Letters: Fatcat salaries

Empty pledge to curb fatcat salaries

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The Independent Online

Despite the hype, there is little substance in David Cameron's promise to make shareholders' advisory vote on remuneration reports binding ("RBS chief prepares for huge bonus as Cameron vows to curb excessive pay", 9 January).

The reality is that very few companies lose the existing advisory vote. Since it was implemented in 2002, thousands of reports have been submitted to shareholders. The number voted down is far less than 1 per cent. There is no reason to expect this to change under a binding vote.

Perhaps the most striking aspect to the proposal is the lack of clarity over what might happen should a company lose the vote. Would the remuneration committee chair be voted off the board? Might bonuses already paid have to be reimbursed? Should policy be reviewed and resubmitted to an EGM vote?

Where is a "no" vote or where a high vote against might be anticipated, boards already consult with shareholders, and generally make changes to their pay, precisely what the PM's proposal presumably aims to achieve. Cameron is merely formalising the status quo.

Rightly or wrongly, there is a keen political appetite at the moment to "do something about" executive pay. This latest proposal will change very little.

Jon Dymond

Director, Executive Reward, Hay Group, London SW1

I always thought the Association of British Industries and the National Association of Pension Funds had the power to curb the excessive levels of executive pay and bonuses. The bodies are immensely powerful because they represent the views of the life assurance, fund management and pension fund industries in the UK.

The ABI admits that shareholders have enough power already to hold directors to account on executive pay, so there is no need for legislation.

But one problem is that the life assurance and fund management industries live in glass houses so they are reluctant to start throwing stones at others for being rewarded for failure. The other problem is that the life assurance, fund management and pension fund industries are not properly accountable to the people whose savings they invest.

It is the names of these organisations that appear on the share registers and have the right to vote, not the people whose savings they invest. This is a classic problem of organisations having power without proper accountability.

David Hoye

London N7

Cancelling Sudan's debt won't cost taxpayer anything

Stephen O'Brien asks where the axe should fall if cancelling Sudan's debt (letters, 3 January); the answer in this case is, nowhere. Sudan has not made any repayments for more than 25 years. Debt cancellation would not save Sudan money nor cost the UK.

This is even more the case, given that most of Sudan's £678m debt to the UK is interest from the ridiculous 10 to 12 per cent annual interest rates charged since 1984. It is made-up money, not aid. The cancellation of other unjust debts would cost the UK only if they are being repaid. For example, the Egyptian people are repaying debts on loans for General Mubarak to buy British military equipment.

Such debts should be cancelled because they are unjust, though the government does not intend to do so, and UK Export Finance refuses to even release the documents on where the debt comes from. The cost to the UK of cancelling all Third World debt still owed would average £66m a year; less than the running costs of the House of Lords.

It is disgraceful to weigh the interests of impoverished people in the UK against those in the developing world. The fact is both are suffering from more than 30 years of recurrent debt crises caused by unregulated global finance.

Bringing wild capital flows under control, for example through reintroducing capital controls, is one of the main ways to prevent debt crises, reducing inequality and cutting poverty in the UK and overseas.

Tim Jones

Policy Officer, Jubilee Debt Campaign, London N1

Eurozone periphery countries face falling output, spiralling public debt and the prospect of debt default, and leaving the eurozone. In the eurozone, both monetary and fiscal policies are set defensively, ensuring continued austerity and a spreading economic contraction.

The authorities in Europe aim to contain surging interest rates and mop-up excessive debt of periphery governments by bond purchases and "bail-outs". This approach treats the symptoms only: it seeks to contain the fire once it has blazed out of control, but it fails to extinguish the source of the blaze.

What is needed in a policy that hits the fire at its source, without smothering the economy. The main source of the debt problem is the on-going fiscal deficit. The European solution is to adopt crude fiscal austerity to force down these deficits: but this approach only adds more fuel to the fire as it deepens depression, reduces government revenues and creates even more debt. The approach is self-defeating in the short to medium terms.

A new approach is required to get through the current crisis. Ministries of finance could print new money (or the central bank could print it for them) to finance their fiscal deficits. This strategy would work to address rising public debt at its source and lower interest rates. It would also simultaneously provide economic stimulus to create growth and address rising unemployment.

Sterilisation could be applied as appropriate to ensure an appropriate inflation outcome. This new approach would represent a step in the right direction for periphery countries. It is time for limited money creation powers to be returned to sovereign periphery governments.

Richard Wood

Canberra, Australia

Is it time to enter the dragon at last?

If Scotland achieves independence, then presumably the cross of St Andrew will be removed from the Union Flag. This will give the opportunity for the Welsh dragon to be included in the new flag, since Wales is the only nation in the United Kingdom not currently represented.

Professor T M Hayes


Give voters a choice between Union, devomax and independence. For the result to have effect, though, the most popular choice must gain 51 per cent of the votes. The Union, I suggest, is preserved.

Robert Davies

London SE3

It has come to my attention a that a minority of the British people led by a Mr Alex Salmond are attempting to break up my nation. As a fellow British citizen, I do hope Mr Salmond agrees that I should at least have a vote on the matter. Britain is, after all, my nation as much as his.

Michael O'Hare

Northwood, Middlesex

Utter contempt for Cameron's party

David Cameron and his party beggar belief. Have they absolutely no idea how they will be judged for simultaneously planning to build a high-speed railway through the beauty spots of the Chilterns, and cutting all benefits for disabled people so that they will be totally 100 per cent dependent on their parents?

That is by far the most egregious aspect of their contempt for the people, and any concern they may claim for the environment has become risible almost beyond belief. Rage, fury, disgust and utter contempt doesn't even approach the reaction of most of us.

Eileen Noakes

Totnes, Devon

Whatever the economic merits of HS2, there are three certainties: it will overrun on costs; it will overrun on schedule; and, by the time the first two become clear, the ministers responsible will have moved on and be making money from lectures and their memoirs. Is this what David Cameron would call a reward for failure?

Nigel Bowker

Banchory, Aberdeenshire

Job Centre must be modernised

With regard to the story of graduate Cait Reilly taking the government to court (report, 13 January), it simply shows up the Job Centre for being inadequate for the situation that the country finds itself in today.

For years, it has been equipped to handle those who are ill-educated and have no intention of finding work. With the push towards university education, along with the recession following the collapse of the banks, and the massive public-sector cuts, "ordinary" people are being forced into the Job Centre.

What help can they provide for a former council executive on £60k per annum – a week-long course on CV writing and spelling? Or set up a first-class mathematics graduate for a numeracy course on how to add up your weekly shop?

The Job Centre needs to retrain on how to help those with a proper education, and proper work experience, on how to fit in to the often crazy world of job applications. There should be a range of training and placement opportunities higher up the ladder, and offering better prospects than putting tins of beans on the shelves.

William Neale


In brief...

HMRC denies penalties 'war'

HMRC does not use small-business penalties to boost revenue (report, 12 January). We do not want penalty payments either from businesses or individuals. We use penalties purely to encourage on-time filing and to be fair to the vast majority of taxpayers who file on time. HMRC supports small business, as shown by the £7.71bn of small-business tax we have deferred to help with cash-flow problems. We treat all taxpayers the same, irrespective of their size or nature.

Stephen Hardwick

Director, Corporate Communications, HMRC, London SW1

A bit rich

After the credit-card details of thousands of Israeli citizens were hacked, the Israeli Deputy Foreign Minister declared that it was a "breach of sovereignty comparable to a terrorist operation, and must be treated as such" (letters, 12 January). That's a bit rich coming from the spokesman of a country that has habitually breached the sovereignty of other nations by committing kidnaps and murders on their soil, and has not hesitated to falsify the passports of friendly countries to mount such "terrorist operations".

Adrian Marlowe

The Hague, Netherlands


Diane Abbott was half-right (letters, 7 January). All groups try to divide and rule others, not just the Caucasian tribe. Most people see no reason to change such behaviour because it often works.

Simon Allen

Watford, Hertfordshire

Earthy moles

The first time I found a mole in the garden (letters, 9, 11, 12 January) I was also taken by its silky coat and strength, and I could not resist sniffing the little creature. It smelled of fresh compost and leaf mould, just like a little denizen of the dark ought to. I have been happy to have moles in my garden ever since.

Helen Rawden

Crowland, South Lincolnshire

It is the soft and silky nature of the mole's exterior covering that makes it ideal for waistcoats. Best keep quiet about it.

Paul Eustice

Worthing, West Sussex