Tories buy election

10 Downing StreetDemocracy is a great system, except that those in power do their uttermost to subvert it, circumvent it, and twist it to their own ends, and quite often succeed. Take the current state of play between the parties in Britain. In March this year the Electoral Commission recommended there should be no increase in spending limits for candidates between now and the general election on 7 May. It also proposed that there should be only an increase in spending of £2.9m for the ‘short’ 3-week campaign leading up to the election. So what did the Tories do? Ignoring the official recommendations of the Electoral Commission, they pushed through increases in permitted spending twice those proposed by the Commission. This works hugely well for them because they have amassed an electoral war chest vastly greater than Labour’s, and will now be able to turn most of it to their own unilateral advantage. Continue reading

Big accountancy firms’ corrupt fiddles for the banks must be stopped

The Big 4

The evidence piles up that the private sector auditors of banks have manifestly failed in their duties. All the major banks received unqualified audit opinions from Deloitte & Touche, PricewaterhouseCoopers, KPMG, and Ernst & Young. Private sector auditors have a history of silence and are immersed in too many conflicts of interest.

The evidence is their silence at Barings and Bank of Credit and Commerce International (BCCI), as well as at other debacles. Accounting standards for banks are set by the International Accounting Standards Board, but astonishingly this is a private limited company in London funded by the Big 4 accounting firms who audit the banks and major corporations – a nice cushy cartel whereby the accountancy companies control by their funding the body that is supposed objectively to set their standards. The rules have enabled banks to publish opaque annual accounts, and vast amounts of assets and liabilities have not been shown on their balance sheets. Continue reading

Time for Labour to speak out on corporate governance

8006883_sWhilst the economic debate surges around austerity, recession and claims of recovery, it’s remarkable that next to nothing is being said about the flaws of corporate governance. As a result the dominant theme of shareholder value is accepted almost without question. Yet it is deeply compromised both in theory and in practice. Most obviously it isn’t only shareholders who bear risks or supply important inputs: both taxpayers and the workforce do. But the fundamental problem with shareholder value is short-termism. The average time that a share is held for is now measured in days.

There are several reforms needed that could diminish or eliminate the blight of short-term churning of shares or the short-termist outlook of senior managers obsessed with enhancing the share price above all else as a means of boosting their bonuses. Directors’ legal duties should be reformed so that they are required to promote the long-term success of their company as their primary aim. Ending the requirement for quarterly reporting would remove one of the key pressures that makes for a very short-term perspective. Capital gains tax should be changed to encourage long-term share ownership. Corporation tax breaks should be used to favour investment and penalise companies sitting on cash surpluses. Continue reading

Why Labour should boycott G4S as a provider of security to its conference

G4S_bloody_logoG4S is mired in scandal, but the company will provide security at Labour Party conference in September. Stop G4S campaigners Greg Dropkin and John Nicholson ask trade unionists and party members to demand Labour withhold contracts until, at least, the company pulls out of Israeli prisons and the Occupied Palestinian Territories.

During the recent UNITE Policy Conference in Liverpool, campaigners received confirmation that Labour intend to use G4S for security at Conference, as in Brighton last year and Manchester in 2012. The company’s involvement in fraud and human rights abuse is a matter of public record, sketched below. G4S is also a prime contractor for public services, with privatisation the real agenda behind the Coalition’s austerity programme. Ignoring the danger signals is an unforced error, and flies in the face of policy commitments from unions supporting Labour. Continue reading

Cable still doesn’t get the extent of corporate greed

Vince Cable, to give him credit, is the one member of the Cabinet who is seriously concerned about pay extremism in the boardroom. The rest are seriously in favour of it. But the measures he has so far put in place, albeit harried at every turn by the Tory Right, will achieve little.

He has given shareholders a binding vote at least once every 3 years on executive pay policy, and that each CEO’s remuneration package should be published as a single total. He has now written to the chairmen of remuneration committees of Britain’s FTSE-100 companies insisting they do more to curb top pay, and if they do not, then with indeterminate menace their ‘business’ licence to operate’ could be undermined. What the latter threat actually amounts to is anybody’s guess. Continue reading