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.


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

    Comment number 627.

    573. zipperty
    >>>Communism is in principle good but power mad greedy + selfish people make it bad. Capitalism is in principle bad but power mad greedy + selfish people make it worse.

    Why does it have to be either or? There IS a middle way. Our current problems stem from the fact we strayed too far towards unbridled capitalism.

  • rate this

    Comment number 626.

    The bosses are parasites sucking the honest worker dry. They want you to believe there is no alternative to capitalism and that it will work one day, a better version is on the way they say. They have had their time. Do not let them try to shock you into submission - workers of the BBC must rise up.

  • rate this

    Comment number 625.

    Assynt 613

    "the banks didn't peddle their sub standard wares onto an unsuspecting public - they sold them to each other."

    In order to sell substandard wares to each other they had first to create them by selling them to us.

    Viz. American Sub Prime and Northern Rock 125% mortgages

    & should we have been unsuspecting?

    If it looks too good to be true, it is - and was

    We are as greedy as the rest

  • rate this

    Comment number 624.

    'Inconsequentially rich' UK plc Chair

    1 For short-term profit - inedible arms for export - people starve & die

    2 Long-term profit - tobacco for addicts - people starve & die younger

    3 'Lose' disabled & less-able - creating 'under-class', exclusion, crime

    4 'Keep' an unemployment 'pool' - of 'people', families devastated

    UNAWARE… fine house, happy family, etc
    Like MPs

  • rate this

    Comment number 623.

    This is like the Captain of the Titanic calling for 'better icebergs'. Capitalism is in crisis and the options to improve it appear to have evaporated. Perhaps Labour supporters need to look elsewhere for an alternative?

  • rate this

    Comment number 622.

    Mr Umunna - Labour in power for 13 painful years and you've only just thought of this ?
    What the hell were you doing the rest of the time ?

    Answers on the back of a postage stamp please..

  • rate this

    Comment number 621.

    This was never a Tony Blair "New Labour" idea. So are we now seeing a new New Labour, or rehashing the ideas of the "Old Labour" under people like Wilson, who had the top rate of "unearned income" tax at 98%. Wilson still had to devalue the currency, before the bailiffs came in (look up the "gnomes of Zurich") who took over the economy,much as has happened lately in Greece and Italy.

  • rate this

    Comment number 620.

    Appears like more bureaucracy. There is already too much red tape loaded onto businesses. What we need are real and effective solutions. Instead politicians of all creeds spend so much of their time on point scoring because they have no meaningful ideas on how to address the problems. Too few of them have business experience but think they know better than those that do.

  • rate this

    Comment number 619.

    615. mocker

    That is correct, although, what you have to add to that is thus: it all came about by the deregulation of markets by those that the likes of you and I voted in that lead to the explosion of derivatives which created the crash of 2008.

    Reducing "excessive pay" is one thing, but dealing with the root problem is something entirely different. I wouldn't hold my breath for a fix mind.

  • rate this

    Comment number 618.

    The privatised train service embodies and reflects the free market principles of good service at keen prices.

    Mike Gove's Free Schools initiative is sufficiently free of substance to allow swift implementation. Impressive.

    Mr Lansley is responsible for the governance of the NHS and the interests of his private sponsors.His ability to manage this potential conflict of interests is evident

  • rate this

    Comment number 617.

    If the bosses pay gets cut everyone elses will be. Labour, Tory and Liberals have all had their chance to make Capitalism more 'responsible' and they have all failed miserably the only result in making working people work and pay more and the rich less.
    Capitalism doesn't care and the politicians care less, there is no such thing as fair in this system as long as GREED rules.

  • rate this

    Comment number 616.

    What struggling cities?
    Edinburgh and Glasgow are doing excellent thank you, Aberdeen is booming, and I spent a great week-end in Perth recently.
    SPL Inverness and Ross County are doing alright.

    You hint at Scottishness,.........on your great, great, great, grannies side no doubt.
    When was the last time you were in these fine bustling cities and don't decry Paisley (as if a Scot would)

  • rate this

    Comment number 615.

    Re 212
    "constant bashing of small businesses,"

    Just a thought. I think you'll find that the crisis/collapse in the global banking sector which led us to the present economic difficulties,was in the main brought about by some highly questionable financial practices in LARGE businesses run by highly paid execs.

    Tighter monitoring of same is long overdue!

  • rate this

    Comment number 614.

    Corporate greed and a lack of accoutability was a major contributing factor to the economic mess the world is in. It is right and proper that all our political parties make progress in this area. I hope that Labour move away from New Labour and put clear distance between their policy and the so far fairly silent Torylition policy in this area.

  • rate this

    Comment number 613.

    That's the funniest part of it though (albeit a pretty sick joke) - the banks didn't peddle their sub standard wares onto an unsuspecting public - they sold them to each other. It was Labour who peddled the cost onto that the taxpayer by electing that we should pick up the bill!

  • rate this

    Comment number 612.

    @609 gavin feedback

    captalism is greed. there isnt a diffrence.

  • rate this

    Comment number 611.

    Labour are supposed to be the party for the people, for us, not there only for the benefit of the mega rich. like the ConDems.

    Labour should be looking for a "responsible and better" socialism, not another form of the very same capitalism that has/is failing so far.

    Another vision or way forward is needed; what we have now clearly doesn't work - there is less and less money to go round.

  • rate this

    Comment number 610.

    How is this even news worthy? Labour talking about a wishy washy idea, just complaining but got no real policies. If it was the Conservative or the Lib Dems who said this in opposition then I doubt any media outlet would bother reporting on it. They is nothing to it accepting stating the obvious.

  • rate this

    Comment number 609.

    It is not capitalism that is at fault - it is GREED!
    Reducing costs is a valid business strategy, but executive remuneration must be included not excluded from such a strategy. Make investors pay a "greed" tax on dividends in companies with excessive executive pay. If dividends are hit hard the big investors will react, which they do not at present. It is the big investors who wield the power.

  • rate this

    Comment number 608.

    The idea of reducing the chairman's remuneration and giving it to the staff sounds good in theory. But take a large conglomeration with say 100,000 staff. Knock a million off the chairman, he may not notice much difference. I'm not sure the staff on an extra £10 a year will either.


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