“How long will it be necessary to pay City men so entirely out of proportion to what other servants of society commonly receive for performing social services not less useful or difficult?”
Given that John Maynard Keynes asked that question in 1913, the answer is: “At least 104 years, JM old son.” Fat cat pay was a toxic issue in the years immediately after the financial crisis but as time has rolled on, public attention has shifted to other matters.
That being said, there is still plenty of resentment about the discrepancy between average salaries and the bloated packages available in Britain’s boardrooms. When Theresa May was pitching to be Conservative leader and prime minister, she vowed to crack down on corporate excess in a speech so barnstorming that her sole competitor, Andrea Leadsom, pulled out of the race an hour later, albeit for multiple reasons.
Since then the proposals seem to have been watered down and look highly unlikely to include, for instance, greater powers for shareholders to block pay deals. Instead, proposals due out this week are set to include mandatory disclosure of the pay gap between executives and workers.
So maybe, more than a century after he asked the question, Keynes will get his answer. Whether it will be in English, rather than corporate gobbledegook, is another matter.
Even the watchdog wants you to make a PPI claim
For anyone who hasn’t had enough of phone calls offering untold riches via compensation for mis-sold PPI, now the campaign is hitting the TV, radio and billboards. In this case though, it won’t be bogus cold calls but advice from reputable City watchdog the Financial Conduct Authority.
The FCA has grabbed 18 banks by the ear and forced them to stump up £42m to fund the campaign, with two years to go until the cut-off point for claims. The regulator is trying to mop up the last victims of the UK’s biggest mis-selling scandal and is acutely aware that major banks are still sitting on billions in unpaid compensation. The big four lenders – HSBC, Barclays, RBS and Lloyds – have about £6.5bn set aside between them.
The scandal proved to be bigger than anyone expected. When it emerged, regulators estimated about 3 million people had been affected. That has since snowballed to 12 million, who have so far received more than £27.4bn.
By launching a national campaign, the FCA hopes it can winnow out the last remaining claimants and get their money back – something that will also allow the banks to draw a line under the whole sorry affair.
All bets off if bookes lose cash cow
GVC, owner of betting brands such as bwin and Sportingbet, has been sidling up to Ladbrokes like a prime racing stud eyeing a comely mare. The British gambling scene has witnessed several happy unions of late, with Paddy Power teaming up with Betfair, and Ladbrokes’ own tie-up with Coral still less than a year old. Analysts now think another round of consolidation is on the cards. GVC has confirmed that it spoke to Ladbrokes about a deal worth up to £3.6bn, but talks broke down. The prospect of a revived deal is sure to capture attention next week when Ladbrokes posts half-year results.
But the elephant in the room is the government’s gambling review, now due in October, which could include a recommendation for a reduction in the maximum stakes on fixed-odds betting terminals (FOBTs), the industry’s cash cow. GVC is thought to have told Ladbrokes that it would take a large chunk of its money off the table if the FOBT verdict proves harsh. Analysts at Barclays think a £2 maximum stake on FOBTs would see Ladbrokes forfeit £450m in lost revenues, so GVC’s logic looks sound.
Even if no merger materialises, Ladbrokes and its high street rivals will already be preparing for life without their most profitable product. For once, the house might lose.
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