BT rings the right note

Bt IS showing how capitalism can work better for all stakeholders, at a moment when private property rights and free markets are threatened by shadow business secretary rebecca Long-Bailey.

Chief executive Philip Jansen is offering the group’s workforce of 100,000 a payout of £500 in shares a year, which will vest after 36 months.

the proposal provides a riposte to the Labour plan, later modified, to grab a 10pc stake in every UK company with a workforce of more than 250 people.

Jansen, who took up the role in February, did something similar when he was chief executive of Britain’s financial technology champion Worldpay, and recognises the value of giving workers a stake.

It demonstrates that public utilities, such as the National Grid, do not have to be taken into public ownership to give workers an interest in the future.

At Bt, employees already have a big claim on the company’s success, as members of the FtSe 100’s largest pension fund, which currently has a deficit of £5bn.

Bt is not the only firm engaging employees through share ownership. royal Mail staff were awarded 10pc at privatisation in 2013. earlier this week, engineer Weir Group pledged that everyone in its 15,000 workforce would get £600 in shares as a gift. richer Sounds went a step further when founder Julian richer effectively handed a 60pc stake in the musical systems retailer to employees.

Labour’s Long-Bailey, who has a background as a commercial solicitor, argues that nationalising the energy sector will not be that harmful to UK pension funds and investors, since there are so many overseas funds on the share register.

But many overseas asset managers, such as Blackrock, look after cash for retirees in Britain. Confiscation would hurt the very workers Labour is trying to help. It is worth remembering that when the Blair government took railtrack into public ownership in 2001, UK and international investors rejected the low-ball offer. the Government had to dig deep for compensation. this was money which could have been better spent on rail networks.

It is early days for Jansen and, like his predecessors, he may find the treacle layers of bureaucracy slows his ambition. In wanting to frame Bt as an infrastructure champion, by speeding up the rollout of fibre- optic cable, he has set it on the right course.

Bt’s heavy investment in sports broadcasting has paid off, thanks to the performance of english teams in europe. But spending on sport was a marketing gimmick which distracted Bt from its core function of delivering ultra-fast broadband to every part of the country.

Fan club

PHeW. After hard work and arm twisting, Metro Bank secured the backing for a £350m placing of shares designed to prop up confidence and capital.

the error of Metro was to announce it would be issuing new capital without a price or plan, giving short-sellers a field day.

that led to the run on deposits between May 10 and 13 it blamed on ‘intense press speculation’, which is a disingenuous. Metro brought the calamity on itself by its misreporting of loans, which was only disclosed after regulators intervened.

the macro-economic problems referred to in the prospectus are common to the whole financial sector. It is no secret that it is harder for banks to make money in a low interest rate environment. the claim that Metro continues to attract new ‘fans’ during this disruptive interlude is a bit far-fetched.

to the credit of founder-chairman Vernon Hill, he is putting his money where his mouth is by subscribing to £5m worth of the new shares. One imagines without that, and the commitments made by other board members, it would have been harder to persuade underwriters and investors such as Bloomberg, many of them loyal Hill followers, to take part. Hill and chief executive Craig Donaldson have made pledges and will have to see the process through. But if confidence in the bank’s governance is to be restored, a shake-up at the top is inevitable.

Undone deal

NON-Standard Finance’s 53.53pc ‘victory’ in the fight to take control of Provident Financial could yet be compromised.

Broker Goodbody is unimpressed and says ‘there is a steep hill to climb’. the broker reminds investors ‘regulatory approvals are not certain yet’. too early to crack open the Special Brew.