No fat-cat bail out

I wouldn’t begin to suggest I completely understand what is happening in the world financial markets at present. Yes, of course the broader picture is clear but I understand less about the possible consequences in the short and longer term. I don’t believe those that claim they know, really do, for certain. Add to that the many vested interests making sure their messages are heard and it is harder still to know what might happen.

But, putting aside the lack of certainty in the future, I do know what I think about how we got here and what is and isn’t acceptable. When I was building my retail business I made mistakes. Plenty as it happens over the sixteen years, more so in the early days. When I bought the wrong products or did things that didn’t work, it cost me money. I took the rough with the smooth and, fortunately for me, when I sold up a few years ago there’d been more smooth than rough.

I did, however, have to live with the consequences of my actions… good or bad. The same must apply now in the Financial Markets. Yes, that ‘industry’ is important to our UK economy but when failure is rewarded I find it entirely despicable. The massive City bonuses during the good times are fine, if somewhat excessive… that’s our market economy and it’s better than any of the alternatives.

However, when things go badly wrong those same people who took the bonuses in the ‘good’ times should face the consequences of catastrophic failure. That’s what happens in the real world to real people. Capitalism means failures and successes personally and in business.

I don’t want my tax money simply bailing out the big institutions without tough safeguards and responsibility. Lessons have to be learned by those who have been part of this financial disaster. If they just carry on as before, safe in the knowledge that a tax payers’ safety net makes them immune from any of the consequences that normal business and normal people face, that is fundamentally unacceptable to me.

So, in my view, if a big financial institution fails that is the consequences of doing business badly. Protect the public, protect the borrowers and protect the savers, but don’t expect those who took the big bonuses when the sun was shining to get off unscathed and just carry on.

It’s all part of the demise of accountability which sees big bosses who oversee huge losses or failures in the public and private sector walk off with massive golden handshakes as a reward for their failure. If public money is to be used to prop up these institutions I want see it done in a businesslike way that is tough on failure and those responsible and gives the best chance for a positive return on the money made available from UK PLC.

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