CBI chief spikes Byers' guns by taking pounds 500,000 pay cut
Monday 01 November 1999
The disclosure by Sir Clive on the eve of the CBI's annual conference in Birmingham is likely to pre-empt a renewed attack on boardroom pay levels by Stephen Byers, the Secretary of State for Trade and Industry.
Mr Byers will warn CBI delegates that a survey last week showing executive remuneration rising at six times the underlying rate of inflation showed in the "starkest possible way" that boardroom pay remained excessive. Sir Clive spiked Mr Byers' guns by insisting he was practising what the Government preaches and linking his pay to performance.
He will take an "involuntary" one-third reduction in pay this year from pounds 1.5m to pounds 1m to reflect Rentokil Initial's failure to meet its 20 per cent profit growth target. Earnings this year will only rise by half that amount, meaning Sir Clive earns no bonus.
The disclosure came as Sir Clive launched a savage attack on ministers over their "rip-off" Britain campaign, warning it could give business "a severe dose of influenza" and result in increased unemployment.
Sir Clive will tell delegates today in his opening address that industry is getting the "Jonah Lomu treatment" from Tony Blair - first shimmying to gain support from business and then getting "bashed for `rip-off Britain'. "They say our prices are too high. What about the costs of rents, rates, pensions, people, the inadequacy of roads, the cost of fuel, the restrictions on buildings, the high level of the pound and the increasing costs of regulation and business taxes.
"Too hot towards the consumer and too cold towards business produces declining and unprofitable companies," Sir Clive will say. "It will lead to our markets being progressively dominated by overseas firms, creating high unemployment on our doorstep."
Sir Clive's remarks indicate increased friction between the Government and the business community - something which Mr Blair will be keen to redress when he becomes the first serving Prime Minister to address a CBI national conference. In addition to Mr Blair, who speaks tomorrow, the CBI will play host to William Hague and Charles Kennedy.
Meanwhile the CBI urged the Chancellor Gordon Brown, who also addresses the conference today, not to use his rumoured pounds 10bn war chest to cut personal taxes or increase public spending in the next Budget. In its recommendations ahead of the pre-Budget report next week, the CBI warns that either course would exacerbate the problems of Britain's "two-speed economy" by increasing pressure for interest rate rises and further damaging manufacturing exports.
Adair Turner, director general of the CBI, urged the Chancellor to ignore the "siren voices" calling on the Government to let rip. "The last thing that should now happen is a short-term addition to consumer demand through a significant boost in public spending or consumer tax cuts. So it is vital that the Chancellor keeps a tight hold of the reins in his pre-budget report."
In his speech to the CBI, the Chancellor will reveal that his report will contain measures to help entrepreneurs through a package of reforms to the capital and products markets.
His will use the address to outline his agenda for the second half of the Parliament to create an "enterprise culture open to all".
"We must go beyond where we reached in the Eighties and we must give the many and not just the few the opportunity to turn an idea into a profitable business, to start firms and create jobs," he will say.
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