Vince Cable came to the Commons with the answer to a question that's been troubling him for more than 100 years. It's why he looks as he does.
Lord Keynes noted the "agency problem" in shareholder capitalism. Partners running a company behave carefully because they stand to lose everything they own. But managers have a different incentive. They can't lose everything; but they can loot the company, leaving as little as possible for the absentee owners – or shareholders – as will keep them interested in holding the shares.
So, hurray for Vince and indeed for Labour. This "shareholder spring" where the baronial arrogance of chief executives has been, to some extent, chastened grew out of Labour's reforms early last decade.
And what arrogance it has been. As Chuka Umunna noted – the FTSE went up 80 per cent and executive pay went up 180 per cent. Greg Mulholland told us of a CEO awarding himself an £850,000 performance bonus while the value of his company fell by 80 per cent.
Looters aren't to be shot, yet. The solution, if it is a solution, is not to legislate for pay ratios between the highest and lowest earners in a firm, nor to impose limits via a high-pay commission. Amazingly, Chuka and Vince speak with one voice. They both seem to be in favour of property rights, and neither seem to agree with Barry Sheerman's characterisation of those Captains Valiant of capitalism, the private equity partnerships, as "vermin".
This amiable unanimity – blessed by the veteran Blairite Dennis Skinner – may be tested in the medium term. When the Liberal Democrats take Peter Bone's advice and leave the Tories to a minority government – these two Business and Skills ministers will be competing for the same piece of political real estate in a Coalition. Unless, of course, both of them are by then leading their parties.Reuse content