From the TUC

Goldman Sachs and the university question

16 Jul 2010, by in Economics, Politics, Working Life

Sometimes, two separate news stories are presented in the same news bulletin and, taken together, make a wonderful statement about the world we live in.

This was my experience this morning as I watched BBC Breakfast. Today’s programme contained the worrying news that, according to figures from the university admissions service, Ucas, universities have received more than 660,000 applications and a record 170,000 students are thought likely to be denied a place this autumn.

The same news bulletin then informed me that the US bank Goldman Sachs had agreed to pay $550m (£356m) to settle fraud charges of misleading investors. This morning’s FT gives more information. This penalty is, we are told, about a week’s worth of trading revenues for Goldman Sachs.

What does this have to do with us? The BBC says that the Royal Bank of Scotland, which is now 84% owned by the UK taxpayer and lost about $840m in investments, will receive just $100m compensation.

Goldman Sachs’ share price went up after the ruling, suggesting that many analysts felt the firm had got off lightly. Goldman said the settlement was “the right outcome for our firm, our shareholders and our clients.” No kidding!

But it was hardly the right outcome for British taxpayers. Naturally, I went onto the Treasury website this morning, to read the UK Government’s statement condemning this shortchanging of the British taxpayer – that’s you and me – and setting out what action it would now take to get us fairer compensation. But, strangely, no such statement seems to exist.

Which is a shame. Because if we were to get a fair settlement, imagine how many extra university places we could fund. Many of those 170,000 students could take up the degree courses for which they have workes so hard. And the UK, seeking to compete in a globalised economy with China and India, who each produce about half a million engineers and technicians a year, would stand a better chance of building a strong economy in the future.

P.S. According to the Daily Mail in January, Goldman Sachs awarded its bankers a 57% increase in their pay packages last year. The average employee scooped £308,000 in salary, bonuses and other benefits. Goldman even had the cheek to say it had showed restraint in this increase. Lib Dem Treasury Spokesman at the time, Vince Cable, now the Business Secretary, said that “the bonus culture in the banking system has got entirely out of hand and must be curbed”.

Too right it must. And British taxpayers should be properly compensated. Over to you, Vince!

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