British Airways’ chief executive Willie Walsh has accepted responsibility for the fiasco at Heathrow’s Terminal 5. That’s better than washing his hands of accountability, but what does it mean? Will he resign? Will he take a pay cut? Will he sack those who were culpable while he was responsible? Or is it just a word provided by the BA public relations machine?
The failure to cope with the opening of the new terminal is management incompetence on a grand scale.
There is no need for senior heads to roll at the Financial Services Authority following its admission of inadequacies in policing Northern Rock. Apart from the futility of demanding ritual sacrifices, Hector Sants took over as chief executive only last summer after the Rock started to crumble, and chairman Sir Callum McCarthy is set to go in September anyway.
Those who have watched the Iceland phenomena with disbelief and now seeing the island pay the price of its aggressive overseas growth. Interest rates have been raised to 15 per cent when rates in its trading partners in the US and Europe are being cut.
Five times nothing is nothing - and five times next-to-nothing is still next-to-nothing. So even after a quintuple increase in its offer for Bear Stearns, US bank JP Morgan is either buying a valuable business for very little or taking a mighty risk with its own balance sheet.
The introduction of the minimum wage in 1999 did not lead to 1.7m job losses as business warned, but that is no excuse for increasing the safety net from a token level to a comfortable pay rate. There must still be the semblance of a free market in labour and there must still be scope for those on the minimum wage to earn their way off it.
If bankers’ pay is hard to defend in a rising market it becomes illogical when markets have crunched. Now banks are reporting huge write downs, how come the very bankers responsible for the losses are still receiving large bonuses? It cannot be supply and demand: City jobs are being shed, not least as banks try to cut their cost base to meet bonus payments.
HSBC paid $14bn to buy Household, a US sub-prime lender, in 2003. It has this year written off $17bn because of its exposure to that sector. Perhaps the surprise is that Britain’s biggest bank took five years to discover that sub-prime means exactly what it says on the wrapper.
The Office of Fair Trading has lost no time following HMRC’s example of bribing a foreign bank employee to dish details of Brits with Liechtenstein bank accounts: the competition regulator is offering up to £100,000 to UK employees who accuse their own companies of price-fixing.
This is what industrial espionage looks like when given the state’s seal of approval.
