When David Cameron criticised salary excesses evident among leaders of "crony capitalism" at the weekend, I thought of a recent remark made by a clever Tory minister. "What would Margaret have done?" will be a question often asked in tough 2012, he predicted.
It prompts me to wonder whether Mrs Thatcher, in her prime, would have handbagged the boss class for their evident greed rather more effectively than the coalition plans to do, at least on current evidence. Unlike Ed Miliband, I don't doubt Cameron's sincerity in wanting to clean things up, but I doubt his will or capacity.
" Don't be so daft," I hear you answer. "Thatcher was a champion of free market capitalism, the woman to blame for much of the ugly distortions and inequalities in our society."
Yes, that's true: she explicitly said she wanted the Britain of the 1970s – not a very attractive place, despite its social democratic credentials – to become a more unequal country, more like the risk-taking US.
Indeed, I heard Rick Santorum, currently a high-flying Republican candidate for the White House, say on Radio 4 the other day: "Ask Margaret Thatcher why she was never able to do to the UK what Ronald Reagan did for this country: 'the British NHS', is what she said."
That's an irony-free sentiment, all right, especially because Mrs T (as I still think of her) was a smart enough politician to grasp that she couldn't handbag the NHS after all. Clever Maggie.
But Thatcher was also a fierce moralist, raised by that Grantham shopkeeping father of hers to believe in hard work and responsibility. That credo would be difficult to square with the squalor we've all been seeing lately. And it's not just those investment bankers, who privatised their profits via absurd bonuses but socialised their debts when they crashed the car, either.
According to the Rowntree-funded High Pay Commission and other analysts, the total rewards package of directors of FTSE 100 companies rose last year by 49% – taking the average to £2.7m – at a time when average pay (for those in work) rose by around 3%, and many people's salaries (including yours and mine?) remained frozen.
Then there are the footballers and other sports stars, too – though the media soft-pedals on their greed, bankers being more (un)popular with the readers/viewers.
Did you notice that Wayne Rooney was fined a week's pay for misconduct last week? That's £200,000 by the way. Yes, I realise he scored two goals on Sunday against Manchester City. About time, too.
It's a truism that most of us don't mind people earning pots of money if they have really earned it. I doubt Scousers resent Paul McCartney his millions (well, not much). Neither do most people resent entrepreneurs who have invented great products or built great firms – the Bransons or Dysons.
But £100,000 a goal seems quite a lot. And entrepreneurial or innovative greatness rarely applies to FTSE 100 bosses, who supposedly manage big firms on behalf of shareholders who are, so we are reminded again today, mostly hedge funds and other foreign owners far more remote even than the UK pension funds that look after our little pots (or don't).
Not only is it usually hard to justify in terms of performance; it is also very opaque (even in great liberal newspapers), as well as difficult for shareholders, analysts, lesser staff and customers to work out exactly how much a CEO has actually got by way of pay – mere pay! – and how much via bonuses, share options and, of course, pension contributions (though these are not quite as outrageously tax-deductible as they were).
There was a perfect example on Radio 4's Today this morning. Some poor sod representing the supermarket chain Morrisons was asked whether the boss deserved a £5m package for what had been a pretty mediocre year's performance. "We think transparency is very important, and that isn't the right number," he replied. So what was the right number? He never told us.
Cameron has been busy since the new year polishing his credentials as a champion of fairness in hospitals and schools. It's all on the Tory website.
And his attack on crony capitalism was reiterated on the Andrew Marr show. He wants shareholders to have the power to stage binding votes on executive pay but is cool on suggestions that pay ratios (top to bottom) within firms should be published and on Labour's plan for worker representatives to sit on boards ("a gimmick", says Dave).
Ministers are consulting, and there may even be a bill in the Queen's speech. But don't hold your breath: they are already taking on the City over the Vickers report on how to make too-big-to-fail banks safer, and are trying to squeeze the more egregious tax-avoiding rackets. That's quite a big agenda. And we shouldn't pretend we don't need the City: its jobs, its expertise, its tax revenues.
Meanwhile, a succession of experts and flacks is popping up all over the media to explain that Cameron's notion that executive pay committees are full of back-scratching execs who nod through each other's bonuses is out of date. The BBC's own Robert Peston, a man who likes to ride fashionable waves (he was briefly a Gordon Brown enthusiast), is saying that only 50 FTSE 100 directors sit on other FTSE 100 boards and only 20 on remuneration committees – none reciprocally.
In other words, it's all very difficult. Don't we realise that hedge funds take a global view, and that £2.7m a year is small potatoes? Don't we understand that the market for mediocre chief execs is a global market? Just look what they did in Tokyo to that Brit who finally became the first such to head a major Japanese firm – only to be fired for exposing a big financial scam at its heart. He won't be doing that again in a hurry, and nor will any other CEO.
That doesn't mean it's not worth trying, not worth bearing down hard on them. It's not that they are all rascals: one even occasionally hears one on TV or giving an interview to the FT who really has something interesting to say, though they tend to be the entrepreneurial types, the innovators, not the apparatchiks. It's just that most of them aren't worth all that money – certainly not when their corporate performance is judged.
A chap called John Hourican, who runs RBS's investment bank division, is reported by the FT today to be in line for a £4m bonus – actually, share options with that value, as of close of trading on Friday.
This seems hard to explain, in the circumstances. RBS is being forced out of that side of the business – reluctantly, I think – and there is talk (also in the FT) of up to 10,000 more job losses. Since we taxpayers own 83% of RBS, this might be a chance for Cameron to show his mettle by signalling his displeasure.
Back to Mrs Thatcher. My hunch is that if she had swept to power in 2010 (and not, like Dave, only crawled to it) she might not have turned her firepower against the postwar quasi-collectivist ethos she grew up in and reacted against in 1979. Thirty years younger, and therefore a child of someone else's Reagan-style lurch to the free-market right, she might have seen how badly it had gone wrong and decided that she would be the person to put it right.
No: I'm not convinced by the thought, either. But it's worth contemplating. The social democratic model was under a lot of pressure in the 70s. Some were external, such as the Opec oil price rises and the emergence of Asia as a manufacturer; some were internal, such as the undemocratic excesses of the trade union shop stewards' movement, whose militancy undermined poorly run and under-capitalised companies. (Who would invest in a strike-prone, under-productive firm and pay up to 83% in tax rates, or higher for some "unearned" income, as investments were quaintly called?)
Thatcher did something about it. After a 20-year boom – the "great moderation" – the consequences of barely trammelled market power have been visited upon us. Perhaps she would have spotted the problem coming, as the Bush, Greenspan, Brown and Blair crowd (plus the Bank of England, ECB etc) did not. And maybe she would have acted sooner to head it off, in the name of responsibility and morality.
More than once, she showed the will and capacity to face down real threats from people who could do her harm – something Cameron and George Osborne have yet to do, despite December's Euro-drama, the outcome of which we await with interest. It's easy to bash town hall excesses; the big boys are a tougher nut to crack.
Perhaps Thatcher would have decided that pay boards needed honest toilers, like her old dad, Alderman Alfred Roberts, on the team to stop those execs, with their smooth manicured hands, filling their boots. Perhaps not. But after the well intentioned brutality of Phyllida Lloyd's The Iron Lady, she needs a kind thought.
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9 January 2012 11:58AM
I don't think many of us care what Mrs Thatcher would have done.
9 January 2012 12:04PM
Why are you so sure she'd have done any different? Silly bit of speculation. Also, using the phrase "what would Thatcher have done?" really doesn't justify the adjective "one clever Tory minister." Reeks of sycophantism.
The whole concept of a government wading into the boardroom is just silly and will have 0% impact. It is purely political - Cameron's PR team have got it into their heads that this will win him cheap support.
9 January 2012 12:08PM
Probably as little , and just as ineffectually as Cameron , (and little Sir Echo Clegg ) , which in the final analysis is nothing really.
The same types of entitlement obsessed people would have been bankrolling Thatcher as are bankrolling Cameron's party today.
So it is pretty safe to say she would have introduced a similar approach that was totally lacking in teeth.
Odd isn't it how the tories had breakdowns over Unions applying 'block-voting'.
Yet , they are more than happy to embrace it in regard to shareholders meetings.
The majority of shares are either Institutionally hels , or held by foreign Investors , neither category being that bothered who gets how much as long as they hack off their 'chunk of the corpse'.
Cameron ... the joke that just keeps on dying.
9 January 2012 12:19PM
Another day, another Cameron stunt for the media, never to be seen again.
Cameron wasn't in PR for nothing - well in addition to his mega-salary straight from Uni! No way he is going to bite the hand that feeds him.
9 January 2012 12:22PM
You mean what did she do? People on high incomes had 35% pay rise overnight when she changed the taxation system in the 80s.
9 January 2012 12:26PM
Obviously taxing high pay to eliminate the worst inequalities would be far too complicated, and dangerous too, because all our financial geniuses would run off to join the foreign banks that I'm sure are just gagging to have them. What a simplistic nincompoop I am...
9 January 2012 12:31PM
Funny how I'm hearing this sort of shit more and more.
That the FE203 lady would baulk at bankers bonuses and salaries, and be revolted by the MP's expenses....
Mind you I guess the atmosphere in the toilet can be revolting after a night on the beer and curry.
Style of thing
9 January 2012 12:32PM
Mrs T would have done nothing to intervene in the boardroom. The status quo is the legacy of her policies - a Britain free of both work and a future.
9 January 2012 12:40PM
She may have been a lot of things, but she was never ineffectual.
9 January 2012 12:53PM
She adored wealth and wealthy people, and wasn't fussed as to how they had acquired it. She fawned over the corporate asset strippers of the 1980s, James Hanson and Gordon White, for example, and rakish (and very right wing) multi-millionaires, such as John Aspinall and James Goldsmith, who had inherited wealth but had made a lot more themselves.
9 January 2012 1:08PM
Michael White's article talks about Margaret Thatcher's father and the influence on her life, but doesn't mention Denis.
Denis, of course, was a senior executive for Burmah Oil and was therefore very much a part of the big bonus class.
Couple that with her deep-seated 'us and them' attitude, and the idea that she would have done something about executive pay is laughable.
9 January 2012 1:10PM
The supposedly-moral Margaret Thatcher didn't seem to display much moral judgement when it came to her son and his crooked dealings, did she?
9 January 2012 1:13PM
Who gives a monkeys regarding what Thatcher `would' have done, she has been out of office for over 20 year now, and the political and financial landscape has undergone a bit of change since then, So even speculation about what she `would' have done is really quite pointless.
9 January 2012 1:16PM
Seriously?
9 January 2012 1:17PM
What's wrong with good old income tax as a means of curbing excessive board room pay?
9 January 2012 1:24PM
After the war and even in the early days of Thatcher's Government we had Business and Political Leaders who were Officers in the Forces who had a sense of morality and Leadership and looked after the Troops. Macmillan was disgusted at times with the anatagonism shown by Thatcher and her group of Young Tories like Michael SAS Portillo to the working Class. Our Leaders today come from a very narrow background of Public School, Oxbridge, and the only military contact they have are Cadet Corps like the Eton Rifles. Hence we get the selfish attitudes shown by Cameron and his Cronies and normal behaviour in the Boardrooms and City. The workers are a resource just like a company car, to be used and then dumped. Once Personnel Departments were given the American name of Human Resources the Bosses moved to First Class and the Workers to Steerage.
9 January 2012 2:06PM
Mrs T's governments destroyed british manufacturing, our coal and steel industry, hence the imbalance we have in our economy today. She also privitised our public utilities, not one of which is now owned by a British Company, despite the infrastructure being paid by Britsih taxpayers.
Still waiting to dance on that bitch's grave.....nuff said
9 January 2012 2:07PM
Thatcher worse than ineffectual.
Her effect was episodically destructive , in an escalating fashion.
The main effect of Thatcher and her policies is the economic malaise we are enmired in now.
9 January 2012 2:35PM
The economic malaise we are now in is the direct result of 13 years of Labour binging. Not once during that sorry episode did any of the party opposite make the slightest attempt to curb corporate greed. In fact, as evidenced by Blair's £12m smash and grab, they positively embraced it. Remember, the obscenity of RBS and Fred Goodwin happened on Labour's watch. It was Gordon's mate Victor Blank who destroyed Lloyds. It was the northern and Scottish miracles of Northern Rock, Bradford and Bingley and Dunfermline Building Society (Gordon's local) who needed rescuing, not the City pariahs HSBC and Barclays.
In 1979, Britain was on its knees. Bankrupted by Denis Healey and bailed out by the IMF. I still remember the rubbish uncollected and the dead unburied. Thatcher stopped that nonsense and the country is the better for it.
Just as in 1979, Labour and its apologists claim "its not our fault, it's those nasty bankers, Tories, etc.". In fact, anyone but them. Well, just as in '79, the electorate don't believe you.
9 January 2012 3:29PM
I could have sworn I had logged on to the Grauniad website. Instead, I must have typed in Telegraph Online.
A senior moment. Silly me...
9 January 2012 3:44PM
Mrs T was brilliant at reflecting the views of the average man on the street. That's why she never lost an election.
Detecting the current mood of the country over banker behaviour, she would have certainly have turned it into political capital.
Any astute politician with a ounce of principle would do the same - which is why Cameron and Co will never have the courage to take them on.
By the way, view the current Government-inspired debate over 50p income tax and cracking down on corporate greed merely as window dressing to prepare the nation for yet more announcements of HUGE banker bonuses. Nothing is going to happen.
9 January 2012 4:36PM
michael, a small point but worth making if you are to provide a more accurate analysis of 21st century capitalism. hedge funds are much more likely to be interventionist than pension funds. its part of their raison d'etre. a pension fund normally sees itself as going for low risk, long term investments whereas a hedge fund will deliberately seek to manipulate the market. hedge funds often call for chief execs / management teams to be sacked - atlho this is often to manipulate short term share price rather than out of concern for over renumeration, so its wrong to clasify them as remote.
9 January 2012 4:56PM
With these high salaries its just made corporations are even more uncaring'
In the british neo liberal communist (cartel) public funded private monopoly economy you just need to look at the number of complaints customers have
with energy companies and the like whose directors live in british stately castles
with servants
so its a fact the better paid produce a worser service
you only need to look to finacial services for the truth of it
i wouldnt waste my money phoning a business on their high charge 0845 and 0844 business numbers
i'm learning how to become self sufficient
and I'd like to know when the government will grant us all the license to make money from creating money
9 January 2012 5:26PM
Lord , are people really still posting that drivel ?
What form of policy did Blair and Brown apply to the economy ?
Who is the Politician credited with introducing those type of policies into modern British economic life ?
Complete this quote made by Blair regarding his economic policy " we are all Thatc*erites now".
Identify the point of introduction for deregulation and laisses-faire banking devoid of government interference that really created the current slump ... (let's make this one multiple choice)...
a) Thatcher's monetarist dream later followed by Blair and Brown as NewLabour toryism/Thatcherism ?
b) Thatcher's monetarist dream later followed by Blair and Brown as NewLabour toryism/Thatcherism ?
or
c) Thatcher's monetarist dream later followed by Blair and Brown as NewLabour toryism/Thatcherism ?
Identify who commenced the current fad for asset-stripping state resources until there was little left to sell so they could fiddle the numbers on their own financial record ?
and ...
Please God... explain why, how , Blair and Brown can ever be credibly viewed as the cause of a banking disaster that is world wide... a disaster that would have meant many economies would have remained totally manageable if the banks had not cocked it all up so royally.
Soon as you have a reply of substance that actually makes any sense rather than sounding like Osbourne whining in his usual bursts of 'whataboutery', post a comment worth reading.
The country is not better off for anything Thatcher did.
It was all a bloody big cock-up.
If she had worked and been all that wonderfulness in a twinset and pearls , we would pot be in the deep bloody mess we are in today.
We are in this mess because of her , not because of a couple of NewLabour half-arsed tories like Blair and Brown.
Much as I dislike them , only an idiot regards them as responsible for the world economy.
9 January 2012 5:45PM
If that's a relevant question, then a more relevant one is: what did Labour do about executive pay in its fifteen years in office, while top pay soared?
Oh, I remember now, they got 'intensely relaxed' about it!
9 January 2012 5:46PM
Will the 'Style of thing' gag ever wear thing in your eyes?
9 January 2012 6:02PM
@Michael White
She's unlikely to get that here, of all places.....
9 January 2012 6:41PM
So - Thatcher as some sort of smarter alter ego for Cameron? You're kidding! They're both dim. They both believe in neo-liberalism, don't they. How dim can you get?
9 January 2012 7:05PM
Actually, I've been wondering about that myself.
Gut feeling ?
No.
Style of thing
9 January 2012 9:24PM
Madmonty- Thatchers governments did not destroy the coal mining and shipbuilding industry in this country,
Coal production peaked at 292 million tons in the UK in 1913 and went into terminal decline long before Thatcher was even born, down to just 20 million tons by 1960. helped in no small part by the switch from steam to diesel electric - electric traction on the UK`s railways, and the switch away from coal in UK power stations, and in the grates of just about every home in the country, in order to clean up UK air quality. For sure Thatcher used the greens argument that coal was a a dirty, expensive, innefficient, polluting Earth destroying product that we had to avoid using at all costs as quickly as possible, to deliver the coup de grace to the tiny part of the coal industry still extant when she came to power.
But if you want to blame anyone for the demise of the coal industry in the UK, then blame the railways, and the greens for the major part of its disappearance.
Would anyone now want to enter an industry, that most of the world regards as a filthy polluting abomination?
As for UK shipbuilding it was destroyed by dinosaur thinking in the boardrooms and shop floor, with an added dash of restrictive trades practices, which took UK built ships right out of the world market.
Would you go into a store and buy a TV or washing machine, which was twice the price, terminally unreliable, unlikely to be delivered on time, used totally out of date 19th century technology, for the sole reason it was made in the UK? Why would you do that when you can buy ships built using modern methods built faster, cheaper, better, on time from foreign yards? But i guess its easier to just put the grey matter to sleep, and jump on the lies spouted by dinosaurs looking for a hate focus, to mask their own brainless inadequacies.
9 January 2012 9:44PM
We are in this mess because of her? Are people still posting this drivel 20 years after Thatcher left power? Like the the intervening 20 years never existed?
If people can still use convoluted mental gymnastics to blame Thatcher after 20 years, that means the country is perfectly correct in blaming Blair and Brown for at least the next 20 years for the position we find ourselves in.
Was Thatcher working Blair and Brown from behind for all the 13 years that labour were in office like they were spitting image puppets? or might Blair and Brown just be guilty of carrying out their own actions, Not sure even they would be happy to be told they were Thatchers puppets, or would that be Thatchers muppets?
Just goes to show that anyone who voted for that pair were as much to blame for the position we are in, as anyone who voted for the tories
9 January 2012 10:31PM
It's not a question of what Thatcher would do for Britain today, more a question of will Britain finally wise up to the truly awful legacy she left.
How about - rightly - blaming her for legitimising greed, political corruption and crony capitalism? Wasn't Prior, her cabinet minister, the first politician of the modern era to start the rot, sitting on the board of a newly privatised utility company?
She started the whole process which ended with the abuses of today, she opened the Pandora's box of greed and she was proud of it.
10 January 2012 12:13AM
@ledoj
mmm so am a hateful brainless dinosour am I?
Whats the matter, found someone who does not belive the hype of the Iron Lady
I note you have sidestepped the issue of the fact that our Power and water are all effectively owned by foreign companies, plus the railways, and what is left of our coal and steel industry in this country. But of course that is just free market economics at work is it not, espoused with great vigour by Mrs T.
Heseltine closed down the British Coal Board in 1991 as revenge on the NUM. British Steel was sacrificed along with most of manufacturing industry on the altar of Milton Friedmans 'Free Market Economics'.
Under thatchers government we ahd unemployment reached 3 million, not once but twice, in 1980/81 and 1989/90. I know I worked in an Unemployment Benefit Office and had to change the way we counted the unemployed 17 times under thatchers administration., only once in 1986 when the economy was doing well did unemployment officially go up.
The de regulation of the City and banks started under Thatchers regime, oh yes we had 12 major riots in the 80's.
The reason that we brainless dinosours are still posting this 'drivel', is that under Thatchers government we saw a change form Government for the benefit of thepeople of this country, to government for the benefit of those withvested interests. As far as I am concerned this includes the New Tory experimant started by Blair.
I hate Margaret Thatcher with a vengance, I saw on a daily basis what she did to to the most vulnerable people on a daily basis. As I said before on CIF, they better put the bitch under 1000 feet of concrete when they bury her, becuase I doubt I'll be alone when I go to dance on her grave.......
10 January 2012 3:28AM
Thatcher would encourage higher executive pay. Need you ask?? She would not do
anything good for the working man and woman. The Guardian should be ashamed
of promoting that horrid woman when she is hated and reviled by most people in
this country. This is not the same Guardian I read during eighteen years of
Thatcher/Major governments. It was a dire period in most peoples lives.
10 January 2012 7:57AM
Madmonty - Notice you side stepped the issue that no one (except miners) wanted to use coal anymore, because (Mainly thanks to the emerging greens) it was pointed out that its use in power stations/ railways/homes was causing severe atmospheric conditions in the UK (remember the Clean Air Act?)
Why would anyone want to continue producing a product that most of the world began to regard as a filthy polluting, innefficient Earth destroying abomination?
Would you go into the mud hut manufacturing industry today? if not why would you go into coal mining, it was dead duck already. All Thatcher did backed fully by the greens, was put it out of its misery
Coal was a product well past its sell by date in 1960 let alone when Thatcher got into N010, but why let reality get in the way of your argument?
This Governments of the UK can only pay for public sector services AFTER it has taken tax income off the private sector. The tax public sector workers pay is only re gurgitated tax it is not new money. I would be the first to state the public sector is provides services we must have, but it can only exist if the private sector is able to the taxes which pay for the services. If the private sector is reduced, ther can be no sound argument for saying that the public sector must not also be reduced proportionally. because the private sector pays for the public sector, not the other way round. if we let the public sector grow, whilst the ptivate sector is shrinking we end up with 50 public sector workers trying to ride on one private sector donkey!
For sure Thatcher started de regulation of the banks, but labour had 13 year in office with a complete majority, why didnt they do something to correct the situation? Blaming Thacher when Blair and Brown not only didnt do anything but made the situation much worse, by selling off the UK`s gold reserves, mainly to the French (any idea which nationality is buying a lot of our utilities?) raiding private pensions, and giving cash away remember Blair gave away £4billion a year (every year from now on) into EU coffers on top of the billions we were already paying into the EU for absolutely NOTHING, when you have a government like that you dont really need enemies.
If you believe we ever had a government for the people, I would love to know what country you live in, because it certainly wasnt the UK. Up till recently the gap between the haves and have nots has never been closer, But still if like labour you allow unfettered immigration, by people who come here who want to work, you can hardly be surprised if a lot of the indigenous population brought up in a benefits culture lifestyle cany compete, and find themselves even more locked out of whatever jobs might be available.
I dont think much of the tories, but by God I hate labour with a deep intense loathing what they have done to the UK.
10 January 2012 9:42AM
You mean for the executives at the FTSE 100 multinationals that aren't resident in Switzerland, USA, Monaco, Jersey etc ??
For most FTSE 100 companies, probably less than half of the Board are UK tax resident and for FTSE 100 executive directors, possibly even fewer.
A lot of the commentary on this issue has been uninformed or plain wrong - such as the IDS 49% "rise" in executive pay (it averaged the average increases, skewing the data), the notion that execs sit on each others remuneration committees (Manifest's data showed this to be a total myth).
The PM has been misdirected by those shouting the loudest (also being those who are the most uninformed it seems) and the result will be ineffective regulatory change that will do little to change the problems of the existing exec pay system.