Earth to Solicitors...

Sometimes I wonder if some solicitors live on a slightly different planet where they exist in a different context to the rest of us. For exhibit one I refer you to this story in "The Lawyer".

The central point of the story above is that lawyers and law partners will be hit hard by the newly announced increase in National Insurance and that this is a step too far and "...It could be the straw that breaks the back for some". We are talking about a half-a-percent increase in tax payments for people earning well in excess of four, five or six times the national average wage. I can understand lawyers thinking this but I'm amazed that any wanted to see them published. The vast majority of those who will pay the new rate of NI will be those between the threshold of £20,000pa and those earning just the other side of the average wage - all of whom are unlikely to be too sympathetic to lawyers appearing to say "poor us - we will need to pay a little more of our enormous salaries in tax". Perhaps they are concerned that bankers are streaking ahead in the "being hated by the public" stakes...?

Please note that I am not one of those who feel that no-one should be paid more than a set sum, or who would normally complain about lawyers' earnings. Most lawyers work pretty hard and if someone is willing to pay them hundreds of thousands of pounds each year then they would be mad to refuse it. Taxation based on income is, however, much more fair than a flat tax paid by all - such as the UK's VAT. While high earners will pay more tax - they do, of course, earn more money in the first place.

Rather than selfishly whining about NI, perhaps lawyers should be seen in the national press to be concerned about society's issues - such as the return to 17.5% VAT which will hit the very poorest the hardest. I'm sure that solicitors have a social conscience, so it seems unfortunate that press stories such as that in "The Lawyer" portray them as money-grabbing and insensitive.

Context is everything. Paying a little more tax on a high salary is a nuisance - but you can afford it. Perhaps we should all consider those who will face real difficulty. Imaging earning £22,000 a year - now faced with an increase in NI, no increase in the Income Tax thresholds, and an increase in VAT which will mean that almost everything you have to buy will cost more in January than it did in December.

Context: Bhopal

I started to write a post about the Royal Bank of Scotland and the prospect of a fight between the Board and the Government with regard to bonus payments. Two things stopped me. The first was that Peninsulawyer had already written a better post that I was going to (here). The second, however, was the anniversary of a man-made disaster - the Union Carbide plant at Bhopal. The BBC have a good summary of the story here - I've used their graphic below.

It's a dreadful story of corporate incompetence and lack of care which led to the deaths of a huge number of innocent locals. The contrast in the numbers associated with this event are staggering. Seven thousand dead; over six hundred thousand affected. What is worse, however, is the number associated with the "pay off" from Union Carbide - $470 million. It sounds like a lot of money, doesn't it. I suspect that's the point. Divide it amongst the families of 7,000 victims and 600,000 other affected people, however, and it is insignificant.

Imagine this disaster happening to a town on the outskirts of London. Firstly, of course, the chances of a rather wild chemical plant being sited near to wealthy people is not high - Union Carbide didn't choose Bhopal because it was handy, after all. Let's get past that point and imagine that a chemical plant near London suffers the same sort of problem - i.e. incompetence, poor management and an almost total disregard for the safety of people living nearby. Can you imagine a payment of only $470 million? No - of course not. Can you imagine  that no-one would ever be prosecuted for the disaster? No - of course not. There would be massive payments, and a fund established for future problems. Western lawyers working for rich insurance companies would not led anyone off with a "full and final" settlement in 1989, when the effects are still being felt in Bhopal. It is a scandal that there are - statements from the Indian Government notwithstanding - still health problems in the area. It is a scandal that there has never been a criminal prosecution.

In this context, the idea that some bankers might be paid a lot of money rather pales into insignificance for me. Perhaps they will read the news and donate half (say) to the families still living in Bhopal? No, probably not...