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Lloyds Bank

South Africans bid farewell to Nelson Mandela
(Picture from Facebook)

As the world bids farewell to Nelson Mandela, I am wondering why Alex Salmond hasn’t been to South Africa to pay his respects. Nor has the city of Glasgow, with its special ties to the great man, sent a representative. Were they not invited, like the Dalai Lama? Or was the journey too far or too expensive or too carbon intensive? Or did these politicians not need to clothe themselves in the mantle of respectability which Mandela brought to the role of political leadership?

MPs voted themselves a big pay rise

MPs voted themselves a big pay rise

Certainly most of our political leaders need Mandela’s cleansing power. We wait to see, for instance, what they will do with this week’s recommendation from the “independent” Parliamentary Standards Authority for an 11 per cent pay rise for MPs. And this at a time when public sector increases are being limited to one per cent. Alex Salmond and the Scottish Parliament’s presiding officer Tricia Marwick have set a good example by saying it will not happen on their patch. The current salaries of £66,000 for an MP and £58,000 for an MSP must seem like a Saudi king’s ransom for someone on the average wage of £26,500 a year.

No wonder MPs often have an over-inflated sense of their own importance. They float in a world above reality. At least a quarter of the House of Commons thought they could defy the laws of honesty and fair dealing in the expenses scandal. Now they are contemplating defying the laws of austerity.

Lloyds - fined for mis-selling

Lloyds – fined for mis-selling

This week we also got a shocking reminder that the top bankers are floating even higher above reality. Not content with last week’s fine of £325m for fixing interest rates, the Royal Bank of Scotland was fined another £61m this week for breaking international sanctions against pariah regimes in Burma, Cuba, Iran and Sudan. Lloyds Bank, which merged with the Bank of Scotland, was also fined, in this case £28m for miss-selling insurance policies and investment plans to unsuspecting customers through a particularly heavy-handed staff incentive scheme.

We’ve been saying more farewells this week – to the nine victims of the helicopter crash in Glasgow. As we did so, word came though of a tenth victim, another customer in the Clutha pub, who has died of his injuries in hospital. And in a strange co-incidence, news also came through at virtually the same moment, that all 22 helicopters of the same type, operated by Bond Air Services, have been grounded for what appears to be an unrelated cause.

Emergency helicopters grounded

Emergency helicopters grounded

Bond said that one of their EC 135s in the north of England had developed “an indication defect” and, as a precaution, all their aircraft of the same type were being taken out of service until further notice. It’s left police and ambulance services in Scotland and the North of England having to make alternative flying arrangements. But could it be that we have found the mystery cause of the Glasgow police helicopter crash? And should we not have grounded all EC 135s immediately after the accident until the cause had been found?

We have yet another mystery to deal with this week – what has happened to the Scottish botanist who has gone missing in the mountains of Vietnam? Jamie Taggart who runs the Linn Botanic Gardens near Helensburgh was last seen heading into the hills on the Vietnam/Chinese border on a plant-hunting trip on 2nd November. He was due to fly home at the end of November. Friends of the gardens have been raising funds to finance a search by local search-teams in Vietnam but so far no trace of Jamie has been found. He’s said to be an experienced walker and has been to the area before.

Mike Russell Education Secretary  Much to be pleased about?

Mike Russell
Education Secretary
Much to be pleased about?

Finally, there’s been some worrying news about Scotland’s primary schools. Class sizes are increasing instead of falling and teacher numbers are going down. The average class size is 23 and only 13 percent of younger pupils are now in classes of 18 or less, the SNP government’s original target.

The education secretary Mike Russell says despite the class size figures, there is much to be pleased about – pupil/teacher ratios have remained stable, school buildings have improved and attendance rates are up. He’s also squeezed a little more money out of his budget ( £6m ) to increase the number of PE lessons. Currently only 88 per cent of primary schools are providing the required two hours of PE a week.

According to the teachers I know, the Christmas holidays can’t come soon enough. There’s still many a Nativity Play to go, many an angel to lose her wings and a shepherd to throw down his tea-towel. And I’m off to my first Christmas lunch of the season.

highpay1There is something wrong with our society when reports on two consecutive days highlight the enormous gap between the rich and poor. Today’s Annual Survey of Hours and Earnings shows just how many young people are being paid less than the minimum wage. The total is a staggering 299,000 – or just over 1 per cent of all jobs in the UK.

At the same time, earnings for the rest of us (well, all bar some senior executives) rose much more slowly that the rate of inflation. In practice, the Office for National Statistics (ONS) found that the “median average gross weekly earnings” across the UK, full-time or part-time, hadn’t changed in the last year.

There was some good news, however. The pay gap between men and women narrowed slightly. Women’s annual earnings rose by almost 2 per cent to an average of £22,900. It means that the gender pay gap has fallen below 10 per cent for full-time workers, and that the pace of change has started to increase.

But the pay gap only reflects the “average”. Some female workers – non-teaching school assistants, for instance – remain some of the lowest paid in the country. And curiously, the gap widens again among the highest paid in the country. These figures from the ONS add fuel to the debate over the levels of executive pay.

The High Pay Commission’s report yesterday argued that some of the sums paid annually to senior executives were “corrosive” to the UK economy. The commission pointed out that there has been, over the last 30 years or more, an increasing disparity between what top executives earn and what the rest receive in their pay. It went so far as to claim that “high pay [was] creating inequalities last seen in the Victorian era”.

In a year-long inquiry, the commission found that top executives at a number of FTSE companies had seen their take-home pay rise by more than 4,000 per cent since the 1980s. The banks came in for particular criticism. For instance, the former Barclays chief executive, John Varley, was said to earn £4,365,636, which is 169 times more than the average worker in Britain today.

The commission also claims that the salary paid to the chief executive at Lloyds Bank, now partly owned by the taxpayer, had gone up by more than 3,000 per cent since 1980, to more than £2.5m. In both cases, the difference between the chief executive and the “average” bank employee had grown many times over, although both banks dispute the findings.

The business secretary, Vince Cable, said that these disparities in pay were not good for society. “It’s not right,” he said, “that we have the situation that’s been happening over the last decade where we have vast extreme awards paid on completely unrelated to the performance of companies. And that’s not good for the consumers, it’s not good for people who own the companies, it’s not good for the people who work for them, and that’s really got to be addressed.”

The findings led Deborah Hargreaves, who chaired the High Pay Commission, to say that there was “a crisis at the top of British business and it is deeply corrosive to our economy. When pay for senior executives is set behind closed doors, does not reflect company success and is fuelling massive inequality, it represents a deep malaise at the very top of our society.

“The British people believe in fairness and, at a time of unparalleled austerity, one tiny section of society – the top 0.1 per cent – continues to enjoy huge annual increases in pay awards. Everyone, including each of the main political parties, recognises there is a need to tackle top pay.”

It also prompted the leading employee engagement expert, Alan Crozier, to say that top earners were damaging the UK’s ability to weather current economic conditions by undermining the motivation of employees. “Engagement,” he said, “is the driver of performance and it is being sacrificed perhaps unconsciously by a few at the top.

“In today’s knowledge-based economy, businesses need employees’ cooperation, inspiration and ability to build relationships, but there’s precious little motivation in knowing that directors’ pay has risen almost 50 per cent in a year – unrelated to performance – when pay increases are pegged at 3 per cent and inflation is rising.

“The old chestnut that you need to pay top-whack to retain top talent ignores the fact that top talent needs talent around them to deliver results. It beggars belief that directors are so oblivious to the consequences of allowing such disparity. Of course senior executives should be well rewarded, in line with their contribution and the internal relativities of their business. But if those funds are available for reward, surely they could be distributed more equitably.”

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The Copa del Rey – a bit bashed <em>Picture: Erik1980</em>

The Copa del Rey – a bit bashed Picture: Erik1980

By Stewart Weir

Saturday
Semi-final weekend in the respective premier knockout cup competitions either side of the border, with one tie holding a slight advantage when it came to national interest. And you’ve guessed – it wasn’t Motherwell–St Johnstone.

On a day when Wembley was filled with the blue and red of Manchester, Hampden looked somewhat sorry only a quarter-filled – or, more noticeably, three-quarters empty – with the “hordes” from the shires of Lanark and Perth.

Motherwell deservedly won 3–0, with Saints ‘keeper Peter Enckelman the unfortunate recipient of the “Estate Agents Award”, presented to the man who did most to sell a semi.

But while Jamie Murphy and John Sutton scored crackers, you couldn’t help but notice the empty seats around Hampden, which raises the question – as ever – of why a match like this is ever taken to the National Stadium.

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Justification for building it appears to be the only answer. Because with just under 12,000 deciding the big day wasn’t that big in reality, Tynecastle or Easter Road would have made much better sense.

In the south, City shocked United. The next day, Aberdeen and Bolton were just shocking.

Sunday
From Steeltown to Steel City. I know it began yesterday, but given that it lasts a mere 17 days, there was always going to be time to catch up with the action from Sheffield and the Betfred.com World Snooker Championship.

Saturday brought two big stories. One came before a ball was potted in anger, and was so big it even made the front page of the Scottish Sun. It was the collapse, or near-collapse, of 110sport, snooker’s biggest management stable and a twice-former employer of mine. Indeed, in healthier times, I once was a board director there.

It is a sad state of affairs, which is about all I’m willing to say on the matter as I am restricted for space, something that won’t be a problem when my tale comes out in book form. Take that as the first plug.

Damned or doomed, 110sport’s demise was of their making, nothing to do with events conspiring against them, bad luck, chance or fate.

And certainly not a curse – although the second big snooker headline from the weekend could fall into the category.

No first-time winner of the world title had ever successfully defended the title in Sheffield, hence “the Crucible Curse”. And as if by magic, or other powers we cannot explain, title holder Neil Robertson crashed out, beaten 10–8 by Judd Trump, who this year looks to be fulfilling the potential everyone knew he had.

Speaking to Stephen Hendry last week, he believed Robertson could have been the one to break that trend. But he also conceded that few, other than the person who returned the cup from the previous year, could appreciate the enormity of the task and the expectation around being champion – because regardless of who you are, what you’ve done or how well you are playing, all anyone wants to mention is the dreaded curse.

So the next first-time champ, whoever you may be, be afraid… be very afraid!

Sunday also saw Mandy Fisher, who founded the World Ladies Billiards and Snooker Association 30 years ago, resign as chairman, chairwoman or chairperson (delete where applicable).

Fisher, 49, began the women’s circuit in 1981 and her commitment has been the main reasons it has survived this long. That said, it has always been the very poor relation in the snooker family. While the winner of the world title (an event open to men and women) pockets a quarter of a million, ladies winner Reanne Evans won just £1,000 for retaining her world title in 2010.

“Mandy’s heart was always in the right place,” said former WLBSA secretary and tournament director Jane O’Neill, “[but] there were always the knockers.”

Which many give as the reason why women can’t play…

Monday
And still in Sheffield, Barry Hearn, the Don King of snooker, unveils announcement after announcement for next season.

A ranking event staged in Australia in July (on the back of Robertson’s success), a World Cup in Bangkok, a biennial event where Scotland will be defending champions (and holders since 1996 when since the tournament has been absent never mind bi-anything), and a new format for the Premier League as it becomes a World Snooker event,

Sky Sports will broadcast an event for the next three years, prize money on the circuit will rise to over £6m (although it was once above that) and there will also be the Brazilian Masters, with traditional rules, namely unwaxed balls…

Hearn did however threaten that he wants players to come forward to record a new version of the Chas ‘n’ Dave “classic” Snooker Loopy, which reached number six in the chart 25 years ago.

Who will step up? Hopefully not some clown.

I can also exclusively reveal the song might be revamped to include an instrumental halfway through, just in case Ronnie O’Sullivan doesn’t turn up for his verse.

Tuesday
And the sale of Rangers takes another twist after the club’s chairman, Alastair Johnston, questioned the ability of would-be owner Craig Whyte to fund the reigning Scottish champions to the level required.

Whyte has been reportedly trying to purchase David Murray’s 85 per cent stake in Rangers since last November, thus wiping out their debt with Lloyds Bank.

However, Johnston and some of his fellow board members also want to see money spent on the team.

“Based on the documents we have only been able to review within the last week,” Johnston said, “we are disappointed that they ultimately did not reflect the investment in the club that we were led to believe for the last few months would be a commitment in the purchase agreement.

“Given the requirement to repay the bank in full under the proposed transaction, there appears to be only a relatively modest amount of money available that would positively impact the club’s operations, especially as it relates to an urgent requirement to replenish and upgrade the playing squad.”

As much as he is disappointed, there isn’t a queue outside Ibrox willing to part with £30-odd million to be then told what they should and shouldn’t be doing with their money.

Indeed, there is only one other offer on the table – this sees Rangers FC being exchanged for an apple, a kite (in good repair), a dead rat and a string to swing it with, 12 marbles, part of a Jew’s-harp, a piece of blue bottle glass to look through, a spool cannon, a key that wouldn’t unlock anything, a fragment of chalk, a glass stopper of a decanter, a tin soldier, a couple of tadpoles, six fire-crackers, a kitten with only one eye, a brass door-knob, a dog-collar (but no dog), the handle of a knife, four pieces of orange-peel and a dilapidated old window sash.

That bid offer comes from a Mr T Sawyer, USA. Negotiations are ongoing, although they say there is nothing of significance in the last item listed.

On the field, Rangers ease past an equally dilapidated Dundee United 4–0. So easy was it that striker Nikica Jelavić had to amuse himself in other ways.

And this week’s competition is: from Paul Mitchell’s commentary, what would you pay good money for?

Wednesday
And as if nothing ever happened, Paul McBride QC will not now face legal action from the Scottish Football Association after expressing regret over recent criticism.

McBride had attacked the SFA after Rangers trio Ally McCoist, Madjid Bougherra and El-Hadji Diouf escaped further bans for their part the “Debacle of Parkhead XXVII” (as you can tell, there have been a few over the years).

McBride had represented Celtic boss Neil Lennon over his disciplinary charge and had accused the SFA of bias, publically stating they were “the laughing stock of world football” and “had been shown to be not merely dysfunctional and not merely dishonest but biased”.

Then he changed his mind, mentioning in his excuse note that he recognised “that offence has been taken to my remarks by the Scottish Football Association as an organisation, its council and its staff, and for that I express regret. I have a lot of respect for many individuals within the SFA…”.

What brought about that change of mind isn’t clear. Legal action, or of being reported to his bosses, who could say? Or did the threat of a parcel bomb just focus things a wee bit more?

I should say, I am not making light of what is a serious matter, and particularly dangerous series of events, least of all for the poor buggers collecting and delivering our post. But I’m surprised no one from the cry wolf brigade hasn’t commented on the potential of a conspiracy, given the Royal Mail have been entrusted with the safe passage of these unsafe parcels.

Terrorist officers from Strathclyde Police have conducted searches and enquiries into who is behind these threats, and have focused extensively on Ayrshire – where despite using ultra-modern and groundbreaking profiling techniques, they have been unable to track down the perpetrators as everyone in that area shares the same DNA…

Thursday
And in the wee small hours, Real Madrid return home from Valencia to triumphant scenes where the city celebrates their winning of the Copa del Rey after beating arch-rivals Barcelona 1–0.

Cristiano Ronaldo’s extra-time header gave Jose Mourinho his first trophy as Real Madrid coach. But it was more about what happened on the team coach – or, more accurately, what happened under it – that made this particularly memorable.

It brings back memories of other cup celebrations gone wrong, like the night in 1988 when Dean Richards and John Jeffrey took the Calcutta Cup for a walk down Rose Street.

Of course, Sergio Ramos will be reminded for evermore about dropping that cup off the bus.

But what is the best case of dropsy after a cup final? Steve Morrow, Arsenal’s League Cup goalscoring hero, takes some beating – or rather took a beating.

Friday
Two days to go to the final Old Firm game of the season and Strathclyde Police chief constable Stephen House believes everything from three league points, to the climate and a day off work could brew up mayhem in the west of Scotland.

“It’s a Bank Holiday,” House said, “it is the last meeting of the season – which is crucial for a result – and the weather forecast is hot. That means people will be drunk and they will get injured or raped, assaults go up and so does domestic violence.

“We do not see the clubs as the enemy. We do not blame Celtic or Rangers for the violence. The people who are responsible are those who use knives, fists or whatever other weapons on their fellow human beings.”

And I don’t disagree. I have seen the frightening aftermath of an Old Firm game first hand. But I’ve seen similar scenes throughout the country when there is not a Celtic or Rangers top to be seen.

Not meaning to trivialise in any way the concerns of some, but I do wonder on occasions whether all this reported serious crime is down to the factors the chief constable details, or the fact the same gentleman has vowed to put 1,000 extra officers on the streets.

More cops doing their job usually means more arrests and more frightening statistics. And more calls for more resources for more of the same and more overtime next time.

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RBS logoThe carve-up of parts of the Royal Bank of Scotland is under way. It is being forced by the EU’s competition authorities to sell 318 branches, mostly in England under the revived Williams & Glyn’s brand. The deadline for declarations of interest was today (Tuesday).

What’s made this auction suddenly all the more interesting is a deal reached by Sir Richard Branson’s Virgin Money. It’s been known for some time that the entrepreneur wanted to expand his financial empire. But he didn’t have the resources to make a bid for the RBS assets on his own.

That changed today when he announced a deal with the veteran US investor, Wilbur Ross. Ross has taken a 21 per cent stake in Virgin Money for £100 million. He’s also offered some £500 million, more then enough to help Branson lodge a serious offer for the RBS branches.

So why should Ross want such a link with a relative new entrant to the financial services market? In a statement to Reuters, he said he was “impressed with Virgin Money’s well-deserved reputation with UK customers and with its growth strategy”.

Virgin is one of the new entrants to the UK’s retail banking market. It only acquired a banking licence at the start of this year when it bought Church House, a small institution which focuses on mortgages and deposit accounts. Other new entrants – such as Tesco and Metro Bank, owned by the US entrepreneur Vernon Hill – have said they’re not interested in the RBS assets.

They won’t have a clear run, however. At least two other serious players are in this market, both of which already have a strong presence throughout the UK.

Spain’s Banco Santander has already absorbed Abbey and Bradford and Bingley – its other interest, the Alliance and Leicester, is soon to be brought under the red Santander badge as well. It wants to be seen as more than just a player in the mortgages and personal finance areas.

The National Australia Bank also wants to expand its branch network. It already owns the Clydesdale Bank in Scotland along with the Yorkshire Bank. But it’s long wanted a wider spread of retail outlets across the UK.

The attraction of the RBS assets is that these branches share about about 5 percent of the UK’s SME customers. All three contenders believe it would allow them to expand fast in what is undoubtedly a mature market, but one that that’s still thought to have strong potential.

The branches up for sale account for 14 per cent of the RBS network. But the task of separating them is likely to prove quite difficult because the business has about £24 billion in loans and £22.5 billion of deposits which would have to be divided between the new and old owners.

The branches are expected to cost the winner between £1 billion and £2 billion. Also under hammer is its payment processing division, WorldPay. That’s expected to cost private equity firms around £3 billion. The deadline for that is Wednesday.

Potential bidders will have to conduct due diligence on the Royal Bank. They’re expected to complete that by the summer, possibly as early as June or July.

The sale comes at a time of upheaval in British banking. The European Commission has also insisted that some of Lloyds Banking Group assets should be sold. The Government will also want to sell off its interests in Northern Rock in due course.

If Sir Richard Branson doesn’t win the current auction, he may well go for some of those others – he’s already been involved in a bid for Northern Rock when the credit crunch first hit. He’s also announced plans to open some 70 branches under the Virgin banner no matter what happens.

By the end of this year, the UK will see some new banking names on the high street. Whether consumers – both business and personal – will get a better deal is a very different question.