Three things caught my eye this morning, the rather large hole in British Telecoms Pension Pot, by some accounts £9Bn, more than its market capitalisation.

This is nothing new-

Mr Ralfe estimates that under “true market valuations” the hole in BT’s pension could have ballooned to over £11bn – more than the market capitalisation of the former state-owned telecoms company.

The claims came ahead of BT today revealing the results of a three-yearly review of its pension fund alongside a disastrous set of full-year results.

“The scale of BT’s pension fund continues to overwhelm its market cap of only about £7.5bn,” Mr Ralfe said last night.

Daily Telegraph 13th May 2009

Not much progress has been made in nearly a year then! – and some estimates say that the figure is much higher than £9Bn. This company has liabilities of fifty per cent more than its assets.

Why is this insolvent company continuing to trade, and pay its liabilities off over seventeen years ? Because we have a two tier economic system and a two tier Insolvency Act and Companies Act.

Private Companies like British Telecom, RBS and HBOS are deemed too big to fail. Therefore Ladies and Gentlemen, you are cordially invited to extend a ‘guarantee’ to them. A bit like you being asked to extend a personal guarantee to your eighteen year old when he gets his first liabilities of running a flat before launching on three years of debauched living.

However in this case I am not related to any of the Directors of these companies, and it appears that the debauched living has been going on for longer than three years and these Directors are not eighteen years old. This way the Directors can blithely ignore the strictures of the Companies Act to run their companies solvently, they have no fear of the ‘Government Inspector’ determining that they are not fit to be Directors of a company and face a fifteen year ban.

The Law does not apply to them because the Bank of Mum & Dad Citizen has written a personal guarantee, on behalf of themselves, their children and their Grandchildren.

Compare this to the treatment meted our to the ‘private sector’ – first sign of a downturn, the Banks pull their overdrafts, no seventeen year pay back time for them, personal guarantees pulled, personal bankruptcy a certainty. No Public Guarantee for the SME’s. The only sector by the way that is likely to expand in future and start employing people.

This Government is fixated on propping up ‘flagships’ because of Trade Union pressure, Political Pressure, Not being offered a seat on the Board etc etc

These deadbeat industries have no motivation to reform, be competitive, be solvent. Because the Law treats them as above the Law. It is only now that we have nearly experienced a total systemic banking collapse, that there are moves to have capital adequacy ! What were the Directors doing for the last ten years other than collecting their fees ?

UK Plc simply cannot afford to keep propping the deadbeats up, they have to be placed into administration and hived off into smaller, more accountable regional units, not given seventeen years to pay back their debts and carry on as before.

The Second thing was the non response of the Great Helmsman as to the ‘Death Tax’ of £20 000 so that the elderly ‘can be dealt with’. The Trustees of the ‘State Pension’ scam over the last sixty years should be dragged before the Courts to explain why there is now a proposal to ensure that you pay for a lifetime, not seventeen years, into a compulsory insurance scheme that fails to deliver to the point where those same trustees (HMG) now propose to ensure that your grave is robbed and you keep contributing long after you are dead.

The final observation on the bailout; the French and German Governments are going to use the money they hold on trust to bail out the financial drunk down the road in Greece. I am still waiting to hear how Gordon has dragged us in to this mess.

Socialist Economy is an Oxy Moron, it does not exist, somebody else always has to pay, be it the dead or the unborn generations.

Sarbanes Oxley

1
Furor Teutonicus February 12, 2010 at 09:33

The Dictatorship do not want pensioners running around with private pensions. That means they are not reliant on “Government”, so are not controlable, and THAT would never do now, would it?

2
The Slogger February 12, 2010 at 10:22

Actually, I think the Government would secretly like everyone to have a private pension….and never retire.
There are a number of issues here.
Cyclops specifically said yesterday that Greece was ‘a Eurozone’ problem and doesn’t involve us. (Germany & France don’t give a toss whether we’re involved or not: they know we’re broke and can’t even afford our own QE)

As to the banks, they always have and always will bail out who they’re told to bail out when they are reliant on government money….and bail out only their mates when they’ve got money.
Neither the banks nor the Government have any money now.
This has never happened before in UK history.
As my Jewish friend Adam used to say, “Now you should worry”
xx

3
Sabot February 12, 2010 at 11:33

Is there a pensioner still alive that would vote Labour?

Brown wants us all dead, and then he wouldn’t have to pay us anything.

When The Labour Party first brought in The State Pension, most pensioners were dead by the age of 67. Thats why The Government spent all of the contributions on other things. It was their little pot of gold.

Tough. I have every intention of staying alive until I am at least 100. That’ll cost them.

4
chefdave February 12, 2010 at 18:57

State pensions are another type of financial innovation that really should be outlawed.

In theory they’re a lovely idea; of course we want to keep the elderly in a decent standard of living during their winter years. But the real world consequences ensure a financial noose is tied around the necks of the young who have no business paying for contracts made 20-30 years ago without their approval. Its another subtle form of debt slavery.

Its also another reason why wages will continue to be so crap in this country, meeting these liabilities will take an enormous toll on business and influence pay demands for years to come.

Somebody somewhere is going to have to make a massive loss eventually, my only concern is making sure its not me.