Clarke urges pay restraint at top

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Indy Politics
EXCESSIVELY high salaries paid to some senior executives in British companies come under heavy fire today from Kenneth Clarke, the Chancellor.

'I disapprove of some of the high executive salaries paid by British companies and I wish more of our business leaders showed a decent level of restraint,' Mr Clarke declares in an interview with Today newspaper.

'I don't think any politician has the power to intervene and stop people being paid by their companies,' he says.

'But I do think that with the rates of taxation having been reduced, people should think twice before allowing their boards to award these excessively high salaries.

'I believe in rewarding success and effort, but one or two of the levels one sees are excessive,' he said.

Mr Clarke's reference to self-restraint rather than interference by governments was taken last night to be an exercise in damage limitation after John Major's conspicious reluctance to comment on the reported pounds 3m pay-off collected by John Cahill, the outgoing British Aerospace chairman. Mr Major's studied avoidance of two Labour questions on the subject at a recent Prime Minister's questions provoked howls from opposition members and some discomfort on Tory benches.

Disclosures of the severance payment came within days of BAe's sale of Rover to BMW.

Gordon Brown, the shadow Chancellor, said last night: 'If Mr Clarke really believed what he said, he would scrap the tax reliefs on executive share options which have been one of the factors responsible for the excesses that have angered the public.

'As Mr Clarke tries to undo some of the damage he is not prepared to take action. His attitude remains hypocritical.'

The Chancellor's remarks may none the less give food for thought in some boardrooms, including Glaxo, Grand Metropolitan, Hanson, Smith Kline Beecham and Tomkins, where the top earners reportedly receive between pounds 1m and pounds 2m.

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