LONDON BRIEFING:While gifts are scarce this Christmas, bankers keep getting bonuses
IT REALLY has come to this. The Radio Timeshas decided to banish Santa Claus from its Christmas edition this year, fearful a gift-bearing Father Christmas might be "a symbol of over-indulgence" at a time of austerity. Instead, the two-week edition of the listings magazine, which has a print run of three million, will feature an old-fashioned illustration of a Christmas tree (without presents underneath), described by the magazine as "nostalgic and beautiful to lift the spirits in troubled times".
Economists are now beginning to talk of a “lost decade” in Britain. Stagnant wage growth, inflation and deep cuts to public services paint a bleak picture.
The influential Institute of Fiscal Studies has estimated average households will have suffered a decline in living standards of 7.4 per cent between 2009-2010 to 2012-2013, matched only by a similar-sized drop in the mid-1970s.
Labour has failed to articulate a real alternative, causing increasing frustration with the party. A group of influential Labour thinkers has criticised shadow chancellor Ed Balls for remaining too vague about how he would deal with the deficit.
A YouGov poll published in the past week showed voters still blame the economic downturn on the euro, the banks and Labour’s legacy.
The coalition meanwhile has gone on the offensive again with an astute vote-garnering attack on executive pay. Deputy prime minister Nick Clegg disclosed, at the end of a week in which growth forecasts had tumbled and one to two million public sector workers had gone on strike, that the government would publish proposals to rein in excessive pay next month. The treasury yesterday launched a consultation proposing that the eight highest-paid executives outside boardroom level of Britain’s biggest banks would have to reveal their pay packets.
One company at least is in no mood to listen. Barclays Bank, run by Bob Diamond, who pockets £8 million a year, is reportedly planning to pay its investment bankers £5 billion this year, including salaries and bonuses. That’s despite a Bank of England warning banks should “limit” bonuses to shore up their balance sheets in the teeth of the crisis.
City bonuses this year are expected to reach £4.2 billion, less than half their peak of £11 billion in 2006, but it is safe to assume that Santa won’t be banished from many investment bankers’ homes.
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The issue of how to get more women into the boardroom has been a constant theme in the City for many years. For all the think tanks, lobby groups and even politicians wading in on the subject, there has been stubbornly little improvement among FTSE firms.
But that could change after Britain’s biggest pension fund investor stepped in and warned it might vote against directors responsible for top-flight appointments if they failed to bring more women into the highest ranks.
Legal and General Investment Management said it would consider voting against nomination committees if they are unable to explain why a company’s board is still male-dominated.
A government-commissioned review of boardrooms, carried out by the former boss of Standard Chartered, published findings in February warning FTSE 100 companies they needed to double representation within five years to 25 per cent or face sanctions – although he stopped short of issuing a mandatory quota.
Several European countries have considered the idea of quotas, and in Norway the boards of listed companies must be 40 per cent female.
Cameron in October even suggested that opening boardrooms up to women, and breaking the old boys’ networks that still have a stranglehold over much of UK plc, might help drive down executive pay.
The shot across the bows of Britain’s leading companies appears to be having some marginal impact.
Recent research from Cranfield University said women filled 14.2 per cent of seats on FTSE 100 boards, but that was up from 12.5 per cent in 2010. Cranfield also found 22.5 per cent of new boardroom appointments over the past year had been women, suggesting that change is happening, albeit still slowly.
