Luckily those deals collapsed, revealed as the senseless quick-fixes they were. But that still left NYSE/Euronext and Deutsche Borse proceeding to create the biggest stock exchange in the world. But now the European Union has come to the rescue of London, Toronto, Nasdaq and every other global exchange that would have been dwarfed. The EU has blocked the deal 12 months after it was announced, returning the share-dealing world to its status quo.

NYSE argued that combining the French and German exchanged would create a “European champion”. EU competition commissioner Joaquin Almunia argued it would be a “near monopoly”.

But blocking that monopoly has also stopped those other brakes on competition being applied: a London-Toronto deal might not have rocked the world but linking Nasdaq with the New York Stock Exchange – nevermind Paris – would have created a unit that ought to have shocked American anti-trust regulators too. The deal not only combined international equity exchanges but derivatives markets too.

Yet was Almunia motivated by competition worries or protectionism? Technically, the NYSE/German deal involved Deutsche Borse buying the Americans but there was no doubt that power would rest in New York. It was Canadian protectionism that eventually caused London’s deal with Toronto to be called off and Australian protectionism that prevented the Sydney exchange being merged with Singapore’s.

Global stock exchanges have spent more than a decade courting each other – largely without success. The NYSE/Euronext deal, which includes London’s Liffe futures market, is the only significant consolidation to be completed. Besides those recent collapsed Nasdaq, Canadian and Australian deals, attempts by Nasdaq, NYSE, Deutsche Borse, Australia and the Swedes to takeover the London Stock Exchange have all failed.

The block on the NYSE-Frankfurt deal must surely mean no more mergers will be attempted for a long time. Markets have changed over that decade: exchanges now plan mergers out of weakness, not strength. Electronic platforms are stealing their business making national stockmaarkets increasingly irrelevant.

The government has decided that 90 per cent of vocational qualifications – including those ‘non-subjects’ - are no longer equivalent to an o-level. Well, maybe the answer is to make them equivalent by increasing the degree of skills that the student requires – and that means increasing the depth of teaching.

There is nothing wrong with vocational subjects and for many people they are the best choice. Law and medicine are just as vocational as horse care and hairdressing. And for some employers, a piece of paper proving that a job applicant is proficient on those ‘non subjects’ is more important than a grade-A in history or geography.

Employers have learned how to discount the value of the current qualifications, however. The problem is more with schools that promote these easy options so that they can claim success on league tables that measure GCSEs or their equivalents.

Ending that abuse of the system is right, but ministers should not dumb down vocational training. It is a useful background for many students and for many employers: it will ensure that some teenagers can prove their worth and get jobs when even some of their academic colleagues are still searching.

But qualifications must reflect ability and vocational training must thus be just as rigorous as any other. There’s nothing wrong with the subject matter, just the superficiality of the teaching.

True, 2011 was a difficult year. A country renowned for its tight productivity and just-in-time manufacturing was hit by a tsunami that left gaps in its domestic supply chain, then by floods in one of its major export markets, Thailand. But exports fell less than 3 per cent while imports grew by more than 12 per cent.

The real problem is those massive reserves Japan has built up. They ensure the yen is still strong – strength made greater by Tokyo’s status as a safe haven when the dollar and euro are in trouble. A 17 per cent increase in the yen’s value over the past year makes imports cheap and exports expensive.

Japan has the same problem as Switzerland but not the facility for weakening its currency. Germany used to be in much the same position, but by pooling the deutchesmark into the euro, Frankfurt has inherited liabilities that put the brake on its economy. Japan may be heavily indebted, but unlike other troubled nations, it borrowed most of the money from its own people in its own currency.

A trade deficit in Tokyo nevertheless marks a sea change and one that Beijing ought to watch. China is where Japan used to be but it is converging with the northern island quickly. Beijing has built up high reserves that it is investing in the west and which ensure the renminbi is uncomfortably strong. But it is quickly switching from being an exporter to being a consumer of its own goods and its people can now afford to import quality goods.

At some point China may turn its trade surplus into deficit too. Who then will finance the western world? Who will supply the west with cheap goods? And how will Beijing cope when its currency weakens? It should study Tokyo’s transformation and learn the lessons.

Grandstanding politicians have wriggled. David Cameron says shareholders should block pay deals but, on the clearest case where he is the main investor, the prime minister refused to do the deed. Work & pensions secretary Ian Duncan Smith (what’s it got to do with him?) passed the buck to Hester saying he should refuse when the government hadn’t the guts to do it. Deputy PM Nick Clegg claims to be bound by a contract signed by his Labour predecessors but a reading of this contract debunks that claim totally. And Labour’s Ed Miliband called a House of Commons vote to dare the Tories into denouncing the deal their leaders wouldn’t undo.

So much nonsense has been spoken on Hester’s bonus and so little sense. Well done the Labour MP who complained that the bank chief receives 52-times the UK average salary. Does he suggest 52 ordinary people cram into Hester’s office and try to do his job?

George Osborne stood out in speaking sense by conceding that sorting out RBS requires a talented person who deserves to be paid for the job. The chancellor appreciates the problem he’d face if Hester quit.

It’s easy to see why Hester has given in to this pressure from parliament, public and press, but surely we want a stronger boss than that? He made a mistake. When Hester goes – and forcing him to forfeit his bonus for a second year must bring forward that date – what sort of person will apply for his job? Whatever they are promised at the interview is likely to be reneged on as soon as there are votes to win.

The only suitable candidates may be those prepared to work for free to improve their reputation. Fred Goodwin, for instance?

The list includes 277 people who turned down honours between 1951 and 1999 and who have since died. So those people still living who have rejected titles and medals must spending their dying days fearing that the same information will be published after they too have passed away.

In fairness, the Cabinet Office spent 18 months arguing why this information should remain confidential. That merely confirms Blair’s admission of his error in passing this legislation as prime minister in 2005. He blamed his civil servants in his autobiography.  “Once I appreciated the full enormity of the blunder I used to say to any civil servant who would listen: Where was Sir Humphrey when I needed him? How could you have allowed us to do such a thing so utterly undermining of sensible government?” he wrote. “It is a dangerous Act.”

The 277 names on the list are notably short of business people: they seemed to have no qualms in accepting tokens of recognition from their country. But the FoI revelation is a dangerous precedent that business should worry about. It shows that it is not only government deeds that are subject to disclosure, but also those of private people – and presumably private companies – if they come into contact with the state, however unwelcome the connection.

Officially the FoI applies to government and quasi-state bodies but as transparency and disclosure is widened – as is happening with corporate pay - it is not unlikely that public companies will ultimately be subjected to a similar regime as public authorities. The Cabinet Office must resist the concept that everyone is entitled to know everything: if someone turns down an honour and keeps quiet about it, who is the state to reveal that?

On the contrary, the trend suggests that there may be a third quarter of decline to come – and who knows what is beyond that horizon. The IMF has slashed its forecast for the year’s growth from 1.6 to 0.6 per cent, which suggests some positive months at the end of the year to offset the initial decline, but forecasts have been persistently lowered and could be cut again.

Britain is not alone, of course. Europe is heading for its third recession in a decade but the UK avoided the slump of 2012 that hit the Continent and US so it is not inevitable that we are pulled off course by other economies. While the IMF has reduced its forecast of US growth, that country is still set for an increase that would be welcome in the rest of the developed world.

However, the deeper that the eurozone sinks into recession, the fewer opportunities there are to trade with our neighbours and, despite not being a member of the single currency, UK exporters have received no currency advantage from a falling sterling.

George Osborne might not want to call it Plan B, but if it is too late to prevent Britain returning to recession, the UK chancellor does need to devise an economic policy that limits it to two quarters rather than allowing it to continue beyond the summer.

That’s why they have no great wish to borrow. Businesses are throwing off money, but they are throwing it at their shareholders. They are not buying new equipment, not spending it on staff and not making takeovers.

Dividend payments rose by 19.4 per cent in 2011 according to Capita, one
of the registrars making those payments.

Even stripping out a £2bn special dividend pledged by Vodafone and allowing for BP’s return to the lists after its oil spill, that’s an underlying rise of an inflation-busting 12.8 per cent and leaves the FTSE 100 yielding 3.5 per cent.

Normally if an investment is yielding so much more than money rates it is because investors doubt that payments will continue or doubt that they will rise with inflation. Yet Capital somehow forecasts that dividends will rise a further 11 per cent in 2012.

And those increased payments are still covered 2.77-times by earnings, which suggests that profits could take a big hit without shareholders having to feel the impact.

Total payments were £67.8bn in 2011 with special dividends accounting for only £2.9bn of that - and Vodafone accounting for all the increase in those one-off hand-outs. Much of that cash goes abroad but a sizable chunk goes into pension funds, making their finances more sound, which means that companies are less likely to need to top up black holes. That’s a double gain for corporates.

But the underlying worry is that if companies would rather give away their cash than spend it, they cannot be confident about future prospects. And if the investors receiving that money don’t think it worth pushing share prices higher, they too must be worried about the future.

The Royal Bank of Scotland chief executive had taken-over NatWest, a tired and failing English bank unloved by its customers, and rejuvenated it. He had turned his company from a Scottish bank into a national – indeed, international – player. Its success provided tax income for the Treasury and produced invisible earnings that offset Britain’s trade deficit. Goodwin looked a clever banker and was thus honoured.

Subsequent events suggest he might have been more lucky than clever. When he repeated the trick with ABN Amro, Royal Bank overstretched itself and had to be rescued by the UK government.

But if Goodwin is to be stripped of his honour because he later became a bad banker, what about those athletes rewarded for their success on the track or field? If at some subsequent Olympics or World Cup they do disastrously, should they return their medals? What of the actor honoured for his performances who then goes downhill? Should he or she hand back their title?

What of the person honoured for their work to charity who, later in life, stops donating or doing good deeds?

Twice a year, when the New Year and Queen’s birthday honours are announced, are we to have a further list of those honoured in previous years who are now deemed no longer deserving? Sir Fred’s knighthood was a fair honour when it was given: if the lynch mob now looking to dishonour him intends to proceed it requires a more logical argument than hindsight.

These proposals were included in Labour’s 2010 general election manifesto and failed to win support then. The Takeover Panel reviewed its rules subsequently but rejected the ideas, as Miliband should now.

First, shareholders in target companies do not usually vote on takeovers. They either accept the bid or they don’t. The bidder thus needs half of all the shares – not half of those that vote. If investors buying during the course of the offer are barred from accepting, then the outcome could be decided by a minority.

And such a move would punish sellers as well as buyers because the price of a share without a ‘vote’ would be less than one sold with. Prudent long-term holders seeking to crystallise the gain from a bid would thus be harmed. Further, after lobbying passive shareholders for years to vote, it seems odd now to tell some investors they cannot.

And the two-thirds majority would be perverse. It could mean that if 65 per cent of investors want a change of ownership, they would be outvoted by a 35 per cent minorioty. If, say, 20 per cent of the shares are excluded because they have been bought during the bid, then just 15 per cent of shareholders could decide the outcome.

Miliband, in his Financial Times article advocating change, admits that some takeovers might have been crucial to turning round failing companies. A bid, or the threat of a bid, is a useful way of making managers perform. Protecting companies against bids allows inefficient managements to continue.

The Labour leader’s City policy requires more thought. Tampering with the rules of democracy is dangerous. This looks like a short-term ploy to steal ground from his political rivals.

The UK’s current population puts it on a par with Italy and France, two other key members of the G7 and EU, so annexing Scotland would push London down the power league, but not seriously. It would be Edinburgh that felt the difference.

Scotland would have to look for new partners. The nationalists’ past proposal to form a Celtic alliance with Ireland and Iceland now looks a nightmare rather than a dream. The country would remain an EU member but would be as peripheral and small as Malta, Cyprus, Slovakia or Slovenia.

Joining the euro might thus seem more important for gaining allies than for severing the link with sterling, but if Edinburgh thinks it has suffered from being in a currency union based on London, the union run from Frankfurt looks worse. Scotland would be putting itself in the same position that Greece is trying to get out of.

So in practical terms, Scotland would continue to print pounds for at least the medium term: interest rates might officially be set in London but in reality, they are set by the market and Edinburgh could expect to pay a small risk premium that varied with its fortunes.

Independence would mean much bigger economic problems than that. Like can Scotland claim the assets of the oil without assuming the liabilities of its banks? How would the current UK national debt be split? Could the UK claim ownership of projects and infrastructure it has financed? Division would be painful.

Separating off Scotland would increase the per capital GDP of the rest of the UK. But as Scotland is financed by taxpayers south of the border, losing this northern country would improve the rest of the UK economy. England and Wales might not be invited to vote on Scotland’s independence but you can see why they could support it.

And beware the Tories. Yes, they would like to keep the union intact. But annexing a country that is overwhelming predominantly Labour would increase the Conservatives’ majority at Westminster by 40 seats. The government may be quite happy to let Scotland go. Coalition would be unnecessary. Scotland’s vote would mean not only independence for England but for the Tories too.