成人快手

Royal Mail: Pensions burden

• Robert Peston
• 8 Feb 07, 12:51 PM

For ministers, the Royal Mail is a kind of giant testing ground for their intermittently bold plans to reconstruct the public sector.

Ministers were particularly impressed three or four years ago when Royal Mail reduced its workforce by some tens of thousands - which fired up the determination of the Treasury to reduce headcounts and costs elsewhere in the public sector, though so far without notable success.

So is that Royal Mail is closing its generous final salary scheme to new members and looking to reconfigure the scheme in a way that reduces its financial burden on the company. Difficult to see how that can be done without reducing the benefits it gives 170,000 working members - or perhaps increasing the costs for them.

As Allan Leighton, Royal Mail's chairman, said to me this morning, this is big stuff. But It's probably unavoidable when the company feels its long term viability is threatened by the 拢730m annual cost of servicing the fund.

It is conspicuous that Leighton has received backing from Alistair Darling, the trade and industry secretary, for these proposals. So a chill will be sent through the rest of the public sector, where pensions are conspicuously more generous than what's generally available in the private sector.

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HSBC US troubles

• Robert Peston
• 8 Feb 07, 07:15 AM

The terrible thing is that I was pleased to learn overnight that has made a fairly big banking boo boo in the US. It unexpectedly announced a rise in bad debt provisions at its US mortgage business, which would lift total group loan-loss provisions by 20 per cent to about $10.5bn in total (more than 拢5bn), which ain't small potatoes.

Why should this be of any satisfaction to me? Well, there鈥檚 a slightly complacent view around in the banking industry that these days the banks are living in a risk free world, that the days of lending going horribly wrong are past. How so? Well it would be thanks to financial innovation (the ability to parcel up risk and place it out with investors in the market) and technological innovation (the ability to monitor much more precisely what鈥檚 being lent to whom).

The thing is that once upon a time I was the banking editor, at a time when almost every UK bank鈥檚 forays overseas ended in tears, and when it was almost guaranteed that if a bank could lend to a terrible prospect, it would do so. Bad debts accumulated by British banks between 1982 and 1992 were so enormous that they could have sunk a medium-size economy.

In the 15 or so years since then, banks鈥� profits have tended to rise in an almost straight line, along with the path of the global economy. And I鈥檝e watched with growing alarm as their confidence has grown and they鈥檝e become bolder and bolder in their expansion, especially their overseas expansion.

Now I鈥檓 not denying that the quality of their management and 鈥� more important 鈥� the quality of their management systems is much better than it was. And it is true that they are much better at measuring and containing risk than they were. They have become better quality businesses. But when I鈥檝e asked them 鈥� as I regularly have 鈥� whether there weren鈥檛 dangers in their becoming much larger and more complex businesses through all their acquisitions and diversifications, they鈥檝e looked at me as though I was a Neanderthal.

So, of course, this morning I鈥檓 doing the 鈥淚-told-you-so鈥� dance in the London snow. And the great thing about the HSBC鈥檚 announcement is that it鈥檚 a non-fatal warning to all banks to watch out. When a huge market 鈥� like the US housing market 鈥� turns down, even the mighty HSBC isn鈥檛 immune. And what鈥檚 particularly humiliating for HSBC, is that these seem to be old-fashioned consumer credit losses, rather than a thoroughly modern intake of toxins relating to some kind of synthetic and thoroughly opaque financial product. Let鈥檚 hope the losses are salutary for it and its peers.

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