August 31 2014 Latest news:
Shaun Lowthorpe, Business editor
Saturday, February 11, 2012
The debate over Britain’s bonus culture continued to rage this week as Royal Bank of Scotland boss Stephen Hester went public over his decision to waive his £1m bonus
@jamestinman the REAL business growth over next 15yrs in UK will be via Innovation - and that won’t come from the CEO merry-go-round
@kenhurst We incentivise sales people wi bonuses once they’ve hit some pretty ambitious basic targets but not ‘vocational’ staff who luv jobs anyway
@janechittenden I don’t think it is anti-business. Rather, we’re seeing more demand for ethical business practice and fair pay packages.
@richardhowitt I say:”Reward people fairly for their contribution to the real economy- no double standards between people at top & bottom.”
But as the political war of words continues there have been murmourings that efforts by ministers such as business secretary Vince Cable looking at tackling executive excess in the boardroom, some within the business community have started to wonder if we are in danger of creating an anti-business culture in this country which could drive talent overseas.
But with many believing that such talent, particularly in the banking sector, helped to bring the economy to its knees in the first place, it is difficult to gauge if the fears are genuine or the last squeals of the defenders of the status quo.
Chancellor George Osborne this week vowed to fight an “anti-business culture” in the UK, warning that the row over bonuses and pay threatens to undermine the jobs and prosperity.
In a speech to the Federation of Small Businesses to defend the principle of “rewards for success”.
“Let me say something about the row over bonuses and pay,” said the Chancellor. “Of course we need to reform our banking system - and nobody has done more than this Government to address the too-big-to-fail problem that so offends every taxpayer.
“Of course rewards for failure are unacceptable - and those who believe in the free market are the first to say so. But a strong, free market economy must be built on rewards for success.
“There are those who are trying to create an anti-business culture in Britain - and we have to stop them. At stake are not pay packages for a few but jobs and prosperity for the many.”
With the debate continuing to rage over the bonus issue, Royal Bank of Scotland chief executive Stephen Hester broke his silence this week over his decision to give up a bonus of almost £1m in shares.
And the issue flared again on Friday as Barclays was accused of ignoring anger over bonuses and running “business as usual” as it revealed a £1.5bn pot for investment bankers.
The bank said the average bonus for staff at Barclays Capital was cut by 30pc to £64,000 in 2011 while the group’s total bonus pool was down 25pc at £2.2bn.
But chief executive Bob Diamond refused to be drawn on questions about his own bonus, amid reports he could be in line to receive a £3m payout.
Meanwhile Labour leader Ed Miliband accused the Government of defending the interests of the “irresponsible few” in the row over City bonuses, and dismissing suggestions he was “anti-business” for tackling excessive pay, insisting he was standing up for the wider economy.
“George Osborne says that action to tackle big bonuses is ‘anti-business’. It is not,” Mr Miliband said in a speech at Sheffield University. “It is pro-business to demand responsibility at the top and an end to the something-for-nothing culture which has damaged our economy in the financial crisis at every level, wrecked businesses and left everyone else squeezed.
“By defending an unreformed bonus culture, this Government confuses the interests of the economy as a whole with the interests of an irresponsible few.
“Across the economy we need executives to recognise that exceptional rewards should only be for exceptional performance.
“Tackling excessive executive pay and bonuses is not an end in itself but a necessary first step towards a bigger change in our economy in which people get fair rewards for their contribution at every level of society.”
Norfolk entrepreneur Stephen Pitkethly will be realising his father-in-law’s dream when he launches an innovative craft at the Southampton Boat Show next month.