates to the loans deluge, our government is still whinging about "not lending at the 2007 level" !!

    Since they have lots of savings, $2 trillions-worth in US$ to start with, they can now afford to loosen the flood gates a little to stimulate growth.

    Oh, if only Britain could have their problems of a *mere* 9% growth !!

  • Comment number 84.

    So Key Facts Illustrations (KFIs) will be produced for potential mortgagees of UKFI... Confusing!

    The casual, almost throwaway "oh and by the way the company will also take control of Northern Rock" belies Robert drawing a line under their torrid past year, I think. I don't believe this aspect is immediate, however?

    Surely the planned 60pc bonuses to NR's 4000 staff must be reviewed alongside the other divisions of UKFI?

    At a conservative estimate of GBP15000 per staff member (and I believe the minimum is GBP14000, so it's very conservative), then this scheme will cost GBP36000000!

  • Comment number 85.

    #81 - good question.

    I'll tell you what I am SURE of: there is a covert (closest confidentes - word of mouth only) strategy in Brown's government to build up complete dependency of people on the state, this absolutely ensures he wins the next election. This is why the most vulnerable - the ones being most hit (targetted in effect) by the recession, with foreclosures and repossessions etc - are getting so little protection. It is, I believe, in line with this strategy.

    Have you, for instance, noticed that every time Brown is interviewed about the recession he manages to slip in 'winter fuel payments for the elderly'?

    Naturally everything Brown is doing flies in the face of the ethics espoused by Keir Hardie who actually formed the Labour Party in 1900 and who is so admred by Brown. But Brown is notoriously selfish (cue: 10p in £ tax abolition) and ruthless (cue: got Blair out of the way) and knows he can strengthen the Labour vote (already advantageously distributed in his favor) by this dependency and knows also that it is probably the only weapon he can use to win an election.

    There will be a 'raft' of welfare measures in the next budget (handouts) and more to follow as the election draws closer.

    That is if Brown lasts that long, which he won't. Mercifully Obama will win, the USA will reinvigorate itself economically on its own - I amsure of that - and will withdraw behind its own frontiers and from the world scene to a huge extent introducing protectionist measures as it withdraws, China will not stump up cash for the IMF, Rev Brown's teachings will become irrelevant and he will fade (protesting interminably) from the world scene.


  • Comment number 86.

    45 - hitthebid

    It is available at but because the url contains a load of special characters, I cannot post it. If you Google Bremner, Bird and Fortune+Youtube, you will find the link half pay down page one.

  • Comment number 87.

    ~70 TubbyMorton

    The Co Op famously charged GBP100 per month for exceeding an authorised overdraft and was remarkably (albeit understandably, from their side) slow in contacting the customer to discuss terms - That is not a model I want to see prevail!

    Yes, we'll all have to pay for our banking in the future, but not with punitive charges designed to compensate the society for not being able to compete with banks in terms of "self generated wealth"!

  • Comment number 88.

    So basically the UK now has a sovereign wealth fund, albeit with borrowed money as opposed to large foreign currency reserves.

  • Comment number 89.

    Dear Robert

    Very close to the mark, Brown is an out and out socialist, with Communist tendancies,
    That I am very sure of.
    Control to control and control, that 's his regime, and the very fact it is supported by Further controls over British citizens makes it only too obvious.

  • Comment number 90.

    Can somebody please explain to me why any of these bankrupt banks should be given taxpayers' money? In my view, they should have been allowed to collapse and their good bits sold off.

  • Comment number 91.

    It's interesting that Fred got the chop and no doubt many others to follow. I would like to understand how the Head of the FSA, Head of the Treasury and good old Merv have survived.
    This is the tripartite that is supposed to monitor, regulate, look out for us and what have they done except sit on their backsides, make a huge mess and then dictate to the banks what the banks will be required to do to prevent fallout when the tripartite stuffs up again.
    Go figure!

  • Comment number 92.

    true-liberal @ 50

    When I, in effect, stated that all banks are not the same, I did not mean that they did not run the same generic business model, essentially FRB but rather, that some ran their business in a more prudent, ethical and moral way than others.

    I wonder if people really understand that we, ourselves are effectively individual banks - we loan money to these institutions and they lend it on.

    I have already pointed out that financial institutions, e.g. some banks, building socs and credit credits operate in a prudent way with the money that you loan to them.

    And there is another alternative available to us now - social lending - on the Web via sites such as Zopa - whereby we cut out some business friction - the conventional middleman - a bank - and more-or-less lend directly to an entity that requires a loan.

    As a political point, I look on with wry amusement at a Labour Government bailing out these disreputable banks.

    As far as I can see, a genuinely socialist Government would be letting these 'fat cats' go down the plug-hole, whilst simultaneously promoting the ethical counterparts such as credit unions, co-op etc.

    But then they are consistent, they don't even offer support to 'partnerships' such as the mooted Royal Mail plan, along the lines of the very successful John Lewis Partnership.

    Socalist Government?

    I do not think so.

  • Comment number 93.

    # 89

    Brown as socialist or even communist? You must be joking. There is not a bit of trait of either in him. Much more like a continental conservative.

    He likes control, no doubt, but so does the church and most political parties...

  • Comment number 94.

    In the BBC money guides on the business page under 'Your Bebts' is a little dropdown called 'bankrupcy explained'. So quaint and so BBC. Bit like having a help section on 'Death Penalty' with a: 'What's it really like when the rope tightens?'. Real life experiences can be added.

    Anyway - as this is the business blog I'll just point out it needs moving to the 'Running a Business' and also adding to 'Your Tax and Benefits' sections now.
    'Your Home' needs 'repossession' adding.

    Under 'Life and Work' alongside 'Facing Pyschometric Tests' perhaps some thoughtful BBC-style homilies like 'How to cope with nervous breakdown (when your whole world vapourises after the above)'.

    Under Pensions 'What to do if you don't have a pension'. Which will be a short one, 'work on till you drop dead from exhaustion' or similar?

    Yours thoughtfully,


  • Comment number 95.

    #92 - folk still shop at John Lewis then?


  • Comment number 96.

    It is rather anachronistic that in the joyous days of bounty in the 1990's we all sold our share and rights to stay mutualised for a quick buck. Selling the protection of mutuality for promised fast growth, and a quick pay out. What has happened to all those building societies and mutual companies that we sold out from, and handed over to the financial speculators ? Would we want them back now, more secure stable but boring growth, and homes for our savings ?? Has anyone actually done a comparison between the financial performance of the remaining mutuals, versus those now share-holder managed companies. There existed in the past safer investment organisations, yet for a quick buck most of us gave them up, and now ten years down the road we are seeing the impact.

  • Comment number 97.

    guycroft @ 95

    For the people who work at John Lewis/Waitrose as partners in the business ... they enjoy participating in what Saint Obama calls 'spreading the wealth'.

    Don't you agree that that is a very sensible way to motivate the people working in the business?

    If they find trading conditions difficult right now, I suspect the partnership ethos will help them to pull through in a better way than more 'conventional' businesses.

  • Comment number 98.

    #97, hi

    had not heard of JL for so long wasn't sure they were even still going!

    Yes, John Lewis scheme, could not agree more. My mum told me about many years ago and even then I thought, wow! And when I was old enough to appreciate it and went into a store I was struck by how fantastically well turned-out and courteous all the staff were.

    When I was a Chief Engr for a Lincoln company local to me I once had a vehement argument about leadership and motivation with a senior manager who thought everyone should just work for the good of the company (per se), no I said, you have to have incentives. 'No', quoth he (and being very well remunarated), 'read the books, Guy, read the books'. Look, says me, I trained in the finest management school around, the British Army, don't tell me about leadership and motivation. Wasted on him of course..


  • Comment number 99.

    Once again, by giving the city the arms length control of the banks that it desires, the government is putting the interests of a wealthy elite above those of the overwhelming majority of UK citizens. They have been talked into trying to rebuild, in more or less its original form, the system which failed so spectacularly.

    It is becoming clear that by withholding credit or charging exorbitant interest rates, even for credit worthy customers, the banks are destroying the lives of many people and pushing the economy into a deep depression.

    The banks should be ordered to act in the interests of its principal shareholder, us.

  • Comment number 100.

    stanblogger @ 99

    I would have to agree that right now, these 'troubled' institutions, in time-honoured manner are royally screwing over their customers.

    For example, I have recently made a capital repayment on a mortgage and have just received the paperwork showing the adjusted monthly repayment.

    Next March I come off the BBR tracker on that one and go onto the standard variable rate ... which I calculate is 36% more than the current monthly repayment i.e. hundreds of pounds more.

    I can handle it, or more precisely will do everything I can to not let that situation actually occur but for millions of people it will simply be a case of giving them a good kicking whilst they are struggling.


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