Labour calls for 'responsible and better' capitalism

 

Chuka Umunna called for the government to "foster better business practice" to create a "better capitalism"

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Labour has called for "more responsible and better capitalism" and policies to tackle excessive executive pay.

Shadow business secretary Chuka Umunna said increasing transparency was the key to addressing high salaries.

His comments echoed those of Labour leader Ed Miliband who has challenged David Cameron to match Labour's pledges on the issue.

The coalition is expected to announce its policies on executive pay later this weekend.

In an interview with the Guardian, Mr Miliband said: "If one of the big battlegrounds of British politics is going to be who is really going to take action on executive pay, I say 'bring it on'. I promise you they are not going to steal a march on us in this area.

"Does anyone really believe that David Cameron came into politics to create a more responsible capitalism? The public are not going to buy it."

Mr Miliband's comments follow criticism that he does not have a credible economic plan.

Labour peer Lord Glasman said the party "show no signs of winning the economic argument" under Mr Miliband, in an interview with the New Statesman earlier this week.

Transparency

Labour's measures to tackle high executive pay include increasing transparency by simplifying remuneration packages.

Companies should also publish a pay ratio between the highest paid executive and the company median average - and the government could publish a league table highlighting the biggest pay gaps.

Accountability could be promoted by putting an obligation on investors and pension fund managers to disclose how they vote on remuneration packages.

Labour also wants a repeat of the bank bonus tax - to increase "fairness".

Mr Umunna said excessive executive pay was "symptomatic" of the "kind of capitalism that has grown up in this country over the last 30 years".

Explaining what he meant by "responsible capitalism" he said: "It's about looking at what we can do to foster better business practices, behaviour, successful business models that tackle unfairness, and the cost of living crisis at home, the problems we're finding domestically, and actually produce more competitiveness for British companies abroad."

"It's about saying the status quo that's existed is no longer serving businesses and people in society."

'Undermines trust'

Labour was not against people being rewarded for taking risks and creating jobs, he explained.

But there was a problem when pay awards appeared to "bear no relation to performance" - a situation that "undermines trust in the whole system", he said.

Labour said it accepted in full the recommendations of the High Pay Commission and urged ministers to do the same.

The commission was set up by pressure group Compass, with backing from the Joseph Rowntree Charitable Trust, to investigate boardroom pay.

Its year-long inquiry found that the pay of top executives at a number of FTSE companies had risen by more than 4,000% on average in the last 30 years - and said the disparity between what top executives and average workers earn has been building for many years.

Deputy Prime Minister Nick Clegg said in December the government would announce new plans to "get tough" on excessive boardroom pay in January and may legislate if necessary.

 

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  • rate this
    +1

    Comment number 227.

    213. david kidd

    Isn't Professional Football perfect socialism where the vast majority of the company's income goes to the workers?

  • rate this
    0

    Comment number 226.

    capitalism makes wealth at the expense of others. there is only so much money in circulation. eg. if the total money in circulation was 10 grand. and there was only 3 people on the planet. now for me to become wealthy i need a higher proportion, if i have 8 grand, that means the remaining 2 have to share the extra 2 grand. for 1 to become rich people have to become poor.

  • rate this
    -4

    Comment number 225.

    We need more well paid leaders of undustry , not winging lefties who dont contribute to the country

  • rate this
    +1

    Comment number 224.

    >Time for a strong real left working class party to rise again.

    There is a left wing party, it's called the Socialist Labour party and they get no support at all. Go and live in France if you want socialism, it won't ever happen in the UK while we are so reliant on foreign investment.

  • rate this
    +2

    Comment number 223.

    I think the Labour Party need to get back their roots, let not forget the party was born out of the working class people, and their talk about capitalism, they should be ashamed of themself.

  • rate this
    +2

    Comment number 222.

    "205.single no kids
    union bashing -demoralized underpaid workforce
    Privatizing the utilities -old people unable to heat homes
    Privatizing the railways -rail travel more expensive than air
    The big bang and dereg. financial institutions - Worldwide economic meltdown."

    Of course if the UK hadn't had a lazy, unionised, militant workforce, none of these things would have been required.

  • rate this
    +1

    Comment number 221.

    What Labour needs is David Milliand as leader and a clear out the old leftie Brownites from the shadow cabinet, taking the Party in Social Democratic direction, as it is Labour are doomed to decline and electoral defeat, can Ed see it, no he is blinded by the drug of power.

  • rate this
    +1

    Comment number 220.

    "205.single no kids"

    I absolutely agree with your points. I voted for Thatcher's first term as she was going to sort things out. The trouble is she went too far and gave 'the market' free reign (Big Bang etc) - that's when I realised I'd made a huge mistake - not that I'd ever vote for a pre-1979 style Labour Party either.

  • rate this
    +3

    Comment number 219.

    Where did we hear about the unacceptable face of Capitalism? I am certain that too was a labour leader. Nothing happened in their rule for 13 years and is it likely now?

    Rich will get richer and poorer will be grinded to the ground as ever. Let us not forget it the rich who govern the country and all this talk of democracy is no more t han a figment of imagination of the poor!

  • rate this
    +1

    Comment number 218.

    188 - "the crisis we now face was caused by bankers (credit crunch) and ALL western economies relying on debt for growth."

    So? Many world economies are doing fine (e.g Australia's)

    A typical "it wasn't Labour's fault" excuse. Like half the class eating donuts & burgers, doing no exercise and then defending how fat they become by pointing at the other fat kids whilst ignoring the slim ones

  • rate this
    +5

    Comment number 217.

    Politicians psychobabble thats all. For the 13 years in governement Labour failed miserably to curb city excesses and indeed Brown encouraged. Anyone remember his speech at the Mansion house as he praised them to the heavens only weeks before they brought the UK to its knees with their cowboy dealings?

  • rate this
    +3

    Comment number 216.

    What's that saying, empty vessels make the most noise. What a bunch of non-entities flapping about like the proverbial............... in a whirlwind.

  • rate this
    +2

    Comment number 215.

    My only concern with this policy is whther the British public are actually nuanced enough to get it......as so many comments here illustrate, we will insist on seeing everything as black vs white, good vs bad.....when in reality most of life is more complicated than that, consisting of various shades of grey......

  • rate this
    +6

    Comment number 214.

    Surely the best option to tackle the pay gap would be to reduce top level pay significantly and increase normal workers pay across the board with the difference thus both closing the pay gap and reducing the effects of the cost of living this would also mean that the top level pay reduction goes to the benefit of the other workers as opposed to shareholders. Society would also be a happier place.

  • rate this
    +5

    Comment number 213.

    I agree with whoever raised the size of Premiership footballers' salaries. How come Ed and Chukka don't bleat about them? Answer - it might upset the football fans whom Labour see as their natural supporters. Professional football is a truly sleazy a form of capitalism but I bet Red Ed and his mucker Chukka don't get involved in that direction!

  • rate this
    -10

    Comment number 212.

    This is just a joke. If anything we need more capitalism rather than constant bashing of small businesses, higher taxes and greater reform of our public services. The economy isnt growing because the higher taxes we are paying is to subsidise the greater public sector spending. The policies of borrowing to spend have to end.

  • rate this
    +2

    Comment number 211.

    If you still believe a word, of what this corrupt, contemptuous band of betrayers says to us after 13 years of spitting in our faces at every opportunity, frankly you don't deserve the vote. Labour doesn't deserve airtime, they ought to be brought before the crown along with the bankers that they made no attempt whatsoever to regulate.

  • rate this
    -6

    Comment number 210.

    est 400,000 children extra to be moved into child poverty in April Nicks reaction nothing ! executive pay reaction bring it on ! just a hint Nick its called the labour party priorotize please

  • rate this
    +2

    Comment number 209.

    @ 178. magentaobscura:
    Well, you are off topic, and it's in the rules. However, Labour strongly and proportionately criticised that certain MP, whereas others linked to another case are in total denial. This only goes to illustrate how close left and right of centre have moved - I remember the day when to any self respecting lefty "capitalism" was a very dirt word. Not any more.

  • rate this
    +1

    Comment number 208.

    'new capitalism'

 

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