The message is loud and clear - people do want fat cats stopped
No press,” said the PR barring my way. That’s the first time I’ve been turned away from a company AGM, but why am I not surprised? This is Melrose, the great predator that ate up GKN in an £8bn hostile takeover – financial engineers swallowing up Britain’s third-largest actual engineering company – before carving it up and selling it off. I go to company AGMs to stare at masters of the universe paying themselves eye-watering, breathtaking sums. In the one day a year on which they are on public display, I seek a glimmer of shame, any blush or blench. But when some eccentric shareholder questions the size of their swag these masters never bat an eyelid, unabashed in their brazen effrontery. Will the day ever come when Britain looks back in incredulity at such shameless fatcats?
I wanted to eyeball Christopher Miller, the executive chairman, who will receive a bonus of more than £40m, along with three henchmen on similar rates. Pensions & Investment Research Consultants, an independent watchdog against bad governance, had warned shareholders to oppose Miller’s bonus. I wasn’t there to watch the vote, but a Melrose press release popped up announcing the board’s remuneration was agreed, with no word of the mini-revolt by 22% of shareholders. Similar ripples of shareholder protest against megaremuneration greeted last week’s AGMs at Serco, Rathbones and Direct Line – but all were shrugged off. Odds are that planned objections next week to Shell’s €9m (£7.9m) for a CEO whose company share prices fell this year will fizzle out too. For the victors, why let one day’s mild embarrassment spoil their plunder? Besides, someone else is always greedier: look at Persimmon’s chief executive, taking £75m despite an outcry.
FTSE 100 CEOs pay themselves more than 120 times as much as an average UK worker – a gap that has widened by two-thirds in the past 20 years, says Luke Hildyard of the High Pay Centre. This week the Sunday Times
Rich List revealed their wealth rose by 10% last year.
How unruffled they will be by last weekend’s TUC rally demanding a “new deal” on pay. A decade on from the financial crisis, real wages are still worth £24 a week less than in 2008, and are not expected to return to pre-crash levels until 2025, an unprecedented 17-year decline. The TUC general secretary Frances O’Grady’s rousing speech protested against “bumper dividends” while wages are cut. “You can’t fill your boots in the boardroom and tell workers to
tighten their belts. The greed has to stop.” But there is no sign of that. You will look in vain for any remotely revolutionary impulse – beyond the Brexit convulsion orchestrated by Tory multimillionaires and their press – including that voice of the people, the Daily Mail’s Paul Dacre, with his Scottish deer-stalking estate and Sussex cattle farm.
The strategy consultancy Britain Thinks has just taken the pulse of public attitudes towards business, and warns of a reputational problem: most people are disgusted by obscene executive pay, by the billions avoided in tax, and by bad treatment of employees on zero-hours contracts and abysmal pay. Big business is viewed as ruthlessly cut-throat.
Politically, all this should benefit Labour, with the public mood in tune with its manifesto policies. When tested blind, those policies are highly popular – 61% are in favour of a £10 an hour minimum wage, with sizeable majorities for stronger worker rights and tax rises for the top 5% (those earning over £70,000). Renationalising water, rail and postal services are popular too.
But here’s the catch: when told that all these are Labour policies, people back off sharply. How will they pay for it and will Labour rock the boat? Preconceptions about Labour’s incompetence at running the economy outweigh their disgust with big business. People still say (yes, outrageously) that the Tories rescued the economy from Labour mismanagement. Despite revulsion at executive avarice, only 39% back the 20:1 maximum pay ratio Labour advocates, and only a meagre 26% support raising corporation tax from its present much-reduced 19% back up to 26%.
They warm to Labour as the nice party, “fair” and “genuine” – while they see Tories as elitists “out for themselves” and for the rich. But they think those Tory nasty qualities are needed to support business, on which the economy depends: after all, four out of five voters are employed by the private sector. All in all, those surveyed give the Tories a 9% lead as the best party to run the economy (and therefore the country) – a trend found in poll after poll.
That’s what Labour has to overcome, as ever against a hostile media tide. Remember how hard Tony Blair and Gordon Brown struggled to convince voters, locking themselves into a deadly two-year public spending freeze, glued to Tory spending plans, vowing eternal fiscal prudence. But even then, they only managed to neutralise Labour’s permanently negative economic reputation thanks to John Major’s exchange rate mechanism fiasco.
Our corrupt political system helps business to buy elections to protect their loot: of the 50 richest UK political donors, only one gives to Labour. The shadow chancellor, John McDonnell, is on a business charm offensive, the same “prawn cocktail” circuit chased by Tony Blair and Gordon Brown pre-1997, but he can never realistically expect to sway these arch Tories.
Nor does that matter much. It’s ordinary voters who need persuading.
Abusing plutocrats is political fun. Jon Trickett, the shadow Cabinet Office minister, was venting at them last week: “Labour will overturn the rigged economy and bring to a shuddering halt the obscene power of the few thousand-strong super-elite.” Good, say I! Class war! riposted the Mail. But when Trickett averred, “People have had enough of the elite pinching wealth from the pockets of working people,” the trouble is that they haven’t really, or not enough of them. There’s no better time to contemplate Britain’s non-revolutionary instincts than observing this Saturday’s royal wedding gush. That’s a sharp reminder that 80% of people don’t think (as I do) that the monarchy symbolises and sanctifies Trickett’s “warped system in which a superrich elite runs rings round everyone else”.
The Britain Thinks focus groups finds that Labour is struggling to capitalise on what is genuine public indignation at corporate greed. Language matters
– and Labour hasn’t yet found the right words to convince voters it can run an economy that is both competent and fair.