People want to see greater transparency, accountability and fairness in executive pay - Umunna

24 January 2012

Chuka UmunnaChuka Umunna MP, Labour's Shadow Business Secretary, commenting on Vince Cable’s announcement on executive pay, said:

"It is extraordinary that while Ministers have called for greater transparency and accountability in the setting of executive pay, the Government had to be dragged to the House of Commons in order to be held to account by the people’s representatives on this issue. I welcome the Business Secretary’s announcement, but his proposals do not go far enough. People in business and society want to see greater transparency, accountability and fairness in executive pay, but the measures fall far short of the tests we have set in these areas.

"Ministers talk about greater employee engagement but have refused to back Labour’s call for an employee representative on the remuneration committees of company boards which determine pay, something which happens in Germany, Europe’s most successful economy, and which one of our leading businesses John Lewis already practices. It has been reported that the Business Secretary is sympathetic to this proposal but has been blocked from supporting it by the Prime Minister and Chancellor.

"Labour has called for the recommendations of the independent High Pay Commission to be implemented in full and it is a real missed opportunity that Vince Cable hasn’t followed our lead on this, despite the fact that Liberal Democrat Treasury spokesperson Lord Newby was one of its six commissioners putting forward the proposals. On shareholder activism, Ministers have said they are in a position - given the state's shareholding in RBS - to stop the CEO of that bank receiving a large bonus at the same time that thousands of RBS employees are being made redundant, but so far they have refused to set out when and how this will happen."