May’s “unacceptable face of Capitalism” changes

Theresa May’s proposals fall well below what the PM herself promised, but maybe that’s not as bad as it seems.

When Theresa May addressed the awaiting media upon becoming Prime Minister last July, she outlined problems she thought existed with big business, and the perception of unfairness that it had permeated throughout British society. When she addressed the CBI, she told them they had to change their practices of excessive pay and become more accountable both to their own shareholders and the public. In her speech to the Conservative Party's Conference last October, she spoke of the changes she would bring in as Prime Minister to ensure this greater accountability happened.

Today, those proposals were published. After an election that saw Theresa May lose her parliamentary majority, the original lofty rhetoric and policies first spoken of in Birmingham has been replaced by watered-down, half-hearted proposals. “Mayism” truly is no more: gone is the proposal to put workers on boards, and in is the proposal to have workers’ representation via committees; gone is the requirement for investors and share holders to have binding votes on executive and director pay, and in is the simple requirement to publish when investors disagree with pay decisions.

Now, these proposals don’t personally motivate me any which way. The idea of workers on boards is odd and borderline protectionist, though I do see reason for greater influence in big businesses’ investors over their pay packages. That is a model which must be introduced to democratise investment in big business, improving public confidence and ensuring that those on the higher incomes truly deserve their pay rises.

Obviously it still isn’t for the Government to determine this; there should be no “maximum wage”, for example – but the publication of pay ratios between the highest paid individual and the average pay rate will bring greater clarity and accountability, and ensure that companies are able to show that their success is being driven down to the company floor, and not simply accumulated in the highest office, improving the reputation of business after the BHS and SportsDirect scandals.

The changes since May first announced these policies last year is noticeable, though. Trade Unions that previously praised the (Conservative!) Prime Minister now say her policies don’t go far enough, while the CBI finds the changes more manageable and palpable compared to the overly “statist” policies last year. Undoubtedly she was worried about not getting the legislation through the Commons with the current arithmetic; the hung parliament of course leaves May vulnerable to any rebellion, and this isn’t something the DUP deal covers.

May, though, should not be afraid of pushing this through with Labour votes. Even if the most adamant Tory Thatcherites rebelled her whip, she could have convinced a good chunk of Labour MPs to back her original proposals – very similar plans were supported by Ed Miliband after all. Working with Labour MPs may seem unattractive, but would offer May the chance to gain some respect back, even if only in he country and not from her own party that would largely dislike the proposals. She should not rule out coming back to these proposals, perhaps towards the end of her now time-limited premiership.

May will be remembered for Brexit and a wasted premiership. If she is serious about getting some more of her agenda through, she needs to reach out across parliament on issues where there is opposition agreement. After that election result, what does the Prime Minster have to lose?

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