People really do look to him like some Moses figure who is going to lead them away from this economic mess to the promised land.
Sunday 30 November 2008
See that there economy thingummyjiggerybobcat?
Legal challenge to Mandelson decision
The Merger Action Group has launched a legal challenge to Mandelson's decision to railroad through the Lloyds TSB takeover of HBoS.
Sign up and support them I say!
Friday 28 November 2008
You can always rely on George
3. George Foulkes (Lothians) (Lab): To ask the Scottish Executive what plans the Minister for Europe, External Affairs and Culture has to visit the headquarters of the Department for International Development in East Kilbride. (S3O-4977)
The Minister for Europe, External Affairs and Culture (Linda Fabiani): I have no plans to visit the headquarters of the Department for International Development in East Kilbride in the near future.
George Foulkes: I am absolutely astonished by that answer. The minister says that she has no plans to visit the headquarters, yet a few weeks ago she said that her international development plans were going to be closely integrated with the Department for International Development's work. Forty per cent of the DFID staff are at East Kilbride, including the civil society unit, which spends hundreds of millions of pounds in Malawi and elsewhere. When I was a minister there, I hosted a meeting with the President of Malawi.
The Presiding Officer: The member should ask a question, please.
George Foulkes: Would not the minister's rhetoric about integrating with the Department for International Development's programme and making her work complementary be more acceptable, and more like the reality, if she took the trouble to go to East Kilbride—it is not far away—to talk to the people who know what they are doing in international development, unlike her?
Linda Fabiani: I visited DFID's Scottish headquarters on Friday 7 November—three weeks ago. There are currently no plans to undertake another visit but, as always, we will continue to liaise with DFID.
Thursday 27 November 2008
Baccalaureates Launched
Another election promise delivered!
Suffer the Children
28 MSPs voted against the motion - voted to keep food out of the mouths of small people. The Lib Dems were whipped to vote against free school meals!
Wednesday 26 November 2008
Dram right!
Must be a result of my excellent reasoning, eh?
No control
I woudn't expect Ministers to read every word of every document that comes out from their departments, but surely they think that the proposed change to VAT is a wee bit important?
Tuesday 25 November 2008
Och, that pre-budgetary stuff is all nonsense
• cigarettes: 24 per cent of the retail price plus £112.07 per thousand cigarettes;
• hand-rolling tobacco: £122.01 per kilogram;
• cigars: £169.74 per kilogram;
• other smoking tobacco and chewing tobacco: £74.63 per kilogram.
the Government will change the class 3 voluntary national insurance contribution rules to allow those reaching state pension age between April 2008 and April 2015 with 20 qualifying national insurance years to purchase up to six additional years from 1975-76. The package is intended to be cost neutral overall and the class 3 rate will therefore rise accordingly to £12.05 a week in April 2009.
reforming air passenger duty from 1 November 2009, moving from two to four distance bands to improve environmental signals. The Government has decided not to proceed with a per-plane tax in order to ensure greater stability and protect competitiveness at a time of economic uncertainty.
Monday 24 November 2008
Pushmi-Pullyu Murphy
Friday 21 November 2008
When politicians fail
It's possible to forgive much of that if it's an unusual occurrence, we can all appreciate human frailty and can forgive both the error of the politician on one side and the rush to judgement of the politician on the other. Where a mistake has been honestly made and efforts are made to put it right, forgiveness is easy.
There are situations in which politicians should not be forgiven, though. When a politician in a position of power makes a mistake, a mistake which is clear, and fails to take steps to put right that error their actions should not be excused, especially when they have a chance to rectify the situation before the full effects make a full impact.
Today Gordon Brown and Alistair Darling are in the dock, accused of hasty action over HBoS, encouraging a takeover which breached the letter, the word, the sentence and the paragraph of competition rules as well as the spirit of the rules. They further stand accused of failure to take action to remedy the situation when it became crystal clear that the takeover - bad for HBoS, bad for customers, bad for competitors, bad for jobs, and bad for the economy - was unnecessary and that the bank was in no worse a position than any other bank in the UK and in a better position than some.
Darling and Brown are, I say, guilty of breaking the first rule of good governance - always strive to do your best.
George Mathewson and Peter Burt released a statement today on the campaign website. I've reprinted it below.
Sir Peter Burt and Sir George Mathewson noted the Chancellor’s 18th November statement to Parliament on the recapitalization and funding terms on which the Government now is prepared to offer any bank, which sought assistance or sought to change the terms agreed in October. The Government’s statement has raised several hurdles very high and has made it crystal clear that they do not want and are not prepared to facilitate HBOS remaining independent. Accordingly Sir Peter and Sir George reluctantly decided to discontinue their campaign.
Notwithstanding this announcement Sir Peter and Sir George feel that the recapitalization scheme announced by the Government on 8th October was an excellent response to a deepening crisis.
Sir Peter and Sir George’s contention was that the Board of HBOS failed to explore the alternatives available to HBOS adequately at the time of the recapitalization scheme’s creation. The HBOS Board apparently failed to either argue for a better exchange ratio for HBOS shareholders from Lloyds or, at least to hold Lloyds to the
original terms of the deal. Prior to the Chancellor’s announcement we believed we could assist in this process.The HBOS Board’s apparent apathy was further masked by the lack of transparency in the HBOS shareholder circular regarding the cost of keeping HBOS independent. Why hadn’t the Board of HBOS firmly established, as Lloyds have done, both the actual amount of the capital required by the FSA and the terms on which the Government were prepared to offer that capital? We still do not know. We can only surmise that either they did not ask or that it was the HBOS Board that failed to meet the hurdles for the funding set by Government at that time. At that point senior management changes at HBOS should have been made voluntarily.
What is particularly unfortunate is that there was an encouraging and increasing level of support, not least in financial terms. Although there was no prospect of raising all of the £11.5bn, which will be required to strengthen the new Lloyds Bank, from private sources we had offers of additional capital that would have raised more than the extra £500m needed to keep HBOS independent. Ironically the HBOS’ spokesman’s criticism that our proposal offered no additional money overlooked that fact that Lloyds themselves are providing no money at all and indeed will be in receipt of assistance at a level which is a relatively higher percentage of their capital base than
the £11.5bn is of HBOS’ capital.However the rules have now been firmly established and Sir Peter and Sir George regret that an opportunity to keep HBOS independent, albeit with the Government as the (temporary) major shareholder, has been lost along with thousands of jobs, unnecessarily as the UK economy struggles with recession. The anticompetitive
nature of this takeover will be borne by the community at large.Nevertheless we think that Lloyds seized a great opportunity and our congratulations go to Sir Victor Blank and his colleagues for having done so. It may well be ‘the deal of the Century!’ We sincerely wish them and all the staff at Lloyds Bank the best of luck.
Finally Sir Peter and Sir George would like to thank all those who wrote, emailed or
called with messages of support and encouragement and with offers of financial help.
Thursday 20 November 2008
godtramit!
Wednesday 19 November 2008
Free School Meals result
Free School Meals
She has been quoted as saying
“It is possible that the SNP will lose tomorrow and suffer a major defeat on what it sees as a flagship policy”
Food for children or score a political point... Food for children or score a political point... You can see how it's a difficult decision, can't you?
The Labour MSPs has, apparently, started backing off as they realise what the political implications are of siding with the Conservatives to remove food from the mouths of children, but some within their group are still pressing for a 'no' vote in an attempt to try to beat the SNP on a vote - nothing to do with whether the policy is right or wrong, just try to win something.
Oh, how I wish Kezia's blog was still available with that lovely line of "Maggie Thatcher stole my milk" emblazoned across it (not true, of course, if I'm correct in assuming that Kezia went to school in Scotland - Thatcher was Education Minister for England at the time of the alleged offence).
Margaret Smith of the Lib Dems is, I am told, warbling on about bringing in a means-test and is still thinking about whether to vote against to win a political point.
Last time these three managed to gang up properly it was, of course, to push through a vanity project - a white elephant known as the Edinburgh Tram (singular) at a cost of half a billion quid and rising (but not for long).
Meanwhile, MSPs have received a letter encouraging a yes vote from organisations who full y support the steps - Douglas Hamilton at Save the Children, Ewan Aitken at the Church of Scotland, Dave Watson at Unison, Greg Dempster at the Association of Headteachers and Deputes Scotland, Agnes Tolmie of the Scottish Women's Convention, Peter Kelly of the Poverty Alliance, Marion Davies of One Parent Families Scotland, John Mulvey of the Scottish Local Government Forum Against Poverty, and John Dickie of the Child Poverty Action Group in Scotland. You may recognise these names from other public roles.
This is going to be interesting.
Tuesday 18 November 2008
Did you hear that?
Guess what?
Now the answers
Here's the answers - just the question and the answer that is given as correct in the study material for the citizenship test (which you now need to take for indefinite leave to remain). My comments are italicised (because I'm like that).
What percentage of the workforce are women?
B 45%
No, I didn't know either.
What proportion of young people who became first-time voters in the 2001 general election actually used their vote?
C One in five
They are, of course, only first time voters if they actually vote ...
What percentage of Christians in the UK are Roman Catholic?
A 10%
A most useful piece of information that one, oh yes.
When is New Year celebrated in the United Kingdom?
A 1 January
Well, actually, most of us celebrate round about midnight between the 31st of December and the 1st of January. Some people celebrate it from slightly earlier than that until slightly later than that. As Sean McLeod pointed out in the comments to the original post, Old New Year is still celebrated (middle of January, I think - 13th?). There's also the point that Scots celebrations traditionally took in January 2nd - a tradition which appears to be falling by the wayside.
When are local government elections held?
C May each year
Only in England (and it should be May most years, so I'm told) - in Scotland there is not another local election due until 2012, and I don't know about Wales, but there were elections in all councils in Wales this year, so I'm assuming that the Welsh system is similar to ours (is it?)
Where can you get a mortgage from?
Select two correct answers from below
A A bank
B A building society
Well, how can I put this ...
On average, boys leave school with better qualifications than girls.
Is this statement true or false?
B False
This is a truly vital piece of information you'll need as a new member of our society, it will greatly enhance your small talk at your local cocktail parties.
When is the national day for Northern Ireland?
B 17 March
Northern Ireland is a nation?
If you are buying a home in Scotland who should you approach first?
A A bank
B A solicitor
C An estate agent
D Your local MP
I've left all the answers in here. The book's answer is B - personally, I'd avoid solicitors like the lumpy plague until it's unavoidable (which reminds me - I must respond to the solicitor who emailed me a couple of weeks ago). What's wrong with seeing your bank first?
What types of discrimination can the Equal Opportunities Commission help with?
D Sex discrimination
As Sean McLeod pointed out, though, the EOC doesn't exist anymore. The Equality and Human Rights Commission covers all of the areas in the possible answers.
Why was there a fall in the number of people migrating to the UK from the West Indies, India, Pakistan and Bangladesh in the late 1960s and early 1970s?
C New laws were introduced restricting immigration to Britain
Is the subtext "so be grateful that you're getting in"?
Which voting system is used to elect the Scottish Parliament and the Welsh Assembly?
D Proportional representation
Well, some people may take issue with that definition - it's certainly better at proportionality than FPTP but it's not a pure proportional system. It does have a name though, it's called the Additional Member System.
At what ages are the Key Stage Tests held in England?
D 7, 11 and 14
There you go, now you know.
If you have a problem with your neighbours, who can you go to in order to solve the problem without taking the case to court?
B Mediator
Police, councillor, Environmental Health Department (depends on the problem, right enough).
What is the name of the ministerial position that is responsible for legal affairs?
D Lord Chancellor
Surely they mean the running of the judiciary in England? Home Secretary was one of the other answers - an equally possible construal of the question. As Sean says, though, could be Kenny MacAskill (or Eilish Angiolini).
When did married women gain the right to retain ownership of their own money and property?
D 1882
Exactly what relevance does this have to someone who wants to come and live here? Is it a not-so-subtle dig at people who might be coming from 'backward' cultures? We were, after all, only following the Islamic tradition.
What percentage of children live within a stepfamily?
A 10%
Again - what relevance has this for immigration?
Hereditary peers have lost the right to attend the House of Lords.
Is this statement true or false?
A True
No it's not. 92 hereditary peers still have the right to attend the House of Lords.
What is the title of the King or Queen within the Church of England?
D Supreme Governor
Do you really need to know that if you're not a member of the CoE? I was quite happy not knowing that. No doubt I'll be happy again, but I was fine not knowing.
When might you need a CRB check?
B When applying for work that involves children or vulnerable people
Except in Scotland - SCRO Disclosure check here. (CRB is the Criminal Records Bureau - like a writing desk with Val Doonican LPs on it - and SCRO is the Scottish Criminal Record Office)
At what age do school children take their first national test in Wales?
D 14
Much as I love the Welsh and I greatly appreciated all the help they gave us when they came up in their hordes to help us in Glasgow East and Glenrothes (I thought they should use the train, but hordes did fine), I have no desire to know when they take school tests - and I have no idea why anyone wanting to settle anywhere else might want to know - and if you were settling in Wales someone would tell you - probably the teacher.
What is the distance from John O'Groats on the north coast of Scotland to Land's End in the south-west corner of England?
D Approximately 870 miles (1,400 kilometres)
Doesn't look that far on the map.
What is the name of the established church in Scotland?
D The Presbyterian Church
Eh? Which Presbyterian church? I was under the impression that the Church of Scotland was the established church in Scotland. Sean McLeod says it's a recognised church rather than an established church (it's the big spire, you can recognise it for miles around) but I don't know what a recognised church is. Again, though, what relevance does this have for an immigrant?
When will the British government adopt the euro as the UK's currency?
D When the British people vote for it in a referendum
The phrase 'howls of derision' comes to mind.
There are more men in study at university than women.
Is this statement true or false?
B False
Who cares? (other than those studying, their relatives, potential employers, workforce planners, government statisticians, and Eric from the paper shop on the corner of my street) and what relevance does it have to immigrants?
How many member states are there in the Commonwealth?
C 53 member states
A subtle hint to go settle elsewhere? "Look, 53 other countries, most with better weather than us. You'd be happier there, wouldn't you?"
What is the purpose of the Council of Europe?
D To develop conventions which focus on human rights, democracy, education, the environment, health and culture.
A fine institution.
The final point I want to make - the National Anthem is not 29 words long, listen.
Is the HBoS deal illegal?
As a director, you have several duties:
...
To act in good faith to promote the success of the company for the benefit of its members. You must also have take into consideration employees, suppliers, customers, the environment and the community.
To carry out your duties with reasonable care and skill. Higher standards may be expected from executive directors who are responsible for an area in which they have a specialist or professional qualification.
...
To make sure that there is no conflict of interest and duty.
...
Not to benefit from a third party by reason of your being a director, or by doing or not doing something.
Not to act with intent to defraud creditors or for any other fraudulent purpose.
...
To carry out the statutory obligations imposed by the Companies Act 2006 and other legislation.
A director’s general duties to the company are, for the first time, set out in the Companies Act 2006 but the relevant provisions are being commenced in two stages. Most of Chapter 2 of Part 10 of the 2006 Act (General duties of directors) was commenced with effect from 1 October 2007, but the sections relating to the duties to avoid conflicts of interest, not to accept benefits from third parties, and to declare an interest in a proposed transaction or arrangement with the company (and related provisions) will be commenced with effect from 1 October 2008. The general duties of directors were previously contained in case law. See the Department of Business, Enterprise & Regulatory Reform website www.berr.gov.uk for further details.
A director (including a former director) must "avoid a situation in which he has a direct or indirect interest that conflicts or may conflict with the interest of the company". Directors are currently under a similar common law duty and can avoid liability for breach by obtaining the members' consent.
An Act to reform company law and restate the greater part of the enactments relating to companies; to make other provision relating to companies and other ...
175 Duty to avoid conflicts of interest
(1) A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
176 Duty not to accept benefits from third parties
(1) A director of a company must not accept a benefit from a third party conferred by reason of—
(a) his being a director, or
(b) his doing (or not doing) anything as director.
178 Civil consequences of breach of general duties
(1) The consequences of breach (or threatened breach) of sections 171 to 177 are the same as would apply if the corresponding common law rule or equitable principle applied.
(2) The duties in those sections (with the exception of section 174 (duty to exercise reasonable care, skill and diligence)) are, accordingly, enforceable in the same way as any other fiduciary duty owed to a company by its directors.
If you think our politics is dirty ...
It was a hoax. Excuse the overblown language of the chap - he's obviously a wee bit upset...
I am amazed
http://www.google.co.uk/search?q=heisingers%20principle&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-GB:official&client=firefox-a
How people know what other people search for on Google beats me, but I bet I wasn't half as surprised as the person who googled it (whom I assume is just starting out on a study of physics) and who reached this post:
http://calumcashley.blogspot.com/2008/02/wendy-alexander-is-schrdingers-cat.html
I almost feel guilty.
Almost.
Monday 17 November 2008
A quiz!
What percentage of the workforce are women?
A 40%
B 45%
C 51%
D 65%
What proportion of young people who became first-time voters in the 2001 general election actually used their vote?
A One in two
B One in three
C One in five
D One in six
Note: the actual answer is 100%, but we know what they mean, don't we?
What percentage of Christians in the UK are Roman Catholic?
A 10%
B 20%
C 30%
D 40%
When is New Year celebrated in the United Kingdom?
A 1 January
B 1 March
C 25 December
D 31 December
When are local government elections held?
A April every two years
B June and December each year
C May each year
D September each year
Where can you get a mortgage from?
Select two correct answers from below
A A bank
B A building society
C An estate agent
D A housing association
On average, boys leave school with better qualifications than girls.
Is this statement true or false?
A True
B False
When is the national day for Northern Ireland?
A 1 March
B 17 March
C 23 April
D 30 November
If you are buying a home in Scotland who should you approach first?
A A bank
B A solicitor
C An estate agent
D Your local MP
What types of discrimination can the Equal Opportunities Commission help with?
A Discrimination related to disability
B Racial discrimination
C Religious discrimination
D Sex discrimination
Why was there a fall in the number of people migrating to the UK from the West Indies, India, Pakistan and Bangladesh in the late 1960s and early 1970s?
A A weak British currency made immigration less appealing
B It was becoming more difficult for immigrants to find employment in the UK
C New laws were introduced restricting immigration to Britain
D These countries were experiencing labour shortages
Which voting system is used to elect the Scottish Parliament and the Welsh Assembly?
A A ranking or preferential system
B Assembly members are chosen by the government
C 'First past the post'
D Proportional representation
At what ages are the Key Stage Tests held in England?
A 10, 12 and 14
B 11, 15 and 17
C 7 and 15
D 7, 11 and 14
If you have a problem with your neighbours, who can you go to in order to solve the problem without taking the case to court?
A Lawyer
B Mediator
C Justice of the Peace
D Magistrate
What is the name of the ministerial position that is responsible for legal affairs?
A Chancellor of the Exchequer
B Foreign Secretary
C Home Secretary
D Lord Chancellor
When did married women gain the right to retain ownership of their own money and property?
A 1752
B 1792
C 1810
D 1882
What percentage of children live within a stepfamily?
A 10%
B 25%
C 40%
D 55%
Hereditary peers have lost the right to attend the House of Lords. Is this statement true or false?
A True
B False
What is the title of the King or Queen within the Church of England?
A Archbishop of Canterbury
B Governor General
C Head Priest
D Supreme Governor
When might you need a CRB check?
A When applying for welfare benefits
B When applying for work that involves children or vulnerable people
C When buying a house
D When requesting medical treatment from the NHS
At what age do school children take their first national test in Wales?
A 7
B 9
C 11
D 14
What is the distance from John O'Groats on the north coast of Scotland to Land's End in the south-west corner of England?
A Approximately 1,100 miles (1,770 kilometres)
B Approximately 1,310 miles (2,110 kilometres)
C Approximately 500 miles (800 kilometres)
D Approximately 870 miles (1,400 kilometres)
What is the name of the established church in Scotland?
A The Anglican Church
B The Church of England
C The Episcopal Church
D The Presbyterian Church
When will the British government adopt the euro as the UK's currency?
A 2010
B 2015
C Never
D When the British people vote for it in a referendum
There are more men in study at university than women.
Is this statement true or false?
A True
B False
How many member states are there in the Commonwealth?
A 25 member states
B 39 member states
C 53 member states
D 75 member states
What is the purpose of the Council of Europe?
A To create a single market for members of the council
B To create new European regulations and directives
C To debate proposals, decisions and expenditure of the European Commission
D To develop conventions which focus on human rights, democracy, education, the environment, health and culture.
There you are - 27 questions. For the real quiz there are 24 selected from the database of about 400 (random selection by a computer - the quiz is completed on a computer as well). You get 45 minutes in which to get at least 18 correct answers. If you pass, you get to go onto the next stage where you swear the oath of allegiance:
I (name) swear by Almighty God that on becoming a British citizen, I will be faithful and bear true allegiance to Her Majesty Queen Elizabeth the Second, her Heirs and Successors, according to law.(You can affirm instead), and then you make the citizenship pledge:
I will give my loyalty to the United Kingdom and respect its rights and freedoms. I will uphold its democratic values. I will observe its laws faithfully and fulfil my duties and obligations as a British citizen.Then you have to sing the national anthem. As the book says:
all British citizens should know the words. It is very short - only 29 words long.So there you have it - officially - that's what makes you British, knowing this kind of "fact" and swearing those oaths.
Doesn't it make you proud?
Friends of the Beachcomber will be delighted to know that the Doc passed.
Sunday 16 November 2008
Lazy journalism?
His recent blogpost on HBoS illustrates rather well my complaint. He repeats some of the text from the HBoS circular, the rather bizarre warning of nationalisation if the deal doesn't go through (funny how no-one is asking how that differs from the position about to be entered into with Lloyds TSB) acting like a reporter rather than a journalist, then he speculates rather idly about Mathewson and Burt and their campaign to save the bank.
Peston appears more willing to indulge in tittle-tattle, apparent leaks from the Treasury, and the repetition of rumour than in serious journalism. Why, for example, no examination of the Hornby deal with Lloyds TSB (£60,000 a month consultancy if the deal goes through); or the strange clauses in the implementation agreement; Blank's long-term predation on HBoS; the strange behaviour of the Treasury (which is even stranger considering the opinions of the Chief Executive of the FSA and of the OFT)?
It's not exactly Woodward and Bernstein territory that's needed, nothing earth-shaking, just a decent attempt at journalism would do.
Did she miss a memo?
Pauline McNeill (Glasgow Kelvin) (Lab): On a point of order, Presiding Officer. The member cannot continue to misname the Scottish Labour Party as new Labour. Surely we are entitled to our proper title in this chamber.
Don't bank on it!
Couple of things I noticed - it talks about the hard times in the global market and insists that
As a result of these factors, HBOS sought to restore confidence and stability through negotiating the proposed transaction with Lloyds TSB, as announced on 18 September 2008.
That's not what Victor Blank said - he said they'd been at it for years.
The circular also says:
While it is possible that the Proposed Government Funding might be available in the event that the Acquisition does not complete there can be no certainty that this will be the case or as to the terms on which it might be available.
Even Darling's given up on this rotten chestnut and admitted that any qualifying bank can apply.
Then there's this bit:
the boards of HBOS and Lloyds TSB announced that they intended to participate in the Proposed Government Funding by committing to raise £11.5 billion of new capital to be raised by HBOS (consisting of £8.5 billion in ordinary shares and £3 billion in preference shares (before costs and expenses)) and £5.5 billion of new capital to be raised by Lloyds TSB
Lloyds TSB (the smaller bank) requires £7 bn if the deal doesn't go through - 27% higher than its needs if the deal goes through.
On 11 October 2008 the FSA gave a preliminary indication to HBOS that if the Acquisition were not to occur, it would require HBOS to raise £12 billion of additional capital
An increase of £0.5 bn, or 4% higher. HBoS, of course, has a larger asset base than L-TSB.
HBoS is a healthier bank than Lloyds TSB - even with its current problems. Don't take my word for it:
However, despite higher funding costs, net interest income from banking businesses has increased and HBOS’s Insurance & Investment business has made a good contribution.
Good news from HBoS against:
The Lloyds TSB Group continues to trade well and deliver good income growth from its relationship businesses in an immensely challenging period for financial services companies. However, the impact of market dislocation, insurance related volatility and higher impairments, particularly in Lloyds TSB’s corporate lending portfolios, has led to a substantial reduction in statutory profit before tax in the first nine months of the year.
In other words, parts of L-TSB are losing money while the profitable bits are struggling to stay so. If the takeover goes through Lloyds TSB will be a drag on HBoS.
There's also this wee snippet:
If for any reason the Scheme does not become effective, the share capital reorganisation described above will be reversed and HBOS Shareholders will retain their current holdings of HBOS Shares and any Open Offer Shares which they have taken up. In such circumstances, HBOS has covenanted to HM Treasury to apply to
the UK Listing Authority for the Open Offer Shares and the HMT Preference Shares to be listed on the Official List and to the London Stock Exchange for the Open Offer Shares and the HMT Preference Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities.
Good to see they're already prepared for the collapse of the deal and there will be some movement immediately after the collapse.
Anyone who, like me, wondered why HBoS directors were busy fending off alternative offers instead of seeking the best possible deal can find the answer in the Implementation Agreement:
Under the terms of the Implementation Agreement, HBOS has agreed to certain
non-solicitation commitments in favour of Lloyds TSB, including that HBOS shall not, directly or indirectly, solicit, encourage or otherwise seek to procure any competing offer for HBOS or enter into any inducement or break fee arrangement of any nature with any other party. Additionally, HBOS has agreed to pay Lloyds TSB an inducement fee (inclusive of value added tax, if any) of one per cent. of the offer value under the Acquisition (based on the Closing Price of a Lloyds TSB Share on the Business Day prior to the date of the occurrence of the relevant event set out below) if:
* the HBOS Directors do not unanimously and without qualification recommend the HBOS Shareholders to vote in favour of the Scheme and the resolutions to be passed at the HBOS General Meeting necessary to implement the Scheme or they (or any committee of the HBOS Directors) withdraw, or adversely modify, or qualify their
recommendation to HBOS Shareholders to vote in favour of the Scheme and/or the resolutions necessary to implement the Scheme at or prior to the HBOS General Meeting and the Court Meeting;
* at any time after approval of the Scheme by HBOS Shareholders at the Court Meeting but before the grant of the Court Orders, the HBOS Directors, in exercise of their fiduciary duties, decide not to proceed with the Scheme;* without the consent of Lloyds TSB, HBOS withdraws the Scheme or takes steps to defer (or adjourn) the holding of the Court Meeting or the HBOS General Meeting or the Court Hearings to approve the Scheme to a date later than 28 February 2009; or
* a competing proposal is announced prior to the Scheme lapsing or being withdrawn, which competing proposal subsequently becomes or is declared wholly unconditional or is completed.
Yup, HBoS directors agreed with Lloyds TSB that they wouldn't fight for the best deal for their shareholders, staff, and customers. Meanwhile, Hornby makes sure he's OK with his deal to net him £60,000 a month if the deal goes through.
Saturday 15 November 2008
Friday 14 November 2008
Let's have a look at what we've learned
So let's look at the evidence so far:
HBoS Chief Executive Andy Hornby is in line for a £60,000 a month (£720,000 a year - not bad kelly if you can get it) consultancy with Lloyds TSB if the merger goes through.
The merger could result in 60,000 job losses (although the Unite trade union seemed happy enough with the deal!) Jobs in the banking sector tend to have a higher salary than the average salary, so the impact on Edinburgh's economy, and therefore Scotland's economy, could be pretty painful.
A former director of Lloyds TSB is being moved in to run the company that Gordon Brown's Government has set up to administer the public stake in the banks.
There will be no place for the Scottish bankers in the new bank if the deal goes ahead.
Gordon Brown is insistent that the deal goes ahead.
There has been plenty of other interest in HBoS.
Concerns that HBoS directors were not acting properly has already been expressed.
That would be those directors who have admitted they were running this financial institution more like a stall in a flea market.
Many commentators are now calling for HBoS directors to go.
The Economist magazine has said the deal should be called off.
As has the Financial Times.
Lloyds TSB reckons it can make £1.5 billion in synergies.
HBoS is selling its Australian assets - giving the bank an immediate funding benefit of £8 billion, reducing its dependence on the Government bail-out. The deal was done in early October (subject to regulator approval) - with the backing of Lloyds TSB at a time when L-TSB valued HBoS at only £12.2 bn in total. That offer has subsequently been reviewed, of course, and with L-TSB's share price falling to around half of what it was at the time and the offer being amended to three quarters or so of the original offer, L-TSB is now valuing HBoS at around £4.5 bn.
We've had some of the best-known banking names in Scotland weighing in to say the Lloyds TSB deal is mince.
We've had the Chief Executive of the Financial Services Authority saying that there is no need for this deal to go through - that HBoS can continue to stand on its own.
We've had the OFT saying that the merger would be damaging.
There are indications that L-TSB is in this deal to strip the assets.
We know that L-TSB is already ignoring the requirement from the Treasury to forego bonus payments.
We know that Victor Blank and his troops at L-TSB were eyeing up HBoS two years ago:
Blank insists the two sides first talked two years ago but threw in the towel because competition issues would almost certainly have blocked the ambitious deal
All he needed, of course, was the permission of his mates:
Blank's political tentacles extend not just to Gordon and Sarah Brown, whom he calls his friends, but to Alastair Campbell and Tony Blair, and also to Sir John Major, the former Conservative prime minister whose friendship caused some controversy in Labour ranks when Blank was chairman of the publisher Trinity Mirror.
This wasn't the first time that Brown's Government gave preferential treatment to Blank's bank, though. L-TSB got first dabs on the Northern Rock mortgages held by that bank - after it had been nationalised.
When the deal was first mooted, L-TSB was seeking to smooth the path by promising to keep jobs in Scotland - not what Gordon Brown was saying to workers in Halifax, right enough.
There was also speculation that the 'leak' of the news of the merger which forced the pace was because other institutions were about to lend support which would have scuppered the need to waive the regulations on takeovers.
We know that the Government bail-out amounts to the equivalent of 2.5% of HBoS assets and 2.4% of L-TSB assets but that the amounts are massively different if we look at Tier 1 assets where L-TSB comes in as needing around a 60% bail-out while HBoS is down about 50%. That's for the 13th October Government announcement.
We know that HBoS raised another £2.4 bn in private money through a 2-year bond issue on the 29th of October - the same day that Darling said that the FSA could re-assess the deal if the merger didn't go ahead.
The truth, my dear, is out there - and it was published by Lloyds TSB in its circular to shareholders on the 3rd of November when it admitted that if the merger didn't go ahead L-TSB would be left £7 bn short of what it needs to keep going - even with the money it has already secured from the Government:
If the Acquisition and Placing and Open Offer do not complete, HM Treasury has stated that it would expect Lloyds TSB to take appropriate action to strengthen its capital position. The FSA has advised Lloyds TSB that if the Acquisition were not to occur, it would require Lloyds TSB to raise £7 billion of additional capital, made up of £5 billion of Core Tier 1 equity and £2 billion of Tier 1 instruments. Whilst Lloyds TSB would be able to seek to raise such additional new capital in the public markets, there can be no certainty that Lloyds TSB would be able to successfully raise such capital or as to the terms on which such capital could be raised, including the terms of
any participation by HM Treasury in any such capital raising, or as to whether any such fundraising would be on a pre-emptive basis.
There you have it - the truth is that it is Lloyds TSB which is bust according to the Financial Services Authority and that HBoS is 'bullet-proof' according to the Chief Executive of that body.
Don't let them grind you down, but do take a wee look at this website.
Toodle-pip!
Thursday 13 November 2008
The HBoS aria
I was under the impression that the Chief Executive of a company would be under some kind of obligation to get the very best deal possible for the customers and shareholders of that company and would be eager to avoid any conflict of interests or appearance of a conflict of interests.
I was surprised, therefore, on leafing through Banking Times to find out that Andy Hornby, our dear old friend from HBoS headquarters, is on a £60,000 a month sweetener from Lloyds TSB if the deal goes through. How, exactly, does he square that with a requirement to fight for the very best deal for HBoS interested parties?
The HBoS board has refused to countenance any deal other than the Lloyds TSB one, with board members saying that there is no other deal on the table. Methinks they do protest too much.
Wednesday 12 November 2008
HBoS perfidy in the Treasury
Time the Treasury started getting honest and letting us know exactly what is going on.
It's time we all started asking some serious questions.
Cracking value
Chopper Park asked how much National conversation events cost and how many people turned up, here you go:
4 February
First Minister launches Scotland in the World Forum at Aberdeen University
Costs met by organiser
100 people
13 February
First Minister National Conversation speech at Trinity College, Dublin
Costs met by organiser
100 people
12 March
SCVO National Conversation event in Edinburgh
*
45 people
26 March
First Minister launches National Conversation Civic engagement programme at Edinburgh University
£8,400
110 people
1 April
First Minister National Conversation speech Scotland Week University of Virginia address
Costs met by organiser
200 people
23 April
First Minister leads Scotland in Europe seminar
£1,700
60 people
3 May
Bruce Crawford Church Without Walls event
Costs met by organiser
205 people
19 June
Church leaders event in Parliament
£106
19 people
20 June
Bruce Crawford addresses SCVO event at SECC
*
45 people
29 July
First Minister and Cabinet event in Dumfries
NA
120 people
1 August
Young Scot event in East Ayrshire
*
100 people
5 August
First Minister and Cabinet event in Inverness
NA
100 people
7 August
Young Scot event in Stranraer
*
165 people
19 August
First Minister and Cabinet event in Pitlochry
NA
104 people
23 August
Young Scot event in Irvine
*
330 people
26 August
First Minister and Cabinet event in Skye
NA
105 people
30 August
Young Scot event in Inverurie
*
375 people
8 Sept
SCVO event in Uist
*
20 people
Note: *Costs met from within the allocation of Scottish Government funding to Young Scot and the SCVO.
It's your National Conversation - get involved I say!
Tuesday 11 November 2008
HBoSing across the universe ...
Conceived in the crucible of the financial crisis eight weeks ago, the proposed takeover of Halifax Bank of Scotland by Lloyds TSB now looks hasty, maybe even ill-judged.Not only but also:
Nor is the merger an attractive short-term prospect.
Assuming it is still viable, it could make more sense for the bank to remain independent. Sure, it would need more state support. But it could tap the government’s recapitalisation scheme for that. Some jobs might be saved and competition preserved as a result.
Only investors can block the merger now. Rejecting the deal may lead to share price falls. But it is in the ultimate interests of consumers that they do.
for this long-term observer of both men, there's a strong self-justificatory streak in what they are about.
HBoS - save the bank
Monday 10 November 2008
Hing on a wee minute
Has there or has there not been a bit of a paradigm shift in Scottish politics when the SNP is disappointed at failing to overturn a 10,500 majority? We're a bit cheesed off at only increasing our share of the vote by 13%, sad that we only slashed the majority, gutted that we never took one of Labour's safest seats, pure miserable that we didn't sweep everything before us.
Jings, crivvens, help ma boab, we're still improving.
Right, back to cheese...