The case for reform is plain to see but it won’t happen because too many at the top have stakes in the old orderIt was a glorious September morning. But I was in a ruminative mood, walking towards Westminster’s Church House for the unveiling of another damning account of Britain’s economy. It was the launch of the interim report from the Institute of Public Policy’s (IPPR) economic commission. Time for Change is one of the best I’ve read and yet I was wondering how its unanswerable assessment of our economy and the need for systemic reform has so little purchase on the national debate.I made similar arguments in my book The State We’re In 20 years ago and have attended many such launches ever since, often graced by bishops and some daring business executives prepared to break cover and speak out. It’s the same story of underinvestment; a woeful track record on R&D; overemphasis on high, short-term profits; an incredibly poor record on productivity and stagnating real wages. On almost every international comparison, Britain fares badly, with a desperately weak export sector overfocused on financial services and a few manufacturing industries. Continue reading...

IMF study finds that the type of tax cuts introduced last year are too weak to raise the welfare of most of the population and never pay for themselvesA new study by the IMF examining the impacts of tax cuts has found that while lowering tax rates for the rich will stimulate the economy, it does so at the great cost of increased inequality.Most damningly, it finds the benefits of tax cuts targeted at the wealthiest 25% – such as the one the Turnbull government brought in last year – are far too weak to raise the welfare of the majority of the population and also never pay for themselves.Related: Beware tax cuts for 'Middle Australia'. Above-average earners benefit mostRelated: Company tax cut cost reaches $65.4bn over 10 yearsRelated: Is it time to make the Medicare levy progressive? High income earners can afford it | Greg Jericho Continue reading...

The chancellor’s options in the autumn budget to allay voters’ frustrations over austerity are diminishing by the dayIn the weeks that followed their disastrous election result, a delegation of Tory MPs marched to Downing Street with a clear message for the prime minister and her team. After years of austerity, voters’ patience was running out, and some positivity was needed.The MPs went away from the meeting convinced they had secured an end to the public sector pay cap that would mark a loosening of spending cuts that they could use to show their constituents that the government was listening.NHS Providers sai the service was on course for disaster unless an extra £350m was found for beds and staffIt all adds up to a very long queue outside the chancellor’s door Continue reading...

Farmers, hoteliers and caterers say leaked proposals to limit free movement would spell catastrophe – but what would they really mean?A previously muted British business establishment is now in full cry over Brexit. The leak last week of proposals to restrict the ability of European Union nationals to live and work in the UK were described as “catastrophic” by one employers’ group. Voices from housebuilding to aerospace, farming and hotels raised concerns over the plans, which signalled a hard Brexit is very much on the cards.The warning of catastrophe came from the British Hospitality Association, while the National Farmers Union said the draft Home Office plans would cause “massive disruption to the entire food supply chain”. The reaction was also fuelled by the government’s refusal to disown the plans, alongside its apparent support of a hard Brexit agenda. We answer the key questions raised by the leak, including the potential consequences for the UK economy. Continue reading...

Margaret Thatcher | George Osborne | British Virgin Islands | The Fife | Racing tips | Walter BeckerPerhaps there was no room for M Thatcher, MA Oxon (Letters, 7 September). She had at least half a dozen failings: Proposed withdrawal of HMS Endurance from the South Atlantic, precipitating invasion of the Falkland Islands; squandering North Sea oil and gas revenues; premature closure of coal pits; refusing EEC matching funding for regional aid; refusing to renew social housing; imposition of the poll tax first on Scotland, undermining the union…

Exports of British-made goods to EU increase by £1.3bn, underlining country’s reliance on trade with continental EuropeBritain’s efforts to expand trade in goods beyond the European Union’s border took a knock in July after official figures showed the UK’s deficit with the rest of the world widened following a drop in exports.The deficit in the trade in goods with non-EU countries widened by £2.4bn while exports to the EU grew to cut the trade gap by £1.3bn.Related: UK economy 'treading water' as eurozone stretches ahead, says BCC Continue reading...

The pound has risen above $1.32 for the first time in five weeks after UK manufacturing output rose for the first time in 2017 in July

We should have learned the lessons of Hurricanes Katrina and Sandy – we need political action to help prevent disastersTropical Storm Harvey has left in its wake upended lives and enormous property damage, estimated by some at $150-$180bn. But the storm that pummelled the Texas coast for the better part of a week also raises deep questions about the United States’ economic system and politics.It is ironic, of course, that an event so related to climate change would occur in a state that is home to so many climate-change deniers – and where the economy depends so heavily on the fossil fuels that drive global warming. Of course, no particular climate event can be directly related to the increase in greenhouse gases in the atmosphere. But scientists have long predicted that such increases would boost not only average temperatures, but also weather variability – and especially the occurrence of extreme events such as Harvey. As the Intergovernmental Panel on Climate Change concluded several years ago, “There is evidence that some extremes have changed as a result of anthropogenic influences, including increases in atmospheric concentrations of greenhouse gases.” Astrophysicist Adam Frank succinctly explained: “Greater warmth means more moisture in the air which means stronger precipitation.”Related: After the storm: how should cities rebuild post hurricanes like Harvey and Irma? Continue reading...

British Chambers of Commerce cuts growth forecasts blaming squeeze on household budgets and failure of exporters to capitalise on low poundBritain is locked into a “low growth trajectory” that will see GDP growth dip next year while the eurozone shrugs off Brexit uncertainty to stretch ahead, according to a leading business group.The British Chambers of Commerce said a squeeze on household budgets and the failure of exporters to capitalise on the low pound meant the UK was “treading water”. Continue reading...

All the day’s economic and financial news, including rolling coverage of a crucial European Central Bank meeting.

David Reed says deterring EU migrants could benefit British workers but devastate the economy; Emma Gee says the contribution of non-EU immigrants to the UK coffers should not be overlooked; while Stephen Games writes that morally it is low-skilled foreign workers whom the UK should encourage to comeThe immigration strategy discussed in the leaked Home Office document could be as beneficial to British workers as the Black Death (Revealed: Tories’ Brexit plan to deter EU migrants from Britain, 6 September). My limited historical knowledge tells me that when the working population was decimated as the bubonic plague spread throughout Britain (and Europe), employers suddenly had to start treating the people working for them decently, even paying them enough to live on.Of course, the document fails to address the impact their proposals will have on every area of economic activity across the whole country: no more cheap crop harvesters, nurses, carers, shop assistants, road cleaners, office workers, taxi and bus drivers etc. Nor does it even think about the massive impact that having to pay people real wages will have on business finances across the whole economy. Continue reading...

John Cryan says bubbles are emerging in parts of market ahead of European Central Bank monetary policy meetingIt is time to start raising interest rates, the chief executive of Deutsche Bank has said, warning that bubbles are emerging in parts of the market.Speaking in Frankfurt, John Cryan said: “The era of cheap money in Europe should come to an end, despite the strong euro.”Related: Business Today: sign up for a morning shot of financial newsRelated: Deutsche Bank boss says 'big number' of staff will lose jobs to automation Continue reading...

Bit by bit, the abuse of disabled people in the UK is being normalised. Talk of a human catastrophe in this country is in no way exaggeratedIt’s often said that the mark of a civilised society is how it treats its most vulnerable citizens in times of austerity. And in the past week, Britain has had not one but two damning judgments – the first from a committee room in Geneva, the second in a courtroom in London.Last Thursday a United Nations inquiry into disability rights in the UK ruled that the government is failing in its duties in everything from education, work and housing to health, transport and social security. Presented with overwhelming evidence of a range of regressive policies and multibillion-pound cuts to disability services, it described the treatment of disabled people in this country as a “human catastrophe”. Continue reading...

South Korean president tells Russian leader that situation risks becoming uncontrollableThe South Korean president, Moon Jae-in, has warned that the crisis on the Korean peninsula risks becoming “uncontrollable” as he sought Russian cooperation in a meeting with Vladimir Putin.

All the day’s economic and financial news, as the Bank of Canada and Stanley Fischer both surprise the markets

Industry leaders urge open approach to hiring from EU after proposals for post-Brexit policy are revealedBritain’s blueprint for a post-Brexit immigration policy, outlined in leaked Home Office documents, would be “catastrophic” for some industries, employers have warned.Corporate chiefs and industry leaders in sectors including housebuilding, aerospace, farming and hotels said the tighter controls could lead to labour shortages and damage the economy, as one of their biggest fears about Brexit shows signs of becoming a reality.Related: Home Office leak shows unpicking of EU nationals' family reunion rightsRelated: Government asks big companies to sign letter backing Brexit strategyRelated: Leaked document reveals UK Brexit plan to deter EU immigrantsRelated: MPs react strongly after post-Brexit immigration plans leaked Continue reading...

Report backed by business leaders says gains from growth are going largely into profits for corporations rather than wagesBritain’s economic model is broken and produces widespread inequality, the Archbishop of Canterbury has warned in a report backed by business leaders.Justin Welby said the UK needed to make fundamental choices about the direction of its economy, in a study that found the gains from growth are being diverted into profits rather than wages.Related: Britain’s economy is broken. We desperately need new ideas | Tom Kibasi Continue reading...

Analysts voice concerns that UK economy is being held back, blaming Brexit uncertainty and weak poundBusiness leaders have blamed the uncertainty created by Britain’s vote to leave the European Union for the slowest pace of output growth in the services sector for almost a year.Financial data provider Markit said Brexit uncertainty and higher import costs arising from the slump in the pound were behind the stumbling performance of the UK’s largest business sector last month.Related: UK construction 'flirting with recession' as Brexit uncertainty bites Continue reading...

Weakness in sterling having positive effect on manufacturers as goods made in Britain become cheaper for buyers overseasBritish manufacturers and retailers are reporting an upswing in sales, despite fears Brexit could hamper future growth, as the weak pound bolsters exports abroad and consumer spending at home.Retail sales increased by 1.3% on a like-for-like basis last month from August 2016, when they fell 0.9%, according to the British Retail Consortium. Meanwhile the EEF manufacturers’ organisation said there was rising demand for goods made in Britain from Europe and the rest of the world.Related: UK construction 'flirting with recession' as Brexit uncertainty bites Continue reading...

A £50bn-a-year green infrastructure quantitative easing programme is feasible, say Prof Richard Murphy and Colin HinesZoe Williams is right: another credit crunch-induced “crash” is likely and the only affordable rescue package will be some form of quantitative easing (With Britain’s addition to debt, another crash is certain, 4 September). This time it must generate jobs for the “left behind” and others, rather than today’s beneficiaries – the property- and share-owning rich. The Green New Deal group showed the potential of such an approach in its proposal for a £50bn-a-year green infrastructure QE programme.This would pay to make the UK’s 28m dwellings and 2m commercial and public sector buildings super energy efficient, dramatically reducing energy bills, fuel poverty and greenhouse gas emissions. It could also tackle the housing crisis by building affordable, highly insulated homes, predominantly on brownfield sites. This form of QE would provide job security and local business opportunities in every constituency, since its infrastructure improvements would take place across the UK. Continue reading...

Proposed cuts to federal agency budgets and changes to employment law benefit only the US president and his cronies

All the day’s economic and financial news, as British builders are hit by concerns over the economic outlook

The word has become a rhetorical weapon, but it properly names the reigning ideology of our era – one that venerates the logic of the market and strips away the things that make us human• Read the text version hereSubscribe via Audioboom, Apple Podcasts, Soundcloud, Mixcloud, Acast &Sticherand join the discussion on Facebook and Twitter Continue reading...

Growth slows to one-year low with analysts as Brexit delays investment plans and saps demand for new office spaceBritain’s construction industry is taking on fewer workers amid a slowdown in commercial work, as economic uncertainty puts projects on hold.Growth in the construction sector fell unexpectedly to a one-year low in August, the closely watched Markit/Cips purchasing managers’ index for the industry showed on Monday.Related: UK construction growth hits one-year low as Brexit worries build - business live Continue reading...

Survey by Lloyds Bank finds people’s confidence in Britain’s financial situation has worsened amid rising pricesWorries about rising inflation among UK consumers are at their greatest in three and a half years, while people’s confidence in Britain’s financial situation has worsened, according to a survey.A monthly poll by Lloyds Bank found that 65% of people felt negative about levels of inflation in July, up from 60% in June and the highest level since January 2014. Continue reading...

Ten years ago the culprit was sub-prime mortgages. Personal credit is out of control in Britain now. We seem to have learned absolutely nothingWhen Provident Financial lost £1.7bn in share value a little over a week ago, a handful of people asked whether this was a Northern Rock moment. The Provident extends high-interest loans to low-income people, and as such could be seen as a bellwether in the manner of a sub-prime mortgage company, the first to go under when debt becomes unbearable, the signal that credit is, once again, about to crunch.Related: Doorstep lender Morses swipes customers from troubled rival ProvidentThere is something obscurely insulting about being warned about household debt by the Bank of EnglandRelated: Drive carefully – I can see a credit car crash up ahead | Phillip Inman Continue reading...

Far from David Cameron’s vision of a strident UK distancing itself from a failing union, Brexit may deliver the oppositeWhen David Cameron set out to create a “two-speed Europe” , the former prime minister did so with the words of the Eurosceptic Tory right ringing in his ears.Europe was doomed. Mounting problems for Greece and rising numbers of immigrants showed that Britain must cut itself free from a failing union. Far from prospering from our membership of the world’s largest economy, the EU was hindering mighty Britannia. Take back control. Let Brussels sink.Related: Slowdown in consumer credit growth spells trouble for UK economy | Phillip InmanRelated: The EU is not the enemy of the state. Time to think again on BrexitRelated: British tourists tell of misery abroad with pound at eight-year lowRelated: We have the power to create the economy we want – let’s use it | Tom Kibasi Continue reading...

This week, the IPPR Commission on Economic Justice delivers a new vision for the UK economy, one that joins prosperity with justice and builds the common goodToday, the unclear prospects of Brexit loom large over our economy and our politics. The vote to leave was, by definition, a vote against the status quo. A majority of British people felt they had little to lose and perhaps something to gain from a radical shake-up of the economy. “Take back control” resonated because it was an expression of a feeling of powerlessness in the globalised economy.The general election that was ostensibly called on the question of Brexit rapidly focused on the state of the country at home – schools funding, NHS deficits, public sector pay, reductions in police numbers. And the increase in voting by people in their 20s and 30s revealed the depth of frustration among younger generations, so many of whom are unable to access decent housing and are weighed down by mounting student debt. This generation expect that they will be poorer than their parents because they will be. Continue reading...

So far this year, at least 140 million people across 37 countries have been left in need of humanitarian aid. But most of them will not get itFor tens of millions of people around the world, 2017 has been a year of disasters. The latest in a long list of catastrophes, natural and manmade, has left more than 40 million in India, Pakistan, Bangladesh and Nepal struggling with extreme monsoon flooding. Many of those affected are the least able to cope – subsistence farmers and the urban poor who can expect little help from their governments. In a world inundated by emergencies, they may be left, literally, to sink or swim. Continue reading...

However confident the Fed is of recovery, there is growing evidence of a slide into outright deflationHurricane Harvey was such a distraction last week that Donald Trump forgot to tweet about his country’s return to 3% GDP growth. When the news came that US second-quarter GDP, when extrapolated over a year, showed the country growing at the fastest rate in the G7, he was busy flying down to Texas to support the relief effort.Trump and his Treasury secretary Steve Mnuchin have promised to deliver 3%-plus growth and here was the first indication that the president’s arrival in the White House had made a difference. In a way, it is just as well he missed the opportunity to brag. The headline figures may look good, but a peek under the bonnet of the US economy makes for disturbing reading. In a report last week a senior City analyst, Albert Edwards, showed that the Trump effect is quite the opposite and much of the life has been sucked out of the American economic juggernaut in the last six months.Related: Trump vows to 'bring back Main Street' by cutting business tax to 15%Related: The president tweeted it – but is the US economy really great again? Continue reading...

A BBC Radio 4 programme examines why experts often get predictions wrong – and meets the people who get them rightWhile accepting the Nobel prize for economics, Friedrich Hayek made an astonishing admission. Not only were economists unsure about their predictions, he noted, but their tendency to present their findings with the certainty of the language of science was misleading and “may have deplorable effects”.This revelation, made about 40 years ago, is a crucial one and yet it has been largely forgotten or ignored. One of the most striking comments before the EU referendum was from Michael Gove. He claimed people in Britain had had enough of experts. This has since become something of a mantra, and polling does indeed suggest that most people place little trust in expert predictions and pronouncements. Continue reading...

Because US infrastructure is not built to withstand climate change the cost of the disaster will be relatively highHurricane Katrina in 2005 was “the first taste of a bitter cup that will be proffered to us over and over again,” according to former US vice president Al Gore at the time.Since then, Hurricane Sandy in 2012 and now Hurricane Harvey have borne out this prediction. The latest storm may turn out to be less fatal than Katrina, which killed more than 1,800 people but in economic terms it may be as bad. Hurricane Katrina cost about $160bn (£124bn) in economic losses in today’s terms, accounting for the last decade’s inflation, while Sandy wrought about $70bn in damage.Related: A timeline of the billion-dollar weather disasters in the US over the past decadeWeather catastrophes are now six times more frequent than in 1950 Continue reading...

Brexit secretary also tells US Chamber of Commerce Britain will not take part in a ‘race to the bottom’ to secure trade dealsThe Brexit secretary, David Davis, has taken aim at the isolationist rhetoric of Donald Trump in a pointed speech in which he told US business leaders that free trade was the solution to, not the cause of, global turmoil.Speaking to the US Chamber of Commerce, Davis said Britain would not take part in a “race to the bottom” in order to secure new free trade deals with countries outside the EU after Brexit.Related: Trump wants to shut out the world. Ditching the Paris deal proves it | Simon JenkinsRelated: Liam Fox accuses EU of trying to 'blackmail' UK over Brexit deal Continue reading...

Figures could be made worse next month by impact of Tropical Storm Harvey and reduce chances of interest rate riseThe US economy recorded a sharp fall in job creation in August, raising questions over whether the Federal Reserve will raise interest rates before the end of the year.Economists had expected the US to add about 180,000 jobs over the month. But the latest figures from the Bureau of Labor Statistics showed a marked slowdown on the previous month, with a rise of 156,000 jobs. The figure for July was revised down to 189,000 from an initial 209,000, while for June number was reduced from 231,000 to 210,000, compounding the weaker picture.

Growth in US jobs slowed sharply in August, diminishing the prospect of another interest rate hike before the end of the year

Weak pound reported to have helped competitiveness, but rising raw material prices could cause problemsBritain’s manufacturers increased production at the fastest pace in seven months in August, taking on more workers to keep up with strong domestic and international demand.The closely watched Markit/Cips UK manufacturing PMI barometer of factory sentiment showed activity jumped to 56.9 last month from 55.3 in July, the second-highest level in more than three years, helped by the weak value of the pound.Related: Lack of skilled EU workers 'could choke UK growth post-Brexit' Continue reading...

Panel of economic experts hired, but move raises risk speculators could bet against council should oil prices wobbleAberdeen city council has taken the unusual step of appointing economic advisers to assess its prospects for the bond market, as a growing number of local authorities turn to the world of high finance amid central government cuts.Councillors in Scotland’s third largest city will get advice from three experts on the state of the regional economy, and will help the panel with the annual assessment of a credit rating agency Moody’s. Aberdeen is one of a handful of councils to raise money by selling bonds, raising £370m in November 2016 to help finance a £1bn capital spending programme.Related: Greed is no longer good – bond boom comes to an endRelated: Greece plans return to bond market as Athens sees end in sight to austerity Continue reading...

MPC members do themselves little credit, as withdrawing the only stimulant that still works at this time would be negligentMichael Saunders surprised many when he voted in June for the Bank of England to increase interest rates.The former Citigroup economist, who joined the Bank’s nine-strong monetary policy committee (MPC) last year as one of the four external members, warned that the UK economy was performing well enough for inflation to become a challenge. The response, he said, should be a modest rise in the cost of borrowing for businesses and households. Continue reading...

Nobody’s job is safe. But a citizen’s income in a post-work world could see us avoid the Terminator scenario and return to pre-capitalist sources of valueSemi-automated truck convoys are soon to be tested on UK roads. Perhaps, one day, human beings won’t be allowed to drive. Perhaps it will be considered too risky to put an easily distractible human being in charge of a ton or more of fast-moving metal. Future generations may think of driving as terrifyingly retro.It’s yet another example of a pressing existential question, as well as an economic one. When clever robots have taken most of our jobs, how will we live and what will we live on? For these Meccano scabs are not only going after the repetitive tasks of the long-distance lorry driver or factory workers. Once they pass the Turing test and can successfully fob themselves off as human beings, jobs that used to require a university degree will be just as much at risk. Human beings are fast heading for obsolescence. Continue reading...

Michael Saunders says Brexit uncertainty is hitting consumer confidence, but ‘modest’ increase is necessary to curb high inflationBritain needs higher interest rates to prevent inflation from heading back towards 3% and staying there for several years, according to Michael Saunders, one of the two dissenting Bank of England rate-setters to vote for a rise earlier this month.Saunders said the UK economy was able to withstand the impact of higher credit costs after a steep fall in unemployment that paved the way for an increase in wages and higher prices in shops.Related: Quantitative easing is a costly habit we should have kicked long ago | Larry Elliott Continue reading...

President says US is being ‘taken to the cleaners’ by rivals and issues blunt demand for Democrats to support his reformsDonald Trump has vowed to cut the US business tax rate to 15%, in a speech otherwise short on specifics but heavy on “America first” rhetoric.Addressing workers in Springfield, Missouri, the US president – who is yet to release his own tax returns – sought to take up the mantle of Ronald Reagan, the last president to oversee a major tax reduction, even though he has sharply criticised Reagan’s measures in the past.Related: Ivanka Trump supports rollback of Obama's policy to close gender pay gapRelated: Neoliberalism: the idea that swallowed the worldRelated: The president tweeted it – but is the US economy really great again? Continue reading...

Matthew Goodman says the US will look to Australia to advance issues of mutual interest without actively joining trade pactA former Obama administration official says he believes the Trump administration has given Australia tacit approval to move ahead with the Trans-Pacific Partnership, despite the president disavowing and dumping the agreement as one of his first acts in office.

Consumer borrowing through credit cards, overdrafts and personal loans slows slightly amid squeeze on living standardsThe rapid growth in borrowing by consumers appears to be slowing amid a squeeze on households, despite remaining at levels unseen since the financial crisis.The annual rate of growth for consumer borrowing through credit cards, overdrafts and personal loans slowed to 9.8% in July, the lowest rate of expansion since April 2016, according to the Bank of England. The growth rate was a little weaker than in recent months, when the pace of expansion was above 10%.Related: Credit card lenders 'targeting people struggling with debt' Continue reading...

Readers including Arthur Scargill respond to Jeremy Corbyn’s decision to change tack on BrexitThe publicity now given to the decision of Her Majesty’s Most Loyal Opposition to start opposing the government on Europe is indicative of its curious failure to do so hitherto (Report, 28 August). Labour’s new policy of a very soft Brexit is to be welcomed, but for all the advocates of such a policy there is the huge question mark hovering overhead – why advocate adhering to the single market and the customs union without also insisting on being part of the decision-making process on the rules of these bodies? This is the essential weakness of those who keep insisting that the UK will leave the EU.Your leader (So far, so good. Labour’s soft Brexit move changes the debate, 28 August) states that “further steps are not ruled out”; unless this includes taking the first opportunity to reverse article 50, Labour’s change of direction is only taking us down a side alley.

Jim O’Donnell isn’t sure France needs its own Thatcher, while Martin London thinks education is the key to the wealth disparity. Plus David Redshaw writes on how inequality drives boom and bustWelcome back to the Guardian’s agenda-setting Monday economic analysis page (Fat cats and how the wealth gap has been steadily widening, 28 August). It takes me back 25 years to why I first started to buy the paper. More of this would be most welcome; in particular, more on the sort of fundamental transformation that will be required to pre- and post-income regimes if the situation is to be reversed.On the opposite page Natalie Nougayrède more or less encourages President Macron (as if he needed it) to show the French a bit of the tough love that was Thatcherism. In fairness, she does acknowledge that “In France, income inequality and poverty rates are lower than in Britain and Germany,” but does not speculate whether that would be the case if they had had a Thatcher or a Hartz IV, the German labour market reforms. Unemployment levels in France are undesirably high, but if you were unemployed in France would you be gasping for access to the conditions of the bottom 25% of the “employed” in the UK or Germany? Of course, it’s not the real choice that the French should have to make but that’s a longer story.

Any desire for a clean break with the EU is pure Tory fantasy. Jeremy Corbyn must defend access to the single market and customs union permanently

Average price of a home fell 0.1% between July and August as pressure mounts on household finances, says NationwideUK house prices dipped this month, dragging down the annual growth rate, in further evidence of a cooling market.The average price of a home fell 0.1% between July and August to £210,495, according to Nationwide, Britain’s biggest building society. Prices rose in July and June but fell between March and May, the first time this had happened since the financial crisis. Continue reading...

Theresa May has always wanted a new approach to executive pay and boardroom values. Her latest plans fall far short of what Britain – and the Tory party – should demandAttacks on excessive executive pay and calls for more consensual company management have always marked Theresa May’s Conservatism out from that of her more Thatcherite colleagues. Mrs May has highlighted these issues often since she became prime minister. At the weekend she returned to the theme in a newspaper article, echoing Edward Heath’s 1973 phrase about the “unacceptable face of capitalism”. Now she is having another try, launching a package of measures on high pay, workers’ rights and corporate governance to mark her return to the political stage after the summer break.Mrs May’s concern about these issues is right and rational. They are unfinished business for modern Britain. Unfortunately there is little that measures up in this package. Several of the ideas that Mrs May floated in 2016 – themselves fairly modest in the first place – have now been trimmed back or dropped altogether, in response to lobbying by the chancellor, Philip Hammond. Binding annual votes by shareholders on executive pay have bitten the dust. Now the City’s self-regulatory code will require companies only to publish the pay ratio between CEOs and their workforce average. Plans to put employee representatives on company boards have been abandoned. Now the appointment of a non-executive director “to represent employees” will suffice. Continue reading...