CRONY CAPITALISM CRACKDOWN
Gove’s war on fat cat executives who have ‘rigged the system’ to build huge fortunes
MICHAEL Gove yesterday demanded a crackdown on ‘crony capitalists’ who have ‘rigged the system’.
The Environment Secretary warned the ‘ failure’ of capitalism needed to be addressed urgently so it did not result in just the rich getting richer.
In a speech at the Policy Exchange think-tank, he called for an overhaul of the tax system to encourage investment and a curb on excessive bonuses for fat-cat bosses. Warning of the rise of radical Left-wing movements, he criticised the Bank of England and other central banks over quantitative easing, which he said had simply boosted the fortunes of the wealthy.
Mr Gove said that after Brexit Britain would be able to impose stricter controls on lobbyists to prevent the ‘powerful rigging markets in their favour’. He condemned ‘bosses who earn a fortune but don’t look after their staff, international companies that treat tax laws as an optional extra, directors who take out massive dividends while knowing the company pension is about to go bust’.
In his own department, Mr Gove said he had warned ‘the water companies they must change or change will come to them’.
Earlier this week, a study revealed that £58million has flowed into the pockets of nine water firms’ bosses in five years. Liv Garfield, 42, boss of Severn Trent Water, was the highest paid in the sector last year, earning £2.5million. She has raked in around £7million since 2014.
Mr Gove said that since the global crash of 2008, ‘the outlook has grown darker for most’, particularly the young and those with low skills.
He added: ‘Economic power has been concentrated in the hands of a few and crony capitalists have rigged the system in their favour and against the rest of us.
‘Over recent decades, debt has fuelled growth in an unsustainable fashion – indeed, growth has been built not just on irresponsible levels of borrowing but an unsustainable approach towards natural resources.
‘Our politics, culture and regulatory models have worked against innovation, have been pushed in that direction by powerful incumbents.
‘Many of our fellow citizens, especially those without the qualifications and connections to work the system, have seen less and less value placed on their work and themselves.’
He warned: ‘It is imperative we address that failure honestly and unsparingly, determined to identify where and how we have gone wrong.
‘Unless we rescue and reinvigorate capitalism, we will find the engine which has generated so much of mankind’s progress either stalls or moves into reverse.’
Mr Gove said such trends had fuelled the rise of Left-wing movements in Europe, including Labour in Britain which he argued was now more in tune with radical parties such as Syriza in Greece and Podemos in Spain than ‘the movement of Attlee, Wilson, Callaghan and Brown’.
‘Wage growth has stagnated and expectations of future security have eroded as occupational pension schemes have been plundered or dissipated in value,’ the Environment Secretary added.
‘These trends have gone hand in hand with an increased concentration of wealth and power in the hands of the already wealthy and powerful. Deliberate policy decisions have rewarded those who are already rich.
‘These political currents pose a particular danger for the free market system. The current failure of capitalism to deliver prosperity and opportunity – as it has, can and should – has fed the revival of ideological movements which threatened, indeed harmed, free markets and human flourishing in the past.’
However, Mr Gove warned that the ‘daring’ thinking needed to challenge received wisdom was being inhibited by the prevailing culture.
‘The culture of our times does not welcome dissent and challenge as it should,’ he said, citing the example of speakers being denied platforms at universities.
‘Original thinking is scrutinised for political acceptability and, if it is deemed to fall outside prescribed boundaries, the author is attacked.
‘The human spirit cannot soar when these traps and shackles are deployed so energetically to limit freedom of thought and speech.’
‘Treat tax laws as an optional extra’