A Shareholder Spring!
During a Commons debate on Monday on the Queen's Speech I made it clear that shareholders are "flexing their muscles" to veto massive bonuses and deals secured by banking bosses, including Barclay's Bob Diamond.
It's clear that voters are sick of corporate greed in general while ordinary families are struggling to get through the recession. Earlier this month I delivered my own report to Business Secretary Vince Cable highlighting runaway executive pay and perks which has seen the average bonuses of top executives rise by over 253 per cent over four years, while share prices fell by 5.4 per cent.
There is no doubt that we have reached a tipping point on executive pay and that such high rewards seem excessive, especially when set against a global downturn, a European debt crisis, a banking crisis, redundancies and high youth unemployment levels"
The huge pay increases awarded have not been aligned to increases in the growth of the businesses concerned, or their profits or share price. That points to a failure of the market and a failure to uphold fair standards. As Conservatives, we believe innately in fairness and the power of market forces to do good in society. It is therefore imperative that we Conservatives correct this failing system that has been allowed to grow and go unchecked--particularly since 1998, under Labour rule.
While changes must be introduced into the banking system, because although it is guilty of the worst of the excesses, the industry employs 1.1 million people in the UK and delivers 11% of UK tax receipts. So we need a system that will allow one of the UK's greatest business successes to survive and prosper not wither and move offshore.
The coalition Government also needs to encourage reforms which inject fairness into business remuneration. It is vital that we do that, for business and for the public if we want growth, jobs and a conducive environment for business to prosper in the UK.