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James Max is a chartered surveyor and broadcaster


Bankers and business T


The court of public of opinion has taken over. Democracy, it would seem, is when two idiots can overrule one genius, says James Max.


he furore over Stephen Hester, chief executive of RBS, and his pay was appalling. Whilst I


understand the public anger, it’s based on insufficient knowledge of how big business works, the deal signed to save RBS and a misconception as to what is and is not taxpayers’ money. Asking a company to produce private sector performance whilst adhering to public sector politics and rewards is like asking a schoolchild to split the atom. Highly improbable. To understand the mess we are


in, one has to go back to the deal that saved RBS. In a true capitalist marketplace if a business fails, the company is put into administration. Shareholders, lenders and counterparties take a bath and assets are sold off. The problem for the government at the time was that so many small businesses, personal savers and investors would have been wiped out, the political consequences were too horrendous to contemplate. This is largely as a result of its inactivity to regulate and protect the general populous from what was becoming an increasingly risky game. Messrs Brown and Darling did nothing to dampen the exuberant spirit of individuals


Well done! Readers raising funds for charities and communities


14 l April 2012 l TheNegotiator


who borrowed beyond their means or corporates that grew too fast. The rhetoric of “no more boom and bust” gave rise to a culture that saw an economic downturn as impossible. Meanwhile some of the UK’s biggest businesses went global. In a global market the talent pool for operatives is much


billion-turnover business is very difficult to run. To perform at a high level takes a certain level of skill. Whilst some may pretend that they could do the jobs that demand these skills. In reality, top business executives are akin to pop stars that achieve truly global success, the brands that dominate internationally and


“We should embrace business and return to a reward led culture. Until then expect the rhetoric to continue.”


narrower. The pay scale is different and so are the rewards. Some argue that we don’t want that business on our shores. I’d argue that we must improve our financial understanding. If we want the UK to afford social investment programmes, benefits, infrastructure and services, we need to attract international business, inward investment and the very best talent. Global companies headquartered on our shores generating income, jobs, profits and tax are beneficial to us all. How someone can command the salaries they do? A multi


footballers at the very top of their game. Rare. Whilst our nation struggles


economically, the word “fair” has filtered into the lexicon. Setting aside that life isn’t fair, what is so fair about asking someone to pay nearly 60% of what they earn in tax? What is “fair” to ask the few to pay for others to sit on their backsides all day smoking, drinking, playing computer games and generally being unproductive whilst using heath services and other facilities at someone else’s expense? I recognise that is a tabloid picture and only applies to some on


benefits. Yet we have developed a culture that believes people are held back for reasons of circumstance, wealth and class. Nonsense. If those who wanted to do well took advantage of what’s available rather than thinking that everything is to be handed on a plate we’d be in a better place. As for those who say the gap between rich and poor is too wide, I’d agree. But we won’t solve the problem by attacking those at the top. We will do so by improving the opportunity for those at the bottom and the middle to earn more. As to what is morally acceptable? I’d say to pay the going rate and bonuses as and when a company turns in a profit and individuals attain clearly set objectives. However, instead of targeting those earning large sums, I’d far rather see more effort to simplify the tax system and eradicate sharp business practises. If profits are made from great business then perhaps we can get back to a reward led culture. The sooner the UK recognises that the way we will recover our economic fortunes is by embracing business, driving profits and growth whilst reducing costs, inactivity and waste, the better. Until then expect the rhetoric and malaise to continue.


KFH to give £10k prize to a London school


Superb artwork is flooding in to Kinleigh Folkard & Hayward for its schools’ art competition. The prize is £10,000 for playground or sports equipment. 60 schools have already signed up to take part. One of the first entries was Audrey Coates’ alpine skiing scene. Audrey


is in Year 5 at St Mary’s CofE School in Putney. Robert McLaughlin, Regional Director of Kinleigh Folkard & Hayward, says, “With Audrey’s entry, the bar has been set extremely high! It is fair to say that we are certainly very impressed with the standard of artwork.”


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