Terry Murden: Anti-business attitude will only harm our economy

IT HAS been a bad week for business, or at least attitudes towards business. The political elite, spurred on by the burn-the-bankers mob, is now hell-bent on punishing anyone who is rich or, worse, a rich failure.

I argued here two weeks ago that removing Fred Goodwin’s knighthood was wrong-headed and unjust as he was guilty only of reckless arrogance and poor decision-making. It may have proved calamitous, but mismanagement is not a hanging offence. Not yet.

There was an even more spurious case for Royal Bank of Scotland chief executive Stephen Hester to forfeit his bonus. He was hired to fix the bank and it will not happen overnight. He cannot be blamed for the mess he inherited or for the euro crisis (caused by reckless governments) that dragged down the bank’s shares.

Comparisons have already been made with the way in which BT, formerly state-owned, lifted itself through dreadful debt problems and expansionist mistakes to become an efficient industry leader, partly by returning to its core business.

Hester may take comfort in such an example, but he’ll now have to compete in a sector in which he could be earning considerably more and without the hostility that goes with running RBS.

Of course the public is rightly outraged by the way in which executive remuneration has accelerated way beyond the pay scales of the average worker. In particular, the bonus system has become detached from reality, creating a culture of entitlement rather than a process in which rewards are based on performance.

The problem for Stephen Hester is that these issues have become muddled so that no-one wanted to hear about how his bonus had been agreed. As far as the public and the politicians were concerned, he simply had to forego any payment because he’s already rich and everyone hates the banks. It seems to have slipped the memory of those who blame the banks for “causing the recession” that the public were also guilty of greed and excess in their willingness to build up personal debt.

Some argue that removing Goodwin’s title and forcing Hester to give up his bonus shows that Britain retains a sense of fair play and will not throw a protective blanket over the elite, whatever they do.

But in the absence of a crime, or intent to create mischief, the forfeiture committee’s decision on Goodwin amounts to a punishment for failure.

As such, it is a slap in the face for anyone who has dared to take a risk. Whatever else is said about Fred Goodwin, he built RBS into one of the biggest banks in the world that poured billions into the Exchequer and into the economy.

Sir Tom Hunter? He is feted as one of Scotland’s most successful entrepreneurs, but he’s also had his setbacks. Stagecoach boss Sir Brian Souter? He had problems in America.

The City is now concerned that international bankers are beginning to take a dim view of Britain as a place in which to do business as they regard government ministers as anti-business. It’s time to take stock of where this is leading us.

No ‘journalistic shot in the dark’

Last week I revealed that the undisclosed offer from Scottish Equity Partners for IndigoVision was 400p a share. The board declined to put the offer to shareholders. It has been stated that this figure is a “journalistic shot in the dark”. I can assure shareholders that it was no such thing.