Curbing the worst excesses of executive pay was supposed to be something the Lib Dems could claim as their own. Vince Cable, their secretary of state with an economic portfolio, was meant to be the man to do this. It should be a good news story both for the government and for Clegg’s party – Andrew Hawkins is excellent here for Total Politics on just how much the public are worried about this and want something done about it.
The consultation on executive pay closes today, with legislation expected in late June. Crucially, though, the Financial Times reports that Cable has had to back down on one of his key measures – the so-called ‘supermajority’ of shareholders who would be required to approve company pay policies. As I reported back in January when Cable announced his proposals to the Commons, greater powers for shareholders was right at the heart of his plan. Now, it would seem that the heart is to be ripped out after ‘opposition from investors and business leaders’, as the FT puts it.
Even before Cable made his announcement to Parliament, all was not quite well – he ended up making the statement a day early after an urgent question from shadow business secretary (and current TP cover star) Chuka Umunna brought him to Parliament rather than revealing Cable revealing his plans in a speech the following day.
This chimes with a more general feeling among Lib Dems that Cable isn’t pulling his weight at BIS. David Cameron isn’t the only one experiencing chatter about his grip on his party – Nick Clegg is too. Backbench Lib Dem MPs talk of Tim Farron or Vince Cable as hypothetical replacements, more out of a lack of alternatives than because either has distinguished themselves as a viable future leader. Lords reform is currently the only live legislative issue the Lib Dems can truly claim ownership of. By watering down the executive pay proposals, Vince Cable has let them - and the 64% of people who think it is 'immoral for people running large companies to be paid millions of pounds' - down.