why are we letting this happen

[swallowthree]

Barclays £1.6 bn tax dodging, Boots stashing its cash in a Swiss bank account to avoid tax, Phillip Green using his wife for tax avoidance - while services for the most vulnerable are being cut and benefits squeezed. Why are we all letting this happen ?

@Wook. Do you own shares yourself? It's the share owners who decide if & when to sell their shares in a company, not the company. Normal for this to happen when the market has strengthened and the shareholder is going to get back more than they invested.

The banks have raised capital by selling shares to the government three years ago and, as a major shareholder, the government of the time should have made that investment conditional on having a much greater say in board decisions about pay, bonuses etc. Having said that.... as shareholders, we need the banks we have a stake in now to be generating plenty of profits. We need them to be efficient, motivated, successful and for them to operate competitively in the financial markets - regulated but not unfairly handicapped. Ideally, we want their share price to rocket so that we get the best return back on our investment possible.

So is preventing the bank from making, say, huge pension payouts to its disgraced head, or rewarding the recklessness of its employees with bonuses, a regulation or a handicap?

In any company, remuneration is generally a board decision determined by industry norms (the going rate in similar companies) & the profitability or otherwise of the organisation. Directors that are reckless, unpopular or unsuccessful can be ousted by majority shareholders and fellow board members. The BP CEO was ousted last year by his board, for example, after the disaster. However, if a CEO's contract includes financial compensation for early termination (and this is normal), that has to be honoured. Similarly, if an employee's contract of employment states that they are entitled to a share of profits then that also has to be honoured. Straight employment law.

My comment about regultion without handicapping is that, much as we want the banks to be more tightly regulated and to avoid the excesses that caused problems in the past, if they are so restricted that they become unsuccessful and uncompetitive then we won't get a good return on our investment. Balancing act.

Yes Chil, I agree, a balancing act is required. I really want to see that balance achieved, since it seems to me at the moment that everything is tipping the way of the banks and big business.
I also find it incredible that no matter how much some people cock up, they still get to walk away with a pile of money. In what other walk of life does this happen?

It's going to 'tip the way of business' because the coalition philosophy (and I agree with them) is to build up private enterprise to be a bigger part of the economy, generating much-needed income and growth. The last administration preferred to inflate the public sector which, although valuable, doesn't generate cash or growth by itself and - as we see - is vulnerable when the money runs out. Another balancing act.

As for people getting golden handshakes when they leave a role, that's purely down to how the contract of employment is framed. CEO positions are lucrative but very risky and often short-lived. Football managers (another risky way to make a living) have similar clauses in their contracts for early termination.

So public sector employees neither pay tax nor buy houses, or go to the shops, or shop online, or go on holiday, or want daycare for their children, or buy cars, or pay to use any other service? Yes, I can see in that case how they would not contribute to growth in the economy, or indeed a stronger private sector, in any way......

We don't get a good return for money when banks take ridiculous risks either - that is the main reason regulation is needed. Until this happens we will all (and I mean globally) be vulnerable to the unrestricted gambling of international banks.