The Best of Old Labour Should Now Be New Labour

Please read this excellent post by Tom Powdrill at Capital & Labour on his holiday review and modern day comments of the book "Economic Priorities for a Labour Government" by Roy Hattersley, which was published in 1987.

Compare our present economic model to what Roy was recommending.

No wonder countries which have greater equality and industrial democracy such as Germany, Norway, Finland and Sweden have more successful economies than us.

It appears to me at least that the Labour Party under Ed Miliband must continue its journey to re-balance British politics and economics away from the view that unfettered neo-liberalism is best.

Those of  us who genuinely believe in a mixed economy ought to shouting out loud that "the emperor has no clothes".

Sticking two fingers up over executive pay

Tom (as usual) making some good points about controlling Executive pay.  Picture of a City Banker taunting NHS doctors and nurses with a £10 note as they passed Deutsche Bank

while on a demonstration earlier this year.

"...One of the great achievements on the New Right was atomisation, so people at work think more in individual terms, and less in a collective sense. I don't mean this in any kind of conspiratorial sense - people on the Right believe this is how people should think - but it's an achievement they don't want to lose.....

There is some ground opening up here for Labour as many in the party would be actively enthusiastic about employee involvement in (remuneration committees), so this could become a bit of a wedge issue, at least in my little corner of the world. Although asset managers and the investor representative bodies won't like it, there is definite interest in the idea that is starting to bubble up.

More generally there is also a sense that patience is running out. There are only so many times you can call on the executive class to exercise restraint and they stick two fingers up. There are only so many times you can urge asset managers to take a tougher line and they shrug their shoulder and say there's nothing much they can do about it. Of course we've been through all this before, and nothing has changed, so therefore shouldn't we just expect it to carry on? Well, maybe, but it was a former FTSE chief exec who said in a conversation recently that the position of executives taking ever more out of companies as their reward was analogous to the position of the unions in the 70s. People moaned for a long time about TU power before anything happened, but when change came it was very significant.

I now think that we could see some fairly radical reform in respect of executive pay, whether it happens under the Coalition or the next Labour govt in 2015 ;-) I suspect it will go significantly further than the policy positions adopted by most of the 'professional' governance bodies because most of them are still stuck parroting the disclosure+shareholder empowerment model (which hasn't worked very well). There has been an opportunity since the crisis to think very differently, our sector hasn't really done that. Don't be surprised if what we thought were the ground rules of the exec pay debate get overtaken by events".   

Check out full post here on Labour and Capital here

Corporate Governance and Responsible Investment Awards 2010

On Thursday evening I went to this inaugural event at the Globe theatre sponsored by PIRC and US “class action” lawyers Robbins Geller Rudman & Dowd LLP.

Pictured is one of the judges – the bearded blogging governance guru, Tom P, of Labour and Capital and the winner of the Corporate Governance Journalism Award, Kate Burgess, of the Financial Times.

The winner of the Responsible Investment Journalism Award was Hugh Wheelan of (you would never guess) “Responsible investor”. You can see here the articles he wrote that resulted in this prize. I’ll try and find links to Kate’s articles.

It was a very pleasant and well organised event but when you think that our entire economy very nearly went down the pan due to the completely rubbish governance of our financial institutions and that our present government thinks that the best way to deal with the consequences is to gleefully slash and burn everything. Then these awards are actually really important and we want to encourage and need more journos to write on responsible investment and governance.

I assume that both of the winning journalists have covered their fair share of award ceremonies in the past? So it was good to see that they were as embarrassed and secretly pleased as everyone else who gets awards in this way.

PS – with elections etc I’ve been side tracked on Capital Stewardship issues but hope to get back on board in the autumn. This is such an important issue (IMO).

“Stinking Dung Hill, Utter Bollex, Bogus, Dishonest, Stream of Rubbish, Vindictive Gits” - Torygraph lies over Pensions.

The normally mild mannered blogger, Tom P, at Capital and Labour tells us as it is! Tom tears to pieces this ignorant Torygraph bile from today’s editorial.

Pensions can be easily portrayed as pretty boring but are actually desperately important to everyone but the very rich. Why on earth does the mouthpiece of the supposedly non-tabloid and “educated” Tory press want public servants to join the national race to the gutter over pension provision?

The local Government Pension scheme was actually brought into existence in the 1920’s by early Town Hall trade unionists many of whom were committed (even in my beloved Labour West Ham!) Conservative Party activists.

Surely we should be driving standards up for everyone? My public sector pension actually costs my employer far less than its personal pension stakeholder.

What kick do this new generation of Tories get out of the prospect of misery and poverty for the many in old age?

Red Rose-tinted Glasses and the Pension Protection Fund

Another excellent post by ex-TUC pensions expert, Tom P, in his “Labour and Capital” blog. Tom has a dig at the Tory dominated Financial press who constantly attack the government for “interfering” in their industry. If they were just left alone everything would just be sweetness and light. Yeah.

It beggars belief that anyone in the British Financial services industry think that they can rest on their laurels and be trusted to be left alone? Time and time again, the industry has proved itself incapable of self-regulation and driven by short term self interest. I’m not just sticking the boot in over present day difficulties over the US sub-prime mortgages and Northern Rock. In my life time, there has been a constant drip-drip of financial crisis’s and scandals by so-called “respected” Financial institutions. Do I really need to list them all?

Tom contrasts the collective failure of the industry to do anything about companies that go bust and break their pension promise, with the success of the Pension Protection Fund (PPF) set up by the government. Which within only 3 years of its existence is already protecting 41 schemes and over 12000 pensioners, paying out £1.4 per month? A further 225 schemes and 118,000 members are being assessed for help.

The hypocrisy gets even worse. Many of those who failed to do anything about this problem before the government stepped in, then incredibly began to complain about the failure to protect those who schemes failed before the PPF was set up. Tom points out that the government once again responded by introducing the financial assistance scheme. A bit late admittedly and much chivvied on the way, but better late than never.

Tom concludes that "If I take my red rose-tinted specs off I can see that Labour's record on pensions is not without blemishes. However on the specific issue of protecting pensions where employers have become insolvent it has a very good story to tell.

Tom, put your specs back on mate, they are not “rose-tinted” in the slightest. This government with pensions at least, is doing what it says on the side of the tin. A true left of centre progressive government that is prepared to actively intervene into the market to protect ordinary people. Not only vulnerable pensioners whose schemes have gone bust but to also vigorously regulate schemes to ensure that they remain solvent in the future.

A government that recognises that most personal pension plans only benefit the financial industry and the rich, have intervened again to provide State run quasi-compulsory, Personal Pension Accounts.

Most importantly, the government has also intervened via pension credit and fuel payments etc to (dare I say "redistribute"?) pour money into the pockets of the poorest British pensioners.

They have done this without scaring the horses. In private at least, I am sure that the more intelligent City folk realise that there are limits to what “free for all” capitalism can achieve and that there is a positive role for the state. However many simply do not have the intellectual honesty to admit it.

Time to Say Goodbye to Tory Fund Managers Fidelity?

Or is it belated good riddance to bad rubbish? Tom P of Capital & Labour (and his Mrs) has finally had enough of active Conservative Party supporters,Fidelity Investment. Fidelity has donated £435, 500 (£115,000 in 2007 alone) to the Tories in recent years without disclosing the information to their investors.

Tom and his family have had a long term saving plan with Fidelity for many years. Once they found out that the company was giving the Tories huge amounts of money they were very concerned. They tried to contact Fidelity about their over why Fidelity were giving this money to the Tories but felt they were “fobbed off”. So they are leaving Fidelity.

Personally, I think anyone who does not support the Conservative Party should think about doing something similar. This includes pension fund trustees. I’ll hopefully be posting further on this in the near future.

Pic & video of top artists Sarah Brightman and Andrea Bocelli (not Tom & Mrs!)