(and women of course) This evening I went to a meeting of the Pension Investment Panel of my “Local Government Pension Scheme” (LGPS). I attend as a UNISON member nominated representative (MNR) alongside a GMB trade union rep. At tonight’s meeting there was also the independent Chair, two Senior Council finance managers, two Labour Councillors and the pension fund investment advisor.
Our pension scheme is relatively small but still has over £618 millions of assets (31.12.08).
The main business of the panel was to hear a presentation by two of our fund managers about their recent performance and future expectations. I have served on this panel for about 14 years. As you can imagine such presentations are usually serious affairs but nowadays they are pretty fraught. Everyone is conscious that we live in “difficult times”.
After these presentations I asked each of the fund managers roughly the same question.
That we own shares in Banks and other financial institutions and that shareholders at AGM’s directly elect the directors of our financial institutions and agree the remuneration policies for executives. In view of the fact that it is widely accepted that these same directors and remuneration policies contributed to the present financial crisis who is really to blame for allowing this to happen and what is being done to stop such things occurring again?
I won’t post on their replies since there is an ongoing debate over whether such meetings are “restricted” or not. However, their replies were honest and well argued even if I did not agree with them.
My own view is that all of us “on watch” were to blame for striking this modern day economic ice berg - to a greater or less extent. Pension and insurance funds did not scrutinise and sufficiently challenge AGM decisions. We allowed Executives to be appointed who did not understand their business risks; we allowed others to be rewarded for short term performance regardless of staggering long term risk. The financial services industry, the regulators and various governments (national and international) also failed to do their bit.
Intellectually we allowed ourselves to be brow beaten into accepting the neo-liberal market model “warts and all”. However, power and influence was not fairly distributed in financial governance. Necessary checks and balances were also missing.
At the moment everyone is naturally focused on “fire fighting” the recession and the real risk of a depression. I believe that we will come out it (eventually) and then we must and shall make change.
9 comments:
All of us were to blame for this crisis? Well I think the Labour Government have dug a huge hole for us ...government Total Managed Expenditure in 1993-94 that figure stood at £283 billion; today it is £623 billion. If it had risen in line with inflation over the past 15 years, the Government would now be spending £404 billion. The gap is £219 billion. That's £219 billion a year. I repeat, Gordon Brown has £219 billion more to spend this year than he would have if he had allowed public spending to grow only in line with inflation! Now you see the scale of the problem Labour have created.
have underestimated? The Treasury is so worried about plugging the gaps that it has delayed the Budget from early March to April 22 – which will make it one of the latest in history.Meanwhile, Gordon Brown still bangs on about the iniquities of potential Tory cuts and appears psychologically incapable of confronting the nation's true situation. That would entail admitting that the country overspent and needs to change its habits dramatically if it wants to see prosperity again. But even at five minutes to midnight, the juggernaut of state extravagance keeps on rolling. It is, we are told, stimulating the economy when it is doing no such thing: it is using up valuable resources inefficiently.We learned last week that a 13-year-old boy fathered a daughter with a 15-year-old mother; it then emerged that the various members of the family account for £30,000 of benefits a year, and no one involved works. Six average taxpayers get up every morning and go to work so that such families don't have to. Why?
I suppose you would rather that the family were out begging on the streets, Anonymous? Unplanned underage pregnancies also happen in the families of people who are employed - what is your point?
We might also ask: why wealthy donors to the Tories dodge paying tax and don't create jobs in this country by investing here. Our tax gap wouldn't be so wide if these people recognised they must contribute like the rest of us.
No I would rather they were properly educated and out working.
Charlie..if you havn't got a Rolex by the time you are forty you are a failure.
I got a fauxlex before I was 30, does that count?
Yes...it counts as failure mate.
Hi Anon 20.32
National expenditure should ideally rise in terms of increases in national income not inflation since usually income rises ahead of inflation.
Britain in the recent past has one of the lowest public debt compared to GDP so thanks to Gordon we are well placed to increase spending in order to save off a depression. Unlike “do nothing” Cameron and “Recession is good” Tories.
I had a 2CV when I was 25 and my first Skoda when I was 30 - so does that count?
Its a failure and it marks you as a person of poor taste too!
Hi Anon
How can be a proud Skoda owner be a failure and in "bad taste". They have been so reliable and cheap to maintain! I want a car that works first time every time regardless of weather. Clarkson would be proud of me if only he really knew.
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