CABLE'S ATTACK ON CAPITALISM; after Clegg's Threat to Bank Bonuses, Business Secretary to Announce Inquiry into 'Murky World of Corporate Behaviour'; Capitalism 'Kills off Competition'

Daily Mail (London), September 22, 2010 | Go to article overview

CABLE'S ATTACK ON CAPITALISM; after Clegg's Threat to Bank Bonuses, Business Secretary to Announce Inquiry into 'Murky World of Corporate Behaviour'; Capitalism 'Kills off Competition'


Byline: James Chapman Political Editor

VINCE Cable will today declare war on fat-cat company directors and hostile takeovers in an aggressive assault on the excesses of capitalism.

The Liberal Democrat Business Secretary will announce a wide-ranging Government inquiry into the 'murky world of corporate behaviour'.

Using astonishingly hard-hitting rhetoric, Mr Cable will tell his party's annual conference: 'Capitalism takes no prisoners and kills competition when it can.' He will reveal that the inquiry will consider measures to allow shareholders to rein in executive pay, limit the scope for takeovers and end a culture of 'corporate short-termism'.

His broadside comes against a backdrop of rising discontent among senior Lib Dems against the fat-cats.

Yesterday, Deputy Prime Minister Nick Clegg signalled that the Government is ready to impose new levies on banks and City bonuses.

As news of Mr Cable's speech circulated last night, the Business Secretary insisted his Leftwing tone was not an 'outbreak of Marxism'. In his keynote address, which aides said had been cleared by Downing Street, Mr Cable will say the Government will not adopt a traditionally Conservative laissez-faire attitude to business.

'Let me be quite clear. The Government's agenda is not one of laissez-faire.

Markets are often irrational or rigged,' he will declare.

'So I am shining a harsh light into the murky world of corporate behaviour. Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees? 'Why do directors forget their wider duties when a fat cheque is waved before them?' A source close to Mr Cable said he believed in 'free-market capitalism', but added: 'There is a general problem at the heart of capitalism. 'Shareholders are not in control.

They don't necessarily know what their companies are up to.'

The source said Mr Cable's inquiry would not consider whether or not levels of executive pay are fair.

Instead, it will examine whether bonuses or 'golden parachute' deals for bosses run contrary to the best interests of the firm, shareholders and employees.

'It's going to be asking the question: does executive pay as it is structured provide the sort of incentives that shareholders, if they knew about them, should be concerned about?' said the source.

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CABLE'S ATTACK ON CAPITALISM; after Clegg's Threat to Bank Bonuses, Business Secretary to Announce Inquiry into 'Murky World of Corporate Behaviour'; Capitalism 'Kills off Competition'
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