Post Office lawyer ‘takes no pride’ working for the company

Published

2 weeks ago

April 19, 2024

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A lawyer for the Post Office at the height of the Horizon IT scandal has told the public inquiry he feels “no pride” to be employed by the company.

Rodric Williams, a civil law specialist who joined the organisation in 2012, told the hearing he was “truly sorry” for being associated with the “greatest miscarriage of justice we’ve seen”.

A first day of evidence for the New Zealand national, now among three legal leads at the Post Office, saw Mr Williams admit a “bunker mentality” among staff in relation to the media’s coverage of the faulty Horizon IT system.

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In his second day, Mr Williams was pressed on what he knew about the Post Office’s ex-head of security John Scott allegedly shredding minutes from a meeting concerning Horizon bugs.

The inquiry heard the Post Office feared sub-postmasters who had been convicted of offences jumping on a “bandwagon” and challenging their convictions if damaging documents surfaced as part of the mediation process.

The word came as part of a 2013 meeting between the Post Office’s in-house and external lawyers, which read: “It was widely agreed that there was likely to be a ‘bandwagon’ approach in relation to defendants challenging their previous convictions.”

Mr Williams was also accused of knowing “perfectly well” that the Post Office had “relied on a liar and a perjurer to convict innocent people” following expert evidence provided by leading Horizon engineer Gareth Jenkins in the trial of sub-postmistress Seema Misra.

She was suspended from her branch in 2008 and handed a 15-month prison sentence, while eight weeks pregnant, in November 2010 after being accused of stealing £74,000.

The inquiry heard how the Post Office received advice from external barrister Simon Clarke in 2013 suggesting an expert witness, Mr Jenkins, and the Post Office had “breached their duties” to the court, and subsequent advice suggested meeting minutes talking about Horizon bugs had been shredded.

Questioned on his views on the wrongful conviction of Mrs Misra, Mr Williams told the inquiry: “I take no pride, comfort or confidence in having worked for an employer that has engaged in conducting the greatest miscarriage of justice that we’ve seen, or however it has been described.

“I don’t know where to go with this – it’s awful that people with convictions had them, and had them for the length of time that they did.

“And for my part in that, I’m truly sorry that I’ve been associated with this. I’m truly sorry for that.”

Chairman Sir Wyn Williams interjected: “I think the point, Mr Williams, is at a moment in time, namely 2014, when on any sensible reading of Mr Clarke’s advice from July 2013, there was a problem about Mr Jenkins’s evidence, the Post Office and you personally appeared to still be asserting to the world that the conviction was safe, amongst other things, because expert evidence had been called and the jury, by inference, must have accepted it.

“Those two things don’t sit very easily together, do they?”

Mr Williams replied: “No, they don’t, sir. No, they don’t.”

Addressing the destruction of meeting minutes in advice given to the organisation, Mr Clarke had written: “An instruction was then given that those emails and minutes should be, and have been, destroyed: the word ‘shredded’ was conveyed to me.”

Counsel to the inquiry Jason Beer KC asked: “Presumably you were quite shocked to read it?”

The Post Office lawyer replied: “Yes.”

Mr Beer later asked: “What steps did you take to ensure that it was investigated in any way whatsoever?”

After the witness said he did not recall, the counsel to the inquiry continued: “Is the answer none?”

Mr Williams replied: “I can’t remember what happened at that time 11 years ago – so what I felt needed to be done or should be done I can’t recall now.”

Following an interjection by chairman Sir Wyn Williams urging him to answer the question, Mr Beer continued: “Should the serious or very serious matters raised in Mr Clarke’s advice have been investigated by the Post Office?”

The witness said: “Yes.”

Asked if consideration was given to reporting the matter to the police, Mr Williams said: “I don’t believe so, no.”

Mr Beer continued: “Would you have been concerned if you found out that it was said to be the head of security that had given an instruction to shred documents?”

Mr Williams replied: “Yes.”

Business

Goldman Sachs scraps bonus cap for top London-based staff

Published

8 hours ago

May 2, 2024

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Goldman Sachs is removing a cap on bonuses for London-based staff, paving the way for it to resume making multimillion pound payouts to its best-performing traders and dealmakers.

Sky News can exclusively reveal that the Wall Street banking giant notified its UK employees on Thursday that it had decided to abolish the existing pay ratio imposed under European Union rules and which the government recently decided to scrap.

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In a video message to staff, Richard Gnodde, chief executive of Goldman Sachs International, which comprises its operations outside the US, said it had decided to bring its remuneration policy in Britain in line with its operations elsewhere in the world.

“We are a global firm and to the extent possible we adopt a consistent global approach across everything we do,” Mr Gnodde said in the message, which has been relayed to Sky News.

“The bonus cap rules were an important factor preventing us from being consistent in the area of compensation.”

He added that the shift would “mean lower fixed pay, but a higher proportion of discretionary compensation”, adding that it “also reflects the prudential objective of our regulators”.

The removal of the cap means several hundred UK-based Goldman staff will now be eligible for variable pay worth up to 25 times their base salaries, according to insiders.

As a consequence, allowances which were introduced to help those employees deal with the cap will begin to be reduced from 1 July, Mr Gnodde told employees.

People close to the bank insisted, however, that the revised approach would not necessarily mean senior employees being paid more, but that they could now be appropriately rewarded for exceptional performance and that the move would allow Goldman more flexibility to manage its fixed cost base.

Goldman is among the first major investment banks to signal its intention to pursue a revised approach to remuneration in the wake of the cap’s abolition by UK regulators last October.

Under it, firms were prohibited from paying their material risk-takers – or most senior staff – more than twice their fixed pay in bonuses.

Some banks used the mechanism of a fixed-pay allowance in addition to employees’ base salaries to give them more flexibility to pay larger bonuses.

While Goldman’s move may draw controversy, the EU bonus cap drew criticism from many influential figures in finance over many years, including from Andrew Bailey, the Bank of England governor, who said in 2014 that it was “the wrong policy [and] the debate around it is misguided”.

During his ill-fated stint as chancellor, Kwasi Kwarteng moved to scrap the EU bonus cap, saying it would boost the international competitiveness of Britain’s financial services sector.

UK regulators agreed that scrapping the cap would aid financial stability by enabling firms to reduce pay faster during downturns or in scenarios where they needed to conserve capital.

Mr Gnodde has publicly endorsed the removal of the cap, saying in 2020 that doing so would “put the UK on the same footing, aside from the EU, with every other major financial centre”.

“Removing that ratio makes London a more attractive place for sure,” he said at the time.

“If I move a senior person between New York and London I am driving up the fixed cost of our operations. If that rule doesn’t exist, I don’t have to think about that.”

While Goldman is among the first to notify its employees about its amended stance on bonuses for UK staff, many of its peers, including bosses at lenders such as Deutsche Bank and Santander have also criticised the cap.

At its annual meeting on Friday, HSBC is expected to win shareholder approval to remove the two-to-one pay ratio.

Other firms are also understood to be reviewing their UK compensation practices in light of the cap’s abolition.

Many industry executives have argued that the cap actually encouraged greater risk-taking because it put smaller sums of money at risk for senior bankers.

Insiders also pointed out that because the bonus cap does not impose a limit on overall remuneration, it had placed upward pressure on salaries and allowances not linked to longer-term performance, and which could not be reduced or clawed back if failure or previous misconduct had subsequently emerged.

Responding to an enquiry from Sky News, a spokesman for Goldman said: “This approach gives us greater flexibility to manage fixed costs through the cycle and pay for performance.

“It brings the UK closer to the practice in other global financial centres, to support the UK as an attractive venue for talent.”

Goldman has often been in the vanguard of responding to changing public policy in relation to bankers’ pay.

In 2010, it imposed a £1m pay ceiling on its UK staff after the then Labour government introduced a one-off tax on bank bonuses in response to the public outcry over the financial crisis.

Goldman’s decision to remove the two-to-one ratio comes as UK regulators also consult on the length of deferral periods for variable pay for senior bankers.

Mr Gnodde told staff on Thursday that Goldman would continue to lobby for closer global alignment on deferral periods, which would mean reducing the current UK duration from seven years.

Business

UK interest rates should stay higher for longer, OECD says, in boost for Bank of England strategy

Published

16 hours ago

May 2, 2024

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UK interest rates should stay higher for longer, OECD says, in boost for Bank of England strategy

One of the world’s leading economic authorities has warned the UK that borrowing should remain expensive until the rate of price rises eases further and stays there.

Interest rates, which are at a post-2008-era high of 5.25%, should stay there, according to the Organisation for Economic Co-operation and Development (OECD).

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“The fiscal and monetary policy mix is adequately restrictive and should remain so until inflation returns durably to target,” the OECD’s economic outlook for 2024 said.

It’s an endorsement for the approach of the Bank of England whose statements on inflation have not indicated an imminent rate cut.

UK forecasts

The report from the club of developed nations also said the UK economy will “remain sluggish” with gross domestic product (GDP), a measure of everything produced in the economy, this year expected to grow 0.4% and 1% in 2025.

Some good news is expected for UK workers as the OECD said there will be “stronger” wage growth when inflation is factored in against pay.

This in turn will support a “modest pick-up” in the amount households are consuming.

But the rate of price rises will continue, the OECD said, with inflation anticipated to be “elevated” at 3.3% in 2024 and 2.5% in 2025 – above the Bank’s 2% target.

Such forecasts bolster the idea that rate-setters at the Bank could keep rates higher for longer to draw money out of the economy in an attempt to halt price rises.

No rate cut will come until at least August, the OECD added.

If the inflation forecasts prove to be true, the UK will not be the worst performer among the G20 group of industrialised nations. The average among that collection of countries will be 5.9% this year and 3.6% next year.

Business

Chinese companies receive far more state support – making it harder for Western businesses to compete, data suggests

Published

19 hours ago

May 2, 2024

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Chinese companies receive far more state support - making it harder for Western businesses to compete, data suggests

Chinese manufacturers receive nine times more government support than their Western counterparts, according to calculations from the Organisation for Economic Co-operation and Development (OECD) which help explain the country’s complete dominance in so many sectors, from solar panels and batteries to steel.

The figures produced by the OECD show that Chinese businesses benefit from government subsidies equivalent, on average, to 3.7% of their revenues. This compares to average state aid of only 0.4% of revenues for countries in the rich world.

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The data are a critical part of the explanation for Chinese dominance in certain fields, not to mention part of the explanation for why the UK has seen its manufacturing base shrink so rapidly in recent years.

While China provides large amounts of assistance to key sectors, including its solar photovoltaic sector and base metals producers of aluminium and steel, UK governments have for decades tended to be considerably less interventionist. The upshot is that the UK has seen many plants closing, unable to compete with cheap imports.

Up until now there has been no definitive measure of how much those cheap imports have been influenced by what economists call “state aid” – whereby governments help their companies.

In part this is because measuring state aid is fiendishly difficult.

At its simplest, it can take the form of direct grants from governments, to support a company or help it to build a plant. However, some countries are less transparent than others about these grants. But arguably more important are special low taxes sometimes charged to specific companies or sectors, and lower-than-market interest rates which are sometimes offered to favoured firms.

The OECD analysis, which has yet to be published as a formal report for widespread release, is the most comprehensive attempt yet to quantify those various types of state aid and compare different regions to each other.

Its finding, that China provides significantly more state aid for its manufacturers, is unlikely to come as a surprise – but it provides a statistical backbone for arguments that the global trading system does too little to confront these interventions.

It also finds that the amount of state aid varies significantly from sector to sector, with aluminium smelters, cement manufacturers and solar cell plants receiving most assistance. However, the report pre-dates the rapid increase in Chinese production of batteries in recent years.

Under Joe Biden, the US has introduced a host of measures, from the CHIPS Act to the Inflation Reduction Act, designed to provide subsidies for those making semiconductors and green technology in the US.

However, even after those interventions, total state aid in the US is still likely to be short of the Chinese total.