Why it is time for Stephen Hester to give up his bonus

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Stephen Hester, chief executive of Royal Bank of Scotland, has yet to declare whether or not he will accept the bonus, shares worth about £960,000, offered to him in addition to last year's salary of £1.2 million.

The government say that Hester's contract was drawn up by the last government and changing things would be more costly than to go on. The value of the bonus was not specified in that contract. But David Cameron reportedly made pronouncements that Hester’s bonus should be no more than £1 million. One day later, the bank’s remuneration committee has given the go-ahead for the near one million pound bonus.

The remuneration committee point out that Hester has met his targets for the year, including helping to stabilise the bank. Various non-core assets have been sold off and a new risk appetite framework has been embedded, whatever that means. But the share price has continued to fall and small and medium-sized businesses are still finding it difficult to gain access to funding from the bank.

It must be remembered that Stephen Hester is not Fred Goodwin, the former chief executive at RBS, who presided over the bank during its near collapse. Hester was brought in to sort out the mess. Many are arguing for Sir Fred to be stripped of his knighthood. This would seem appropriate, given that he single-handedly, through an over-inflated sense of his own importance and infallibility, and a shameless desire to line his own pockets, destroyed a 300 year old bank and helped bring down the British economy in the process. There has been surprisingly little talk of criminal proceedings. Instead, Goodwin is retired, on a 6 figure pension.

RBS is currently 83% owned by the British government, which makes it, to a good approximation, a state-owned business. People who work for state-owned organisations - civil servants - do not usually reap these kinds of rewards. There is a good argument that the bank's staff should be on civil service pay scales, and as for bonuses, well, the very concept is alien to most of those working in the public sector.

What about the bankers’ favourite old line, that this is the market rate, that banking executives could get the same elsewhere, and you have to pay big money to get the right people? Well, perhaps it is time to test this theory. If Hester and the board staged a walkout because of reduced remuneration, would the functioning of the bank be jeopardised? Would the banking system come grinding to a halt? No and no. We should call their bluff on this one. An excellent board could be hired at a fraction of the cost. The Guardian points out that the Bank of England’s top executives are paid roughly one fifth of RBS’s board. With an 83% majority shareholding, there is no better opportunity for the government.

All of this augurs very badly for the future of banking in the UK in general. If the banks are still offering extraordinary bonuses for people doing no more than they should be doing, or worse, if stupendous rewards are still being offered for the taking of vast risks, as they still are elsewhere in the world of investment banking, then it seems we have learnt nothing from the financial crisis. In the depths of one crisis, we are laying the foundations for the next one.

Finally, a point about the RBS remuneration committee. Why does this elite club of city financiers have the power to set the level of pay and bonus for the board? In the case of RBS and in the case of every other financial institution, shareholders are not getting enough say in matters of boardroom pay and bonus levels. In this case it is the British government; in other cases it is pension funds, fund managers and millions of small shareholders who nominally own these companies, but appear to have absolutely no rights on this crucial issue. And it is crucial. It is not just a matter of prudent financial management, it is an issue for society as a whole. An unequal society is an unhappy society.

The best solution would have been for this bonus not to have been offered. But Stephen Hester should recognise the sensitive nature of the problem; he should bring about the second best solution by returning it.

Secret meetings, deals & political fog

This week the lack of political transparency in Northern Ireland was again highlighted by the secret meetings at Stormont to discuss the future of the Department of Enterprise and Learning and the Justice Ministry.

While a reduction of departments in the Executive is welcome, secret meetings and horse trading over restructuring does little to give the electorate confidence in local democracy.

In response Green Party leader, Steven Agnew MLA has stated, "In the interests of democracy, decisions about the number of departments and the appointment of Ministers should be done in full public view at the Executive and Review Committee and not in behind closed doors meetings. What we need, like the issue over party political funding in Northern Ireland, is complete transparency rather than behind the scenes deals."

It's clear to see that the parties involved in secret meetings are giving political expediency priority over good governance. Under the d'hondt system they accept that Alliance Party should have one ministry but simply opting to get rid of DEL in order to keep David Ford as Justice Minister is just not acceptable and it does not reflect good governance.

The Executive must engage in a proper restructuring of how the Assembly does business for that is what the people of Northern Ireland deserve from their elected representatives.

Green Party NI AGM - Steven Agnew's leaders speech

The Green Party Northern Ireland AGM took place on Saturday 29 October 2011. Following his re-election as leader, Steven Agnew made his leaders speech. Watch coverage filmed by Mark Bailey below.

Green Party NI AGM 2011 - BBC NI Politics Show

The Green Party Northern Ireland AGM took place on Saturday 29 October 2011. Watch coverage from the BBC Politics Show, broadcast Sunday 30 October 2011.

Westminster fails older people in Northern Ireland

On Tuesday evening our MPs proposed a motion in the House of Commons for the UK government to reverse its decision over cuts to winter fuel payments to older people. Payments will be reduced by £100 to over 80s and £50 to over 60s.

Fuel poverty, where households have to spend over 10% of their income heating their home, is a serious issue here and cutting the payments will lead to unneccessary suffering. Many older people have to choose whether to eat or heat their home in winter.

The facts are stark - in Northern Ireland 44% of older people are suffering from fuel poverty (2009 survey) whereas in England the figure is 15% of older people (2010 survey).

205 MPs voted for the motion, including many of our own Northern Ireland MPs and Labour MPs. Shockingly 280 MPs voted against the motion - it seems older people in Northern Ireland are not a priority for them. Pensions Minister Steve Webb appeared unmoved by the plight suggesting the cuts were "less than a pound a week".

Let us know what you think on this serious issue. Contact your local MLAs, write to Owen Paterson MP, David Cameron PM and Nick Clegg DPM. Making your voice heard will help.

Contact info:

MPs - www.parliament.uk/mps-lords-and-offices/mps

MLAs - www.ageuk.org.uk/northern-ireland/get-involved/campaign/contact-your-political-representatives

The death penalty debate should be relegated to history

The Green Party notes with grave concern the actions of Lagan Valley MP Jeffrey Donaldson and six DUP colleagues in supporting an early day motion at Westminster in respect of the re-introduction of the death penalty.

The entire direction of international human and civil rights law is towards the abolition of the death penalty. In a time of economic crisis it is astounding that DUP MPs believe the matter is worthy of debate. 

The death penalty is a cruel anachronism which should be relegated to history. There is no convincing evidence that the death penalty acts as deterrent to serious crime, particularly one would assume, for those seeking 'martyrdom' through terrorist acts.

There are many examples of individuals wrongly convicted for serious crimes for which the application of the death penalty would have resulted in terrible mistakes. It is very hard to appeal a conviction from the grave.

Both the UK and Ireland are founder signatories of the Council of Europe. This organisation was set up in the aftermath of World War II to promote co-operation in the field of democracy and human rights. All Council members are party to the European Convention of Human Rights and the majority of Council members, including the United Kingdom, have ratified a protocol calling for the complete abolition of the death penalty.

It is shameful that a local elected parliamentarian wants to move the UK towards a position closer to that of Iran, Saudi Arabia and North Korea rather than to be aligned with our European colleagues. I am confident, should a debate take place, that the people and their elected representatives will drop any calls for judicial killing.

Conor

Eye-catching, but generally silly

It is conference season for the major political parties of the UK. It doesn't need to be said that, in and around conference season, the major parties tend to release a flurry of new, eye-catching policy ideas, and this year has been no exception. The Conservative Party conference is being held this week in Manchester and two of the mooted policies have caught the eye for being distinctly lacking in environmental consideration.

Firstly, Eric Pickles, the Communities and Local Government minister, seems to have won the day regarding bin collections. Before the general election, Mr Pickles went on record saying that weekly bin collections were a "basic human right". Now, he has announced that new money will be made available to councils to ensure that they can maintain or re-instate their weekly collections.

Well. I am very pleased the government includes ministers who are proponents of human rights. But this one doesn't come as high on my list as suffrage, education and good health care.

In fact, if I were to meet Mr Pickles, I would tell him that, personally, I would prefer my bin not to be taken away weekly. Wheely bins are completely animal-proof and there's no food waste in it anyway (I prefer my food to go into my stomach). In fact, I don't throw much away at all, with the recycling facilities that are available.

So it's not difficult to reduce the amount of waste you generate. And if all the bins contained less waste the bin lorries would have to come less frequently, they would not need to be so large, they would not use as much fuel and they would not fill so many acres of our valuable and beautiful land with our garbage. Everybody wins.

And personally I think there are far better "human rights" the government could be spending our money guaranteeing for us. Please Mr Pickles, build a new school or hospital somewhere instead.

The second government initiative that circulated hours before the Tory conference began was a revised motorway speed limit. Philip Hammond, the Transport Secretary, has called for consultation on raising the speed limit to 80 mph on our motorways. An 80 mph limit, it was claimed, would bring major economic benefits to the country, and besides the 70 mph limit was outdated.

Well. Perhaps I am outdated myself, or a contrarian, or both. If I were to meet Mr Hammond I would ask him to consider reducing the speed limit on our motorways to 60 mph. A car travelling at 60 mph is less likely to be involved in an accident and any accident is less likely to be fatal. The risks increase with higher speeds. The fuel efficiency of any car falls off a cliff when it is driven faster than 70 mph. An increase to 80 mph, over the millions of journeys that take place on our motorways each year, is going to increase fuel consumption and drive up our nation's collective greenhouse gas emissions.

It has been suggested that an increase in the number of 20 mph zones within towns would offset the environmental damage caused by the 80 mph motorway limit. This is sadly not true. 20 mph zones were introduced as a way of reducing the number of accidents (with some success, it is true). They do nothing for our overall fuel consumption because cars are, in general, as fuel-inefficient at lower speeds as they are at very high speeds. From an environmental point of view, 30 is better than 20.

Besides, various studies have shown that lower speeds on the motorways actually improve traffic flow on congested routes. This is the reason we see variable speed limits on our most congested motorways.

And I would increase enforcement of my lower speed limit as well.

So I would call on the Tories to avoid these unnecessary populist measures. Think more deeply - perhaps there are votes to be won by taking a more radical line on such issues. A lot of people care for the environment these days.

What is going on here? Are these issues part of traditional Tory dogma? No, of course not. These are populist measures, aimed at winning a quick headline and a few cheap votes. What happened to the idea of the "greenest government ever"?

And finally, I suspect such announcements are designed to distract attention from the Tories' other, somewhat dangerous and damaging policies. Yes, George Osborne, your cuts are still wrong. And, I suspect, they are designed to distract us from the fact that there are still very serious differences with their coalition partners, the Liberal Democrats. When George Osborne says that taxes will only be cut when the government can afford to do so, it is a political statement, not an economic one. Abolition of the 50% tax rate will create divisions in the cabinet like no other issue that the government has faced so far in its 18 month lifetime. The government may find tax cuts difficult to finance, but they would dearly love to do it. The real problem is that, with the Liberal Democrats prepared to fight any tax cut for the rich, what they really cannot afford is the trouble this will bring around the cabinet table.