S E R V I C E

FACT S E R V I C E

149 Executive pay goes on rising in the recession

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150 Age-friendly employers are recognised Friends of the Tories and their spending cuts

152 Helpline is launched on pay and work rights Weekly earnings data barely rise in July

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Executive pay goes on rising in the recession Pay freezes. Unpaid leave. Mass redundancies. For many workers, the past year has been one of insecurity. And for those lucky enough to hang on to their jobs in the recession, wage increases are getting stingier: average earnings in the private sector were rising at 3.1% year-on-year at the end of 2008,and the rate slipped to 2.1% (including bonuses) by this summer. But the recession has passed by the door of the boardroom of the UK’s top 100 companies, according to the Guardian’s annual survey of executive pay. Executives at Britain’s top companies saw their basic salaries leap 10% last year, despite the onset of the worst global recession in decades. And the pay and benefits bill for the full- and part-time directors of the FTSE 100, the premier league of British business, came to more than £1 billion. The Guardian data also shows that a clique of elite bosses at the helm of multinational corporations are seeing their overall pay packets soar ever higher. The 10 most highly paid executives earned a combined £170 million last year — up from £140 million in 2007. Five years ago, the top 10 banked some £70 million.

Who is backing the Taxpayers' Alliance? Teachers' campaign targets BNP governors

Volume 71, Issue 38, 24 September 2009

Brendan Barber, general secretary of the TUC, said: “The recession has done nothing to stop the gap between top directors and the rest of their staff getting wider every year. “It is even more offensive when the Institute of Directors has called for spending cuts that would hit pensioners, the poor and low-paid public sector staff. We’ve already had the 1980s-style recession, it looks depressingly like we are going back to 1980s greed-is-good politics, too.” The highest paid boss last year was Bart Becht, the chief executive of household goods group Reckitt Benckiser, whose brands include Harpic, Veet and Strepsils. He was rewarded with £36.8 million in pay, bonuses, perks and share incentive schemes — that was almost £8 million more than Aidan Heavey of exploration company Tullow Oil in second place. Chip Goodyear of mining multinational BHP Billiton ranked third on £23.82 million. Goodyear retired last year and cashed in his longterm incentives and share options. No woman appears in the top 20 listed over. The top earning woman was Cynthia Carroll, chief executive of mining multinational Anglo American, who received a total of £3.98 million. She beat Linda Cook of oil giant Royal Dutch Shell into second place with £3.88 million. Third spot went to Marjorie Scardino, chief executive of media group Pearson, who received £3.79 million.

LABOUR RESEARCH DEPARTMENT

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Fact Service Top 20 highest paid executives 2008

Name

Company

Bart Becht Aidan Heavey Chip Goodyear Sir Martin Sorrell Bob Diamond Stanley Fink Trevor Reid Arun Sarin Santiago Zaldumbide Graham Martin John Pluthero Jean-Pierre Garnier Frank Chapman Paul Pindar Matthew O’Donoghue Sir Terry Leahy Mike Turner Brad Mills Manny Fontenla-Novoa Jeroen van der Veer

Reckitt Benckiser Tullow Oil BHP Billiton WPP Barclays Man Group Xstrata Vodafone Xstrata Tullow Oil Cable & Wireless GlaxoSmithKline BG Group Capita Tullow Oil Tesco BAE Systems Lonmin Thomas Cook Royal Dutch Shell

Total salary £m 36.76 28.84 23.82 19.71 17.48 15.38 15.34 13.75 12.56 11.44 10.63 10.33 10.10 9.86 9.21 9.11 7.22 7.20 7.04 7.02

www.guardian.co.uk/news/datablog/2009/sep/14/executive-pay-bonuses-pay www.guardian.co.uk/business/series/guardian-executive-pay-survey-2009

Age-friendly employers are recognised Three British companies are amongst the winners of the prestigious AARP International Innovative Employer Awards for age-friendly employment practices this year. The three are telecoms group BT, utilities group Centrica and insurance group Domestic and General Services. The British firms are amongst 10 employers from four different countries that have been selected for their ground-breaking workplace policies and practices. Other firms include employment agency Adecco Employment Services in Canada, and the German car group BMW. The AARP is a US-based, non-profit organisation representing nearly 40 million older Americans. Its International Innovative Awards programme is designed to promote imaginative human resource and workforce practices around the world. Key areas for consideration include: recruiting practices; opportunities for training, education and career development; workplace accommodation; alternative work options, such as flexible scheduling, job sharing and phased retirement; employee health and retirement benefits and retiree work opportunities. Thomas C Nelson, the AARP’s chief operating officer, said that the awards focused global attention

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on the need to retain mature and experienced employees to keep a competitive edge in the marketplace of the 21st century. He added: “It appears the recession has deepened the impact of damaging stereotypes. Fortunately, our winners today have shown us a better way. Instead of being trapped in narrow thinking, they’ve given us a window and a way to success. They offer a roadmap to a modern workplace that is fair and flexible, a workplace that recognises the contribution of experienced workers." Chris Ball, chief executive of the UK not-for profit organization The Age and Employment Network, said that there are many companies that are not currently addressing the challenges of workforce ageing, but there are others which have discovered a real business advantage in doing so. “The challenge of helping workers age successfully is being taken up by leading edge companies and individuals who see the potential gains. They have responded with innovative spirit and in some cases, real panache. We strongly encourage more UK employers to step forward, apply for the 2010 awards, and be recognised for their industry-leading employment policies,” Ball said. http://taen.org.uk/media/view/62

Friends of the Tories and their spending cuts Two organisations, whose members are natural Conservatives, have called for £50 billion in cuts in its public spending plan. The Taxpayers’ Alliance pressure group and the business lobbyists the Institute of Directors propose abolishing Surestart and child benefit, and imposing a one-year freeze on the basic state pension and on all public-sector pay except for the army. The joint report proposes £42.5 billion of annual savings for 2010-11 and £7.5 billion savings in the years thereafter. “Unless fiscal tightening efforts are sufficiently credible, interest rates on government debt could increase to unsustainable levels and sterling could undergo further dramatic falls,” it says, also claiming that Britain will have a structural deficit of between 10% and 12% of GDP in the next financial year. The authors say the government cannot afford simply to wait for public service reforms to

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Fact Service

increase efficiency; the deficit has to be cut now through immediate spending reductions. A freeze in the basic state pension would save £1.44 billion, while these two organisations of the rich think the free TV licence for pensioners aged over 75 can go to save £564 million a year. They are also targeting the free bus pass for the elderly and disabled leaving it only for “those who genuinely need it” to make an annual saving of £438 million. A one-year freeze in the pay of all public-sector workers would save £6.2 billion says the report. Other suggested cuts include a 10% drop in nonfrontline staff in health and schools at a saving of £921 million and a 10% slice from the civil service worth £1.2 billion. Savings of £8.4 billion could come from taking welfare from the middle class, including abolishing child benefit. www.guardian.co.uk/politics/2009/sep/10/child-benefit-tory-spending-cuts www.taxpayersalliance.com/50bil.pdf

Who is backing the Taxpayers’ Alliance? Tom Powdrill, an ex-TUC official now working for a corporate governance consultancy, has researched the backers of the pressure group the Taxpayers’ Alliance for his blog. He has cross-referenced them with the register of political donors maintained by the watchdog the Electoral Commission. And with calls for cuts in public spending (see the story above) it is no surprise that they back the Conservative Party with big cheques. The list includes individuals listed by the Taxpayers' Alliance as supporters and also companies they are connected with. But some alliance supporters have transferred their affections to United Kingdom Independence Party (UKIP). Harris and Sheldon has recently given UKIP £5,000 and Stuart Wheeler has also moved into the UKIP camp to the tune of £128,000 this year. Other alliance supporters with UKIP links include economist Tim Congdon, founder of economic forecasting group Lombard Street Research, who has since left the party and reportedly rejoined the Tories. And Lord Pearson of Rannoch is favourite to become UKIP leader now that Nigel Farage has announced that he is standing down.

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Individuals

Conservative donations (£) 1

Stuart Wheeler Sir Tom Cowie Lord Kalms David Ord Sir Mark Weinberg Patrick Evershed Lord Chadlington Gerald Wakefield Grahame Berkeley John Leavesley Michael Heller Sir John Craven John Hoerner Damon de Laszlo Gerald Kaye Kambiz “Kim” Jaberi Gary Mond Rocco Forte John (Lord) Taylor Sir Michael Cobham Malcolm McAlpine AR Tanner Margot James Lord Vinson

3,933,300 661,250 557,745 196,224 158,750 139,594 48,823 39,500 35,000 31,000 30,000 26,084 22,524 17,001 15,000 14,850 10,250 10,000 8,600 6,500 4,000 3,250 2,500 2,000

Companies

Industry

Flowidea JCB Research/JC Bamford David Ord Slough Estates Caledonia Investments Harris & Sheldon Berkeley Burke Air Foyle Sir Robert McAlpine Helical Bar Lowe & Fletcher Huntsworth Sir Rocco Forte Ltd Dunalistair Estates Leavesley Group/JT Leavesley Midland Chilled Foods

finance 1,052,683 construction equipment 702,509 docks 140,000 property 106,000 finance 98,000 engineering 91,000 finance 53,863 transport 26,500 construction 22,500 property 22,000 engineering 20,200 communications 12,100 hotels 10,000 farming 6,917 vehicle dealers 5,750 food 3,000

1

Total cash donations from February 2001

http://labourandcapital.blogspot.com/2009_08_01_archive.html

Teachers' campaign targets BNP governors The NASUWT teachers’ union has extended its campaign to prevent members of the British National Party (BNP) from working as teachers to include banning BNP members from serving on governing bodies. The union has also taken legal advice and is poised to seek a judicial review under the provisions of the Race Relations Act 1976 regarding the role of any BNP councillor serving on a governing body. General secretary Chris Keates has written to all lead members for local authority children’s services reminding them of their duties under the

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Fact Service

race legislation, urging them to ensure that they are compliant with its provisions and to take steps to protect children, young people and staff from exposure to the BNP’s vile agenda. Letters have also been written to the Local Government Association, the National Governors’ Association and to the schools’ minister, Vernon Coaker, requesting them to issue appropriate advice to their constituent bodies. “The BNP is cynically using and abusing the local and national democratic process in an attempt to promote and legitimise its vile agenda,” Keates said. “The veil of respectability the BNP seeks by fielding candidates in national and local elections should not be allowed to distract people from the danger this organisation poses." The NASUWT has already been alerted to one case in the East Midlands where a BNP councillor may be set to become a vice-chair of governors. “The NASUWT has taken legal advice and it is clear that local authorities and school governing bodies are potentially vulnerable to judicial review if they have members of the BNP on their governing bodies,” Keates said. www.nasuwt.org.uk/Whatsnew/NASUWTNews/PressReleases/NASUWTCallsForBanOnBNPServingOnGoverningBodiesAndWarnsOfLegalAction/NASUWT_004916

Helpline is launched on pay and work rights The business, innovation and skills department has set up a single helpline to give employees and employers advice on basic employment rights. The helpline number is 0800 917 2368. The Pay and Work Rights Helpline will give advice on five areas: the national minimum wage, the agricultural minimum wage, the working time directive, employment agency standards and the licensing of gangmasters. The helpline is aimed at vulnerable workers, but can also be used by employers who need clarification on employment rights. Business minister Pat McFadden said: “By consolidating the current complex system of different helplines for different issues into one single number we are making it easier for workers to report abuses and for government to respond. We

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are determined that the recession does not become an excuse to deny people their basic rights at work.” TUC general secretary Brendan Barber, welcoming the launch, said: “This vital new helpline will ensure workers at risk of mistreatment by their employers not only have a phone number that they can call to find out about their rights, but they can also ask for help in enforcing these rights. “Everyone has the right to work in a safe and harmonious workplace and the easiest way to secure a better deal at work is joining a union. Union members are better paid, less likely to have an accident at work and are more likely to be offered the chance to develop professionally.” www.bis.gov.uk/new-pay-and-work-rights-helpline www.tuc.org.uk/newsroom/tuc-16997-f0.cfm

Weekly earnings data barely move in July Average weekly earnings for the whole economy showed a minute 0.2% increase in July, according to the latest figures from the Office for National Statistics (ONS). Public sector earnings showed the biggest sectoral annual rise at 3.2%. Meanwhile, the private sector saw earnings fall year-on-year, mainly as a result of a fall in private services and manufacturing earnings. Estimates on a sector basis are shown below. The figures are still an “experimental statistic”, the ONS says. Unlike the uprated occupational figures from the Annual Survey of Hours and Earnings, produced monthly along with the average earnings index figures, the figures cover part-time as well as full-time workers. Average weekly earnings — July 2009

Whole economy Private sector Public sector Manufacturing Services Private services Production

£ a week

% rise

438.70 434.10 454.70 498.20 424.10 414.10 517.40

0.2 -0.7 3.2 -0.4 0.3 -0.9 0.2

www.statistics.gov.uk/StatBase/Product.asp?vlnk=14015

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