Business does need more scrutiny
JUNE 8 will be a landmark date. Britain goes to the polls and Fred Goodwin will be in court. But there is more than a coincidence of timing that links these two events. They are linked by the financial crisis, the collapse of public trust in business and the inevitable political reaction it has finally brought.
For the last eight years Britain has lived in the long shadow of that crisis and its lingering effects can be seen, not just in the court case over Royal Bank of Scotland or in the final exit of the UK Government from its shareholding in Lloyds Banking Group last week. It can also be seen in the Brexit result and in the manifestos of the two main parties for the General Election.
The crisis put not only banking under a critical spotlight, but also the wider business world. Businesses of all kinds have been under attack, sometimes, but not always, justifiably so. Pension disasters, tax avoidance and skyhigh boardroom pay are just some of issues that have fuelled public and political fury.
The Labour manifesto is perhaps the inevitable far-Left attempt to cash in on this, but the Conservative manifesto – the only one which stands a chance of becoming government policy – is also a clear response to that collapse in public trust in business.
Business has squealed, even about the Tory proposals – too much regulation, too much interference. They are wrong to do so. As a document it is lacking in detail, but the direction of travel is clear – and correct.
Proposals such as strict annual shareholder votes on executive pay and a clampdown on share buy-backs (which can be used to artificially boost earnings figures) both address issues which have alarmed many in the City in recent years.
Greater scrutiny of takeovers to ensure British business is not asset-stripped by global corporations and powers for the Pensions Regulator to block deals that might leave staff with poorer retirements are to be welcomed. Scrutiny of business need not mean an attack on business. The energy groups have long claimed that their own costs are rising and that higher home energy bills are unavoidable. Extraordinarily, a clear independent analysis of those costs has never been carried out.
Not everything in the Tory manifesto is to be welcomed (curbing migration will not benefit the economy) and the real test will be in the details of how Theresa May’s next government implements its plans.
The business world has been under attack in the court of public opinion for the last eight years. It does not need punishment, but it does need rehabilitation. For its own good.