Labour plans 'fat cats' act

Labour has proposed a new corporate governance act to tackle the problem of excessive pay in the boardroom in preference to using regulators to interfere directly in utility pay.

Announcing plans for reform of utility regulation, Dr Jack Cunningham, the shadow trade and industry secretary, also revealed that he is to meet Sir Richard Greenbury, chairman and chief executive of Marks and Spencer, this week to propose new measures to prevent abuses "on salary hikes and share option packages which are completely unrelated to individual or corporate performance".

Sir Richard chairs the committee on top pay which is due to announce plans for greater disclosure of board-level earnings and a clearer link between executive pay and performance.

At the meeting, Dr Cunningham is expected to urge the toughest possible measures to ban boardroom pay increases unrelated to performance. Labour sees the Greenbury recommendations, if they come up to scratch, as a possible benchmark for good practice in any new legislation.

Tony Blair, the Labour leader, called for an end to the "unseemly racket" of price rises by the privatised utilities in angry clashes with the Prime Minister in the Commons.

Mr Blair staked out the privatised utilities as one of the main battlegrounds for the General Election campaign.Hesought to make his party the defender of the consumers' interests. He condemned the latest "pay-and-perks scandal" over the disclosure that three board members of the National Grid had cashed in £600,000 worth of options on shares not yet available to the public.

"These utilities have degenerated into an unseemly racket and the sooner you order a thorough overhaul of their system of regulation the better," Mr Blair said.

Mr Major, the Prime Minister, has promised legislation to back the recommendations of the Greenbury Committee, but this is expected to be much less comprehensive than the new act Labour is examining.

Some of the Greenbury recommendations are likely to be incorporated in the Stock Exchange rule book and a new version of the Cadbury rules on corporate governance.

The core of Labour's utility reform plan is to make shareholders in privatised utilities share "excess" profits with customers - including what Dr Cunningham called a consumer dividend.

In a speech to a London conference organised by the left-of-centre Institute of Public Policy Research and Unison, the public sector workers' trade union, Dr Cunningham said this would work automatically to curb the excess profits from which the salary and share option bonanzas of utility directors have been generated. But he made no mention of using the regulators to curb pay directly.

Qualified backing for change came from Clare Spottiswoode, the gas regulator, who told the conference that she was looking at possible reform of the price-setting formula and the introduction of profit sharing. She promised a consultative paper in the next month.

Opening the conference, Mr Blair said the present system for regulating gas, water, electricity and the other privatised utilities was not working and a new approach was required.

Dr Cunningham also said that Labour wanted to link automatic price cuts to high profits without destroying incentives towards efficiency.

News
Alan Bennett has criticised the “repellent” reality shows which dominate our screens
tvBut he does like Stewart Lee
Life and Style
The Google Doodle celebrating the start of the first day of autumn, 2014.
tech
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Sport
David Moyes and Louis van Gaal
football
PROMOTED VIDEO
News
i100
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
News
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Life and Style
food + drink
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
News
A cabin crew member photographed the devastation after one flight
news
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits