LONDON BRIEFING:IT WAS the year that BP boss Tony Hayward wanted his life back and one of Britain's top bankers admitted that even his parents thought he earned too much.
One of the nation’s best-known companies, Cadbury, finally fell to foreign ownership, causing alarm among consumers over the future of the Curly Wurly. And Britain’s most-admired businessman, Sir Terry Leahy, served up the surprise news that he intended to retire as head of Tesco, the country’s biggest retailer.
In January 2010, Britain officially emerged from the longest and deepest recession in its post-war history. It may have been an encouraging start to the year ahead, but good news proved rather harder to find in the subsequent 12 months, as the fallout from the fiscal crisis continued to reverberate in the real world.
The origins of the crisis moved further back in time – in August we marked the grim third anniversary of the run on Northern Rock and, in September, the second anniversary of the calamitous collapse of Lehman Brothers.
Rather than fade with the years, if anything the impact intensified as government deficits ballooned and the sovereign debt crisis threatened to sink Europe.
Bank of England deputy governor Charlie Bean had a novel solution to Britain’s economic woes, urging the public to start spending again in an effort to fuel the recovery. He was roundly chastised by consumer groups, which said his reckless advice flew in the face of the nation’s new, post-credit crunch prudence.
There were numerous other foot-in-the-mouth moments, notably from BP boss Tony Hayward, who committed a series of gaffes as he blundered his way through the world’s biggest environmental disaster.
In May, just weeks after the Deepwater Horizon explosion, Hayward attempted to minimise the scale of the oil spill by pointing out that the Gulf of Mexico “is a very big ocean”. That was mild in the light of what was to come.
His now infamous comment – “there’s no one who wants this over more than I do. I would like my life back” – turned the hapless Hayward into a global hate figure.
In June, as millions of barrels of oil spewed into the Gulf, Hayward was photographed on his yacht on the Isle of Wight as he took part in a boat race. In July, he accepted the inevitable and stepped down as chief executive, although not before he had incensed a Senate committee in the US by saying he was “too busy” to testify.
Bankers can always be relied upon for an insensitive quote or three and they did not disappoint in 2010. Thus Stephen Hester, who runs the bailed-out Royal Bank of Scotland (RBS), told a committee of MPs that his three- year pay and bonus package, worth up to £10 million, was only “the going rate” for the job.
Hester also admitted that even his parents thought he was paid too much.
Not to be outdone, RBS chairman Sir Philip Hampton admitted what we’ve all known all along – that bankers do not deserve their cash. “We are paying a lot of people who aren’t worth it,” he admitted in October.
It was not, perhaps, the best way to kick off a campaign aimed at restoring trust in the banking sector and the timing was poor, coming as it did on the same day it was revealed that child benefits were to be stripped from more than one million “better-off” households; just the sort of households, in fact, who pay the salaries of those worthless bankers at state-controlled RBS.
Bankers and their bonuses will continue to dominate the headlines in 2011.
Despite the government’s £2.5 billion banking levy, and new rules on deferred and cash payments, estimates suggest that £7 billion will be paid out in the coming weeks. RBS alone is said to be planning a £1 billion windfall for its investment bankers, including the first cash bonuses since it was bailed out more than two years ago. At Barclays, the figure could be three times that.
It wasn’t just the bankers who were well rewarded – Reckitt Benckiser’s Bart Becht, long one of Britain’s best-paid chief executives, set a new boardroom record when it was revealed in April that he had earned more than £90 million in cash and shares in a single year.
That took the total for the man behind Cillit Bang kitchen cleaner to more than £200 million since 2005, a figure that might strike even a banker as excessive.
Debt-laden airport operator BAA was blasted for its failure to invest in snow-clearing equipment at Heathrow after snowstorms and the freeze is estimated to have cost it £40 million.
Retailers have been hard hit by the snow chaos. Pent-up demand means people are flocking to the sales, but higher prices and spending cuts make for a bleak year ahead as the Age of Austerity takes Britain in its icy grip.
