Category Archives: Economic

Britain, Business, Economic, Government

Leading firms must say how chief executive salaries compare with staff

CORPORATE GOVERNANCE

LEADING companies will be forced to disclose how much their chief executive is paid compared to their average worker . . . and justify the sum.

Business Secretary Greg Clark is due to announce this week that nearly 1,000 listed firms will have to publish the ratio in a crackdown on excessive boardroom salaries.

It is also believed that a new public register will name and shame those whose investors revolt over the pay of bosses.

The plans will be announced as ministers seek to rebut criticism that they have watered down the tough approach promised by Theresa May.

Last year the Prime Minister unveiled radical proposals, such as workers being granted representation on boards, but she has since backed away from these ideas. The plans follow criticism over the high pay of executives following scandals such as the collapse of BHS.

Mr Clark will announce that the Investment Association, the fund managers’ trade body, will oversee the creation of the new register to include any company which faces opposition from at least 20 per cent of shareholders.

Ministers say the publication of ratios between bosses and UK-based workers will shine a spotlight on boardroom pay. It is unclear if the figure for chief executives would be their total package, which averaged £4.5million last year in the FTSE-100, or only their much lower base salary.

Mr Clark is also expected to say that the Government will guarantee workers at listed companies a louder voice in the boardroom by amending the Corporate Governance Code. This will be achieved, according to sources, by designating a non-executive director to represent workers, nominating a director from the workforce or a new advisory council which would have access to board members.

That would meet a commitment made in the 2017 Conservative manifesto although the Government is abandoning a general election pledge to ‘legislate to make executive pay packages subject to strict annual votes by shareholders’.

Companies will also have to produce an annual statement explaining how they acknowledge the interests of workers and wider stakeholders. In addition to the rules to be imposed on big public companies, privately owned businesses, including Sir Philip Green’s Arcadia Group, will become subject to a new voluntary code of corporate governance principles supervised by the Financial Reporting Council.

The proposals will be hailed by ministers as a robust package of reforms designed to make big firms more accountable. They come after corporate governance failings at Sports Direct International and a bitter revolt over a £14million deal for BP chief executive Bob Dudley. This has spurred the Government to pledge a crackdown on boardroom excesses.

The collapse of high street chain BHS after being sold for £1 by Sir Philip was also a factor in hardening public and political opinion against the bosses of big businesses.

This year, there were fewer major protests over the pay of executives at FTSE-100 companies but there was a significantly higher number of revolts over bosses in the FTSE-250 index.

Under Sir Vince Cable, the former Business Secretary and now Liberal Democrat leader, shareholders in public companies were handed a binding say every three years on remuneration policy.

But the annual vote on what directors receive is on a non-binding basis and looks likely to continue that way.

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Britain, Economic, Government, Politics, Society

Rapacious fixed-odds betting terminals should be curbed

BRITAIN

Fixed Odds Betting Terminals

The Institute for Public Policy Research estimates gambling costs the UK more than £100 million.

IN 2005, a law to liberalise gambling was passed by the Labour government. Following a vociferous public campaign, it was only then that the government was forced to abandon its plans for giant super-casinos across the country.

Nevertheless, with neither fanfare nor further public debate, the new law effectively allowed every high street betting shop to turn itself into a casino – by installing fixed-odds betting terminals (FOBTs). These touch screen machines, which are so addictive they’re compared to using crack cocaine, offer casino-style games such as roulette, blackjack and poker. In just 20 seconds, a player can gamble – and lose – £100.

Today, it is clear that the social consequences have been catastrophic. Driven by the greed of bookmakers’ in their quest for riches, the number of machines has doubled in just a decade to 35,000. It is no coincidence that the number of problem gamblers has also more than doubled, to almost 600,000.

Meanwhile, we have seen rising violence in betting shops, more family breakdown and ballooning levels of personal debt. Inevitably, it is the poorest communities – where the highest concentration of betting shops are found – which have suffered most.

For those hopeless and desperate gambling addicts who stand like zombies, pumping in money until they have none left, these corrosive machines are life-destroying. But more depressingly, they destroy the lives of those closest to them, mostly the wives and children of those who have become addicted. The bookmakers, meanwhile, profit to the tune of £1.8billion a year.

To his eternal shame, David Cameron also failed to confront this problem with the necessary political rigour that was needed. Instead, what we got was a token effort, in the form of a registration scheme for those wanting to bet more than £50, which was cynically exploited by bookmakers who could target addicts with mouth-watering offers. He ducked entirely the one change that would have made a difference: by reducing the maximum stake. That stank of surrender to the army of betting industry lobbyists.

Now there is good reason to fear we may face another betrayal. Last year ministers launched a new crackdown on fixed-odds machines which promised to consider cutting the maximum stake.

The review has, however, stalled because those at the Treasury fear losing vast sums of tax revenues if stakes are cut from £100 to the suggested £2.

For many, this will seem an utterly immoral position. It is also deeply misguided, for it ignores the benefit to the taxpayer which would come from limiting these rapacious machines. Isn’t it obvious that the State will save a fortune by not having to rescue the countless families broken by addictive gambling?

Chancellor Philip Hammond’s position sits very uncomfortable with a government led by Theresa May, who came into office determined to fight for the vulnerable against unfettered and exploitative capitalism.

As the daughter of a clergyman, Mrs May won’t need the Church of England to say – as it commendably did last week – that these machines are deeply iniquitous.

After a disastrous election, reigning them in is exactly the kind of policy which would prove that Mrs May’s government retains both its authority and moral purpose.

Very few issues in politics are black and white. But with fixed-odds betting terminals, the case for controlling them is unanswerable. The Treasury should consider its position on FOBTs and realise the huge damage that addiction to them is causing.

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Britain, Economic, European Union, Government, Politics

Project Fear? Countries are lining up to trade with UK

BREXIT

NEARLY all of the countries that Remain campaigners said would not want to trade with Britain post-Brexit have called for deeper trade links.

Of the 111 countries that ‘Project Fear’ campaigners said would not want a deal if the UK chose to leave the EU, 105 have signalled that they want to work with Britain.

In the build-up to last year’s EU referendum, the official Britain Stronger in Europe campaign claimed that the countries would have ‘moved on’ after Brexit.

But campaign group Change Britain found that eight nations have ‘enthusiastically’ asked for a free-trade deal with the UK, 97 have said they want a deal in principle, and just six have not yet said whether they are interested in a deal.

Former trade minister, Lord Jones, a Change Britain supporter, said: ‘This report demonstrates that the pro EU Project Fear campaign was nonsense. The UK has the world’s fifth largest economy, the world’s leading financial centre and many of its best companies, innovators and universities. The rest of the world is queuing up to do trade deals with us.’

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