What should we do about big business?

There is a notable anti big business mood in the advanced world’s political winds. In the USA both Mrs Clinton and Mr Trump wish to see major changes to the behaviour of large corporations. Mrs Clinton wants to regulate them more, intervene more in health care, and tax them more. Mr Trump wishes to limit their access to cheap migrant labour, and proposes a big tax reform which he hopes will combine lower rates with getting them to pay more and to repatriate offshore cash.

The EU is ever keen to regulate them further . It has already put through controls on bonuses in the financial sector, numerous rule increases on banks, and a blizzard of new laws on everything from the environment to employment. Both the EU and the US authorities are keen to increase tax revenue by tightening tax rules, and keen to fine businesses for wrong doing as another source of revenue for the government.

In the UK the Labour party has moved strongly against companies and capitalism generally, proposing a range of new controls, interventions and nationalisations. Mrs May has been the most balanced of all these actors and actresses, but she too is saying that companies that misbehave over employment or tax should expect tough treatment from the state.

So what has business done wrong? Big business has allowed spectacular failures to disfigure its central contribution to progress and better lives. In an era when business has delivered us the internet, mobile communications, better personal transport, a range of labour saving devices for the home and office and record living standards, there has been a steady drumbeat of disaster or dubious practises from some corporations. We have witnessed the oil spill in the USA, the emissions scandal from VW, employment issues from some UK retailers, pension problems at BHS, tricky tariffs from utilities, lack of customer awareness and a financial crash from banks,and poor broadband in various locations. This has been made worse by a perception that a gilded business elite of executives who do not own their companies think they have the right to huge seven figure sums in remuneration just for being good at corporate politics. They enjoy over the top pay without necessarily delivering the better service or product for customers that might deserve such fabulous rewards. Much of the drive to better and new products and services comes from exciting challenger companies run by people who own and run entrepreneurial businesses.

The public does distinguish between entrepreneurs and company executives or corporate politicians. If someone risks their own money and reputation and builds a big business, they can enjoy great income and wealth as a result. It is someone who is good at corporate climbing, who inherits the success of past generations of executives and shareholders, who needs to exercise some pay restraint and to put the needs of customers and shareholders first before their own vaunting financial ambition.

Changing this culture without driving jobs and business away is not easy, but it is a necessary task. I would be interested in your ideas on what should go into an industrial strategy.


  1. The Active Citizen
    October 11, 2016

    This has been made worse by a perception that a gilded business elite of executives who do not own their companies think they have the right to huge seven figure sums in remuneration just for being good at corporate politics.

    How refreshing to hear this from a senior politician. In many years of doing business with companies large and small, it’s so true. The ones who impressed me were those who had built their businesses – most of the others just talked a good game on their way up the corporate ladder to perkdom.

    JR, this is a cultural thing. It’s connected with the absurd creation of new ‘realities’, thanks to soft education and social media. I’ll write again with some constructive and practical ideas for a business strategy which could reverse the trend.

  2. Richard1
    October 11, 2016

    The main role government can play in ensuring business does not impose cost on society for its own benefit is to ensure markets are not rigged by collusion amongst monopolies. We see this eg with broadband infrastructure provision where, bizarrely, all the large govt subsidies are paid to one company, BT. The supposed Chinese wall between the two parts of BT serves only to ensure pesky customers cannot actually speak directly to Openreach!

    Regulatory capture by big business is another example – and a risk of too much regualation as leftists – and now Mrs May it seems – would do well to note. The VW scandal was an example of this – regulatory capture by the green blob.

    For executive pay the best cure is transparency and clear shareholder control. For that the Swiss system of mandatory shareholder approval every year is an excellent idea, and one which may appeal to Mrs May.

  3. Mark B
    October 11, 2016

    Good morning.

    What is, “Big Business ?”

    People do not seem to understand that it is the duty of those in business to seek the best return for that business and its owner(s). That is not just in terms of profit but also market share. So all they are doing is there jobs.

    The issue that I have is, State funded corporations, trusts and charities acting like business but not subject to the same risks. Many have been many have been mentioned here. So when will the government start to crackdown on the abuses of these I ask ?

    1. Lifelogic
      October 11, 2016

      Indeed as you say “state funded corporations, trusts and “charities” acting like business but not subject to the same risks”.

      Indeed, the state often provides totally unfair competition to the private sector using tax payers money. The NHS, education, social housing being three areas where the market is damaged hugely in this way with generally harmful effects. There is a huge lack of real competition in banking too.

      The government have a competition authority but they studiously ignore all this massive and damaging market manipulations by government.

    2. Hope
      October 11, 2016

      Make CEOs and directors personally liable for bank balance sheets and losses. No need for further regulation when they must accept responsibility for their actions.

      MPs need to also be held to account for their actions, self policing does not work. In 2009 the public was promised reform and got a meaningless watered down right to recall which the MPs police! (NAmed individual ed) would be out of office in any large business or public sector body for bringing the company or organisation into disrepute. There is no accountability for improper behaviour and greed of MPs and ministers. Referenda is the only way forward because politicians cannot be trusted. H o L is now a club of people given a wage for life on the taxpayer without providing any useful service. There is No need for the large number we have- the second highest number to China!

      Personal accountability is the key to behaviour in any organisation..

    3. CdBrux
      October 11, 2016

      Some, of who we read about, of these businesses also need to remember that seeking the best return must be done in a way considered acceptable by the population who, if motivated enough, may choose not to buy the companies products if there is another alternative.

      I for example would always prefer to seek out an independent café in the high street vs a big chain. Yet the big chain has huge advantages amongst which they probably pay rather less tax as they can, legally, find avoidance methods. To be clear I have no issue against legal tax avoidance (as opposed to illegal evasion) – however I do think the law should, as much as practically possible, provide for a more level playing field to allow those challengers in. Surely that is how a free market is meant to work rather than the form of corporatism we have today? Not easy to secure in a globalized world but it feels like more could be done.

    4. getahead
      October 11, 2016

      “What is big business?”
      Big business is any company that gains fiscal advantage from EU membership.

  4. Gary
    October 11, 2016

    It’s easy. Get the govt out of business. Govt – corporate partnerships tend to be monopolistic, they are both under written by taxpayer money there is an incentive to even use the armed forces to secure their markets, they get rates the rest of us cannot access and its jobs for pals, Corporates lobby govts for favourable laws and in turn politicians get guaranteed corporate jobs.

    Get the govt out of business!

    1. Lifelogic
      October 11, 2016


  5. Lifelogic
    October 11, 2016

    Indeed and they politicians as usual are wrong to attack business and indeed to endlessly attack landlords. It is as always nearly always government that is the problem.

    Take for example May’s childish attack on people who take large dividends out of companies then leave the pension fund short. Well who set up the tax regime that separated people for their pension fund investments in this way in the first place? Why do the rules and pension regulator allow companies to legally to this? Why are annuity rates so artificially low? The fault lies with government incompetence at usual.

    Businesses have to operate in a competitive environment they compete or die within the rules that pertain.

    The banking crash in the US was also very largely government generated. As Matt Ridley and others have pointed out.

    I would hugely decrease red tape, but make sure that the rules that do exist sensibly address some issues such as this one. I would give far more power to shareholders to control executive pay properly. So many executives are able to enrich themselves, while decreasing shareholder value and running the businesses themselves into the ground.

    Theresa clearly just want to push more daft red tape such as workers and customer on boards, gender pay reporting, wage controls, stakeholder pension and other damaging nonsense onto them. It is all counter productive, renders them less competitive and pushes jobs overseas.

    If we had some sensible, pro business, free market leadership the pound would be rather stronger than it is. Alas we have an interventionist, economically illiterate, ex-remainer and geography graduate with a penchant for silly shoes. Whose speeches seem to be addressed at dim ten year old’s.

  6. The Prangwizard
    October 11, 2016

    It is of course a case of ‘we are where we are’ but we have got to it in main I think from an overzealous zeal to regulate. Things will go wrong in business and with products. Once it was the market and the law which regulated. Today regulation is considered as an automatic requirement and government takes the easy option of bowing to public pressure to intervene.

    Businesses regulated in one area are forced to find another way to make money and it becomes a chasearound.

    It would good if we could get more balance.

  7. Lifelogic
    October 11, 2016

    I see that a young widow has tearfully demanded an inquiry into how a psychotic man was free to kill the father of her newborn baby days after knife and assault charges against him were dropped.

    She is quite right. I know personally of two situations where people (who are clearly suffering from severe mental health problems) had both used knives to threaten to kill people over a long period of time. The police and authorities did nothing significant in either case. It seem to be the authorities standard approach. Just to wait for an actual murder or stabbing before doing anything significant at all.

    Oh he/she was just not taking their medication properly but they will now, so that is alright then!

    1. Dame Rita Webb
      October 11, 2016

      Its down to savage cuts in mental health care the cinderella part of the NHS. In the meantime my other half has spent around 12 hours preparing their annual assessment. Another few hours will be wasted with a colleague going through it. It will then be filed away and forgotten about. The main purpose of the exercise is prevent another Shipman. You do not need to be Sherlock Holmes to work out that Shipman got away with it because he was working by himself. An unlikely event in for a doctor working in a busy hospital. Until Hunt gets a rid of pointless exercises like this the NHS will not improve despite what the management consultants tell him. However it does give the grade z management something to do in the meantime.

    2. Hope
      October 11, 2016

      Sadly This is a daily occurrence. The govt does not provide adequate punishment for any offence or any type of offender. The public would be scared witless if it knew the sort of people let out in the community, the reality is to save costs. Criminals inflicting personal violence in any crime should be harshly punished.

      1. Denis Cooper
        October 11, 2016

        Are there now any secure places to put those mental patients who may not have committed any serious crime, yet, but are clearly a serious danger to others? There used to be , but I think most if not all of them were shut down.

      2. Lifelogic
        October 11, 2016

        Certainly my impression is that the powers that be, have decided that these deaths, cause by people with mental health issues, are a price worth paying. This so the state sector does not have to treat or detain people who are dangerous. The number of such murders is around one a week I understand. Very often everyone who knew the person (and all the authorities) had known they were a very serious danger for years, but had done nothing substantive at all.

    3. The Prangwizard
      October 11, 2016

      Trouble is, it’s all about rehabilitation. With a few high profile cases where criminals are locked up to the end of their days to fool us into thinking the authorities are tough, the rest are given all manner of help with an army of sympatisers to plead their cases often at public expense. The victims families are left to do the real suffering.

      It’s time we started getting harsh again and introduce a punishment regime for all crime.

  8. Lifelogic
    October 11, 2016

    What should go into an industrial strategy?

    Well low simple taxation, cheap non greencrap energy subsidies, cancellation of white elephant vanity projects such as HS2 & Hinkley, some new runways, better roads, lower simpler taxes, far smaller government, a bonfire of red tape (but better designed rules & laws & only where really needed), a relaxation of planning, less intellectual property protections (they are too restrictive, too costly and do more harm than good). This and a PM and Chancellor with a working compass for a change, we shall see shortly if Hammond is as misguided as his boss clearly is.

    1. Dame Rita Webb
      October 11, 2016

      No need for legislation if you do not like the business do not give it your patronage. I go out of my way to avoid anything thats uses the brand of one self made entrepreneur cum self publicist. However JR, even if they are the more expensive, I will always use one of the key shops that belongs to the family of one of your learned friends because of their charitable endeavours.

    2. CdBrux
      October 11, 2016

      I do not think less IP protection will be very helpful. It’s my understanding that, by being one of the first countries to have an IP system, UK was a leader in the industrial revolution as inventors got the rewards for their enterprise and risk taking so they were more prepared to have a go and innovate at personal expense.

    3. Lifelogic
      October 11, 2016

      And as misguided as Osborne clearly lifwas!

  9. Gary
    October 11, 2016

    The west’s mercantile model of business is finished. The days of plundering third world resources at the barrel of the gun and forcing fiat money down their throat has become untenable, if not completely immoral. In the days of relatively cheap missile technology even aircraft carriers are sitting ducks, and countries like china are trading by cooperation not war.

    See the new silk road infrastructure, for example. The eurasian century is now unstoppable :


  10. @JagPatel3
    October 11, 2016

    It is the job of Government to foster an environment which causes the Private Sector to innovate, grow, create jobs and make a profit. It is not the job of Government to create jobs.

    It is the misinterpretation of this responsibility, on the part of some well-meaning people that has persuaded them to resuscitate the idea of an Industrial Strategy, which entails the Government intervening in the market with public funds, to stimulate economic activity and boost export-led growth.

    However, this means that people in the pay of the State get to choose which industry sector receives the subsidy, and which does not – leaving them exposed to the charge of favouring the privileged few at the expense of the many, and also skewing the market in favour of the same selected few, for decades to come.

    Additionally, there exists an extremely high risk that public funds committed in this way will not deliver the return on investment as advertised, or worse still, squandered altogether because:

    (a) Civil servants in Whitehall who are charged with negotiating the contract details are ill-equipped to deal with the Private Sector, which means that they will be duped into spending taxpayers’ money on poorly conceived projects – only for this to come to light years later, when some Select Committee of the House of Commons produces a report on its findings.

    (b) The internal business process used to select recipients for State aid is susceptible to manipulation and distortion by parliamentary lobbyists in the pay of those who can afford to spend the most.

    (c) It is certain that the final decision on the choice of recipients, which is in the hands of the governing elite, will be made not in the national interest but to serve the interests of professional politicians.

    So until these fundamental problems are addressed and dealt with, the Government should be wary about resuscitating an Industrial Strategy.

  11. eeyore
    October 11, 2016

    Why is public wrath focused on business pay packets? Unless we’re shareholders it’s not our money and – literally – not our business. For my own part, it gives me great pleasure to see people do well for themselves. I grudge them none of their success.

    But what about charity executives with their £250,000 a year of accumulated widow’s mites? Money’s hard to make and very easy to spend, and at least business produces something. Who has charity shares in their pension pot?

    I’ve given up donating to pompous giant charities with pompous overpaid chief executives (who coincidentally so often have links with the Labour Party).

  12. Gerry Dorrian
    October 11, 2016

    Labour was against business generally in national contexts, but rushed into the arms of globalised big business, which employs practices Adam Smith wouldn’t recognise as capitalism and whose embrace Margaret Thatcher would have avoided like the plague, as would Callaghan or Attlee. With the referendum we’ve taken a first step away from globalism and we must be willing to face its abuses of employees and customers down within our shores.

  13. Mick
    October 11, 2016

    I see sky/BBC and some anti leave papers are still giving scare stories about leaving the eu, there now pushing the line that it’ll cost us 66 billion a year when we leave, and this information is based on Osbornes figures ?
    After watching the debate yesterday on the eu is there any chance of a list of all MPs who are after a vote on Brexit, because no matter how you dress it up they are after trying to stop by any means us leaving the dreaded eu

    1. a-tracy
      October 11, 2016

      I disagree Mick I think they want us out of the club now, but trapped in by their rules with no say, but still paying up for everything and still following all of their anti-competitive rules and paying their CAP.

    2. Man of Kent
      October 11, 2016

      Hear, hear !

      We want to know so we can start moves for de-selection or form a cross party coalition to get rid of them at the next election as being un -representative .

      There would be a 200 seat majority for Leave in Parliament had the referendum been run on a FPTP general election basis

    3. Denis Cooper
      October 11, 2016

      At worst misinformation, at best partial and unreliable information.

  14. David Murfin
    October 11, 2016

    Put someone in charge of the economy who knows how to make strong ceramics by inhibiting grain growth.

  15. formula57
    October 11, 2016

    Part of industrial strategy should see fostering entrepreneurship. We might have “Silicon Fen” and the Golden Triangle etc. and innovation parks and the like and we have had New Labour’s Mandelson telling us we need a new attitude to business failure but we have very much further to go, some success though we might have witnessed. Now (or apparently soon) we are free of course from the restraints of the EU, we can act with complete freedom if only we can devise a plan as part of our industrial strategy. Perhaps a repeat of the Industrial and Commercial Finance Corporation (now the private equity investor and venture capitalist 3i Group plc) would be a good measure?

  16. Action not Rhetoric
    October 11, 2016

    It would help if industry adopted and publicised some genuinely moral ways of going on. Some examples would be priority to indigenous workers, training programmes for indigenous workers, environmentally responsible sourcing and practice food sourcing which supports high animal welfare. The key is integrity. Good practices all very well but they have to be kept up, no lapses just for self gain or interest.

    1. Handbags
      October 11, 2016

      They’ll go bust if they do that.

      No one will risk their own money to follow someone else’s crackpot agenda.

      Why not do it yourself? Show us how it works and then maybe we’ll all follow suit.

    2. getahead
      October 11, 2016

      It would also be interesting to know why because surely they are themselves far too sensible to believe their own project fear propaganda.

  17. hefner
    October 11, 2016

    A very balanced analysis. Thanks.

  18. JimS
    October 11, 2016

    Perhaps we could start by insisting that all boards have non-executive directors and that they hold no other directorships? Directors should be salaried and not gifted shares/options which encourage them to manipulate share prices, not necessarily to the benefit of the company or other shareholders.

    The regulators need regulating, (better still eliminated), they certainly don’t work to benefit the customer. Competition can’t exist unless customers can make easy comparison; a pint of milk is a pint of milk, no charges for containers, ‘free’ milk on weekends, cancellation charges, milk n’ beer ‘packages’, ‘free’ milk for a week, etc. Why can’t we have the same for insurance, telecomms and fuel?

  19. Dave Andrews
    October 11, 2016

    On the point of executive pay, I suggest new appointments being put up for auction. The applicant for the post who puts in the best bid can be elected by the shareholders.
    This might be made mandatory for PLCs and advisory for private companies.
    The bids can include material on why the applicant has the relevant experience, how they can bring value to the post, what new ideas and initiatives they can bring and what total pay package they are asking for their service.
    Such a scheme might put an end to corporate greed and reward for failure, and sharpen the performance of the boards of our large public companies.

  20. a-tracy
    October 11, 2016

    I think more government help should be given to SME’s to export their goods. A free marketplace for British producers and people to help with trade fair information.

    I read an article at the weekend about a Scottish shortbread manufacturer who was saying his cost of butter had increased substantially since the pound sank and he was worried about his business’ future and I was thinking aren’t there any Scottish, Northern Irish or English dairies that are producing competitive butter in the UK without all the transport costs of imports and if not why not?

  21. turboterrier
    October 11, 2016

    Get the government out of public businesses especially the green area. As one CEO once stated “we are a green company, the green is greenbacks in abundance”

    Take away all the subsidies, turbines are no longer needing it for new innovation. Let market forces dictate the costs, those that can operate and supply 24/7 should be the leading the market as the cheapest supplier and it is up to the rest to play catch up. For too long the renewable energy industry has swanned along on the tide of subsidies with no risk to themselves and their investors. Constraint payments are a joke, the RE industry knew that the infrastructure was never there in the first place and incompetent politicians allowed this to go on unchecked in the fear of not being seen as being “green” The RE industry have had a good run and it time to pull the rug on their little money making government sponsored enterprise.

    Payments by results and if a CEO whoever gets a massive bonus when the company has been made a loss draconian tax levies should be implemented. We cannot go on rewarding failure. If the worker fails he is down the road. Payments by results should be standard. Repeal laws where companies are terrified of sacking senior personnel knowing if taken to court they will lose and remove the norm of “it is cheaper to pay them off”

    Companies have got to operate in a different way and enhance their staffs opportunities similar to the old Self Directed Work Teams which in my experience bought the shop floor, support departments, working closer with management to maximise profit and therefore job security for everybody in the company and also for their suppliers.

    Where companies will not change, then taxation can always be used as a last resort and for those that do and it is seen to be profitable and producing more employment should be eligible for sensible government support. No longer throwing money at dodgy investments AKA Scottish floating generators, costing the tax payer £46m.

    Your very good post endorses for me the fact there has got to be changes big ones to give some credibility to the operation of industry and businesses in general.

  22. boffin
    October 11, 2016

    A longstanding problem has been the reluctance of major institutional shareholders (e.g. pension funds) to punish corporations for the wild excesses of their remuneration committees. A welcome reform might have been to to give small shareholders an effective voice by the introduction of a one shareholder, one vote strategy in relation to elite remuneration, but this has been made difficult by the widespread adoption of pooled ‘electronic’ shareholding giving most no say at all.

    A more direct strategy to curb the current, merry-go-round culture of unrealistic rewards for corporate fatcats might be to insist that “bonuses”, when awarded, must be payable not just to the selfserving elite who have scratched and bitten their way to the top, but to all grades of staff throughout the corporation prorata to their gross remuneration.

    October 11, 2016

    Perhaps Big Business in the USA is suffering from a transmogrified corporate capitalistic version of trichotillosis. Doubtful. They payroll in multi-million dollars with accompanying movie stars the Clinton /Bush Dynasties.
    Mr Trump for all his rhetoric is not the American version of the Polish shipyard electrician-cum-President Lech Wałęsa. Enormously rich persons back this hugely wealthy person.No crime in that. But we are not entering, albeit underpinned with one hundred years of universal education, the dawn of the Common Man. Not when you hear the mesmeric chanting at Republican and Democrat rallies. Not when hear here junior doctors also chanting. Me thinks we have some way to go.

  24. a-tracy
    October 11, 2016

    Most of the pension problems are getting sorted aren’t they with NEST, this takes the pension money out of businesses hands and puts it in the recommended pension organisations to invest on behalf of the staff for the future, instead of just relying on the government’s national insurance schemes that take 25.8% of employees and employers earnings over the lower earnings level and promised to use half for the NHS and half for state pensions.

  25. alan jutson
    October 11, 2016

    Perhaps we should give shareholders rather more power to be able to hold those at the top to account, and to set/controlrenumeration packages

  26. agricola
    October 11, 2016

    Following your invitation here are some suggestions.

    Ensure that HMRC understand that where there is a tax rule it must be applied to all. No more sweetheart deals on the say so of the director of HMRC unless he/she has a desire to appear in court. We should all, and I include MPs, be subject to exactly the same tax regime. At present we are not.

    End accounting practices within large international corporations that allow charges from where the corporation wishes the profit to end up, thereby minimising profit where it is originally generated. Put another way, overcharging for coffee beans in the UK to ensure that the UK branch makes little profit.

    Encourage vehicle insurance companies to arrange collective purchasing contracts for replacement parts. The object being to reduce claim costs dramatically. In the spares market Joe Public is made to pay five to ten times what the car manufacturer pays for a given component.

    Our fragmented railways need a clear and comprehensive web site offering fares for any journey at different times. The same applies to our utilities in gas, water and electricity.

    Our low cost airlines should be made to end the practice of fare hiking during school holidays and the second bad practice of offering cheap fares out of the UK and horrendous fares to return two weeks later. I would call it holiday entrapment.

    Setting a ceiling within large shareholder owned corporations of directors pay at ten times the corporate average pay.

    Encourage small and medium sized businesses with investment and corporation tax breaks to encourage their expansion and employment prospects.

    The complete and total separation of pension scheme contributions both corporate and individual from the corporate account and or access by the company directors/owners.

    Absolute clarity of the financial workings of all private pension schemes. We need to see who is feeding off the hard earned contributions and what carrion can be eliminated. It is significant that some continental pensions are worth one third more than equivalently contributed UK ones because the carrion are not encouraged.

    Finally, when the fracking Nimbys have been squashed, the creation of a national fund for running social services along the lines of what Norway has done through a levy on oil and gas production. This could end the appalling way our elderly are treated, housed, fed and heated, while possibly assuaging the ever growing appetite of our NHS.

    Enough to keep you occupied for a while.

    Reply MPs are under the same tax laws as everyone else. People in business do not pay personal taxes on the money spent on running the office they work in or spent on support staff salaries!

  27. A different Simon
    October 11, 2016

    Ex-BHS owner Phil Green isn’t my cup of tea .

    I don’t like the leveraged buyout type mechanism he used for the acquisition with a special dividend paid from borrowing to enable him and his wife to recover the purchase price .

    However , to blame him for the ills of a pensions scheme which should never have been offered in the first place is a stretch .

    An awful lot more DB pensions are going to be in serious deficit yet according to Labour and I think Conservative too it’s all Greens fault .

    The more DB pensions schemes which tend towards default , the higher the premiums which will be required from those which are not in default to the Pensions Protection Fund .

    Better to cut in default DB pensions loose rather than let them cause systemic failure ?

    One needs to ask who has ruined the investment environment and the answer is Govt’s , Central Banks and Private Banks .

    Carney no doubt will continue to receive a great remuneration package and be looking forward to a guaranteed comfortable old age .

    When is May going to sack Carney ?

  28. SM
    October 11, 2016

    I’m all in favour of honest capitalism and vigorous entrepreneurship, but of course there are always those, from top to bottom of any society, who are greedy.

    The most recent debacle regarding tax-avoidance schemes (dreamt up during Brown’s stint at the Treasury) tied up with film investment is surely an indicator that tax laws must be clear, simple and straightforward for businesses (and also for individuals!).

    Every tax incentive designed for primarily political purposes (ie pork-barrel politics) opens the door to the potential for ….well, let’s call it ‘excessive manipulation’ by the amoral.

  29. a-tracy
    October 11, 2016

    JCB have cancelled their membership of the CBI, more big businesses should be asking their membership organisations what they are doing to represent them more positively and putting forward a positive British business image.

  30. Liz
    October 11, 2016

    A lot of businesses have become too large and we know what to0 much power does. Banks particular used to be ethical institutions contributing to the community they served – not know – most hardly know their customers let alone their communities and don’tcare either. Much big business has lost, or never acquired, ethical standards, so it is OK for the executives to pay themselves what to many people are obscene salaries and bonuses and contribute as little as possible to society as a whole. They think it is OK to continually enlarge the gap between their pay and the average salary of their workforce. Globalisation seems like a good idea but it has its downside which is only just becoming apparent with the increasing resentment of the many who lose out compared to the few who gain. We should learn from history what too much power and wealth in the hands of a few can lead to – revolution!

  31. Bert Young
    October 11, 2016

    We live in a culture where success breeds success and only the “best” survive . Big companies have the most problem in maintaining a continuous core value – the difficulty , more often than not , coming from the Board Room where personality dominates .The target of always endeavouring to improve results is a root cause .

    The activity of the Board Room is often isolated from an independent overview ; in many cases a “Supervisory Board” has been set up to oversee that the aims and objectives of an organisation are maintained and that the Chief Executive is accountable ; this inevitably means keeping a long term view as the form of guidance and control .The Supervisory Board must have the power to dismiss the Chief Executive .

    Of course smaller companies do not have the luxury of more sophisticated controls and miss out on this outside influence . Larger organisations are mainly international in operations and structure and can disappear behind a morass of laws . I am an advocate of the Supervisory Board structure existing under the umbrella of an International Agreement . Nothing will always be perfect but there is no harm in moving in this direction .

  32. Prigger
    October 11, 2016

    Business as such can be unproblematic in the main.Arguably if it did not exist then many of its dignitaries would need to find a much nastier way of getting more of the national pie than they are entitled legitimately.They would head various groupings of street gangs.Though some , of course, would choose to enter trades unions and political parties thus increasing their authority, wealth and fiat-status.
    The profit-motive is not sufficient to ongoingly direct the human spirit to produce more commodities and work with sober regularity. Humans require power. This primeval power mania is good and bad. But it sticks a dagger in the heart of any system of economics in the final analysis. It is not systems which make humans but humans which make systems. Like children they will three-quarter build a magnificent sandcastle but cannot resist the urge to jump up and down on it before completion.
    Thus, State Capitalism, has proved in some ways workable in China. But it will fail, naturally, just a spit and a scratch before achieving ultimate victory.

  33. Stephen Berry
    October 11, 2016

    The big thing wrong with big business is big government.

    An industrial strategy usually means bailing out or subsidising companies which have failed on the market and should restructure or cease trading. In the 1970s this was British car manufacturing and other nationalised industries. Now it seems to be the banks and other financial behemoths which are judged too big to fail. Remember that it’s big business that can most effectively lobby government for cash. When was the last small business bailed out by government?

    But let’s not go overboard about this. Don’t forget that misbehaviour is part of the human condition and just as prevalent in politics as business. When individuals who run businesses misbehave, they should be sued by their customers. And why do you think that people who live in out of the way rural areas should expect the same standard of broadband as people in heavily-populated cities? They don’t get this with their TV reception.

    Let’s be careful of bashing the businessman because he is rich. Remember, the standard of living of the average man is higher in those countries which have the greatest number of wealthy businessmen.

  34. Adam
    October 11, 2016

    How about we regulate drug cartels.

    A good law would be if you are caught using drugs you lose your job, because we dont want proceeds of the legitimate economy being redirected into the beheading, child enslaving cartels.

    This policy would also help improve the culture at the BBC.

    1. A different Simon
      October 12, 2016

      Think an adaption of the policy is needed to improve the culture at the BBC ; people who ply children with drugs should be turned over to the police .

      Certainly beats protecting them for decades and sacking people who try to bring the wrong doing to light (outing Saville cost Jerry Sadowitz his own career ) .

  35. Dangermouse
    October 11, 2016

    “What should we do about big business? ”

    Giving the doorman at a nightclub usually ensured “It’s full” would quickly change to “Ok you can go in”. £5-02p for our top business people should do the trick as they are a cut above.

  36. Kenneth
    October 11, 2016

    To me, it’s pretty obvious: we need to have free markets.

    Regulations ultimately place the advantage with the largest companies who have the resources to absorb regulatory demands and even lobby for them and help to draft them.

    Inevitably, companies, as part of their duty to maximise profits, will find loopholes. The government then reacts with yet more regulations.

    Thus the big companies gain yet more advantage and the viscous circle continues.

    There is also a carrot as well as a stick. The large companies have more resources to apply for and win grants and subsidies.

    Meanwhile, as you say John, the new innovations come from the challengers who struggle against the uneven playing field. The big firms are less interested in innovation and more interested in gaming the regulatory system.

    The answer, in my opinion, is a drastic reduction in regulations and red tape. We need to make hiring and firing easier, get rid of many of the tax breaks and reduce the barriers to entry into a new industry. We need a free market with less government interference.

    Banking is a good example. We should have 1,000’s of banks, not just a handful. No wonder customer service is so poor.

    There is nothing wrong with having a large company. However, cozy, lazy cartels that protect their market using excessive regulations damages our economy and stifles progress.

  37. oldtimer
    October 11, 2016

    The government should be the body that marks out the pitch, appoints the referee and maintains a level playing field. Once it starts to tilt the playing field, move the goal posts or uses the referee to fix the match then it has strayed beyond its proper remit. For there lies trouble, waste of taxpayers money and the stifling of the innovation and competition on which our improvement in living standards depends.

    As for the teams on the pitch, they are required to play by the rules laid down. These are, in part, the laws and regulations imposed by government but also, in part, the standards of behaviour expected of the competing teams by the public at large. It seems to me, therefore, that big business needs not only ensure it complies with the written rules but also behaves in ways which will stand the test of public scrutiny – should they ever come to receive it – in the many and varied societies in which global businesses operate.

    The reality, of course, is that governments and international bodies are interfering with the game on the pitch all the time. So global businesses seek to adapt to the realities they face – or get out of the market.

  38. E.S Tablishment
    October 11, 2016

    A superbly balanced article JR. What the Labour Party and the Green MP do not comprehend is that it is business which creates wealth and not the ideas of a German Marxist strange but coincidentally called Marx himself.

  39. Antisthenes
    October 11, 2016

    Perhaps big business sees that the public sector can thrive well and reward their executives handsomely whilst being incompetent, wasteful, inefficient and produce poor quality goods and services so they see no reason not to do the same. No doubt they have noted that the public sector is good at taking but not giving because it is made up of monopolies which are are funded or subsided by taxpayers. They also note that coupled with public sector regulations it protects it from losing consumers as it restricts their choice of supplier to just one or at the best a few.

    Big business wants what the public sector has. It wants to be a monopoly and use taxpayers money to their advantage. There is not better way than doing that than by encouraging regulations that their size allows them to afford that smaller companies and new entrants to a market cannot. Thereby restricting choice of supplier to the consumer. It also likes tax regimes that they can exploit and manipulate and subsidies of course even small businesses love those.

    Government obliges them with exploitable complex tax legislation incorporating tax breaks, subsidies and regulations. It is no wonder the CBI is in favour of the EU as it is very indulgent with doing all those things. Do we say because what is being done does not work we should simplify tax codes, reduce regulation and stop subsidies? No we do not we demand more of the same.

  40. Mockbeggar
    October 11, 2016

    One thing that should be done, and it is already being mooted, is to give control of the directors to the shareholders, particularly with regard to directors’ remuneration packages. I find it odd that the owners of a company have no power to do this other than to make a recommendation at the annual shareholders’ meeting. Surely shareholders should, by democratic means, be able to take ultimate control of their company if they feel that the directors have mismanaged it.

  41. rose
    October 11, 2016

    I would start with education and training.

    When we had our cultural revolution in the sixties and seventies, education was all but destroyed in the public sector. Business then started to complain about illiteracy and innumeracy, and a lack of work ethic. So what happened next? A slight improvement, but not enough, and we are now number 29 in the world for education.

    Then, open borders came along and business no longer demanded a better educated workforce; they no longer took on our young people to train up. They understandably employed the very well educated and hardworking people of Eastern Europe, and naturally don’t want to give them up now.

    Remainiacs are quite happy with this state of affairs, running down the children of their own people and content to leave them on drugs and drink. They avail themselves of the charming, cheap imported labour in the first generation, and to hell with the future of their country.

    So first educate the workforce and train it. We need to get back a direct link between the people and business, and a local workforce would be the first step.

    1. rose
      October 11, 2016

      Of course the educational cultural revolution was not the only cause of unemployability. There was also welfarism and the destruction of the family.

  42. Russ Walker
    October 11, 2016

    We all know the bigger the business, the more power they wield and we all know power corrupts. So instead of having complicated tax laws which can be got around, we should adopt the K.I.S.S. principle which is ‘Keep It Simple Stupid’ . Start afresh and when making the new tax laws do not allow any bureaucrats within a 30 mile radius.

  43. William Long
    October 11, 2016

    As usual there are various issues here. Regarding Taxation, it is up to the elected Government to decide how and how much businesses should pay to the state and it is a clear part of the duty the the management of any business owes to its shareholders and employees to pay as little as is legally possible. If the Government decides that this is not enough it is its prerogative to change the law, but it is just as immoral for a Government to imply that a taxpayer should pay more tax than is due, as it is for a taxpayer illegally to evade tax. Honest politicians would be clear about this, but I am not aware of many of those!
    I think disproportionately huge personal rewards for a few, are at the base of most concerns about ‘big business’, and as you and other commentators have pointed out there is a huge difference in entitlement between the owner of a business with his own money at risk, and mere wage slave executives, however senior. How you address this in a competitive market place is the conundrum, but public opinion is probably going to be the most effective part of the answer.
    I would differentiate between technical disasters of the oil spill kind and the VW scandal where regulations were ignored and sidestepped. However almost all the recent scandals can be clearly demonstrated to have been transgressions of an existing law. Governments should think very carefully indeed before they impose new ones which will do little to deter the few bad hats that will always be out there. In my experience, in the financial services industry, regulators are always proud to erect fences around yesterday’s problem and do very little to look for and counter the abuses that are being invented now for use in the future. I think this is what should change.

  44. Rods
    October 11, 2016

    The issue of Public Company director remuneration and bonuses in the US and to a lessor extent in the UK has lead to a very focussed hit the short term targets culture, which is not actually in the long term interests for maximising long term investment, growth and profits according to a very good Brookings paper I read about a year ago. These days long term is the 3 month financial figures reported by a public company

    Where substantial bonuses are often triggered on the basis of earning per share, share buy-backs are currently more popular than investing in long projects. In fact the squeezing of costs especially investment in the short term can be desirable on the basis, I get my bonuses now, the long term damage will hopefully be a future directors problem! The same motivation very often also applies to active investors and shareholders, where short term gain takes precedence over long term growth and profits.

    I always reluctant to suggest more legislation as companies already have enough time consuming and cost regularity hoops to jump through, but after trying encouragement to take a more long termist view, the carrot or the stick may need to be used. The skick maybe the use of delayed bonuses and company long term missed target clawbacks, like now applies to the banks, the carrot maybe a more favourable tax system on the payment on reaching long term targets and the payment of bonuses and dividends.

  45. Kevin
    October 11, 2016

    One possible approach might be to look at the legal regime imposed on start-up businesses. If I may illustrate my point with an anecdote. I seem to remember a news story involving a lady who was selling cookies via online marketing. Her special offer proved so popular that she reportedly made a loss fulfilling all the orders. I suspect that a bigger business may have had recourse to their legal department to mitigate this outcome. This all seems unfair to me.

    How would it be, for example, if start-ups could participate in a Start-Up Ombudsman scheme? Perhaps, under this scheme, the Ombudsman could provide industry-specific terms and conditions that businesses could adopt as their own, having provided the requisite notification of their membership of the scheme to potential customers. These terms could include strict caps on liabilities and disputes would be resolved by the Ombudsman alone, at no cost to the business, and with no recourse to the courts. The Ombudsman could also specify the precise insurance cover that would be required to cover the terms.

    This idea may be completely impractical, and it certainly should not apply to goods and services that directly involve health and safety concerns, e.g. the sale of electrical appliances. I wish, however, to highlight an important disadvantage that start-ups face that is I believe is detrimental to competition. For example, JR writes that ours is “an era when business has delivered us…better personal transport”. While not writing as a legal historian, it is my understanding that the civil aviation industry in this country began with a looser civil liability regime than exists now, for the sake of the survival of the industry. Whilst, as I mention, having due regard for modern standards of health and safety, I think that a similarly sympathetic approach should be taken to the survival of small businesses in general today.

  46. Bryan Harris
    October 11, 2016

    It would seem that a lot of political corporate climbers lack the ethics they should be employing.

    Make it compulsory that all middle exec’s and above are required to train in ethics tech. Then have them submit a report every year on how they personally complied.

    The other side of the industrial coin is the way unions behave. Mrs Thatcher tamed them to some degree, but more is required to make them ethical as well. Union leaders should be encouraged to go on the above ethics course, publishing how they were ethical annually.
    It’s also time to add some legislation to allow companies to take unions to court where profits are being lost due to excessive industrial action – that has to be carefully worded as clearly some strikes are sensible – but union barons have gotten away with disruptive actions for too long – They should be made responsible, in law, for not only their members benefit, but also for the companies bottom line.

  47. Fedup
    October 11, 2016

    Nationalise big business. Most of it. Then privatise bits of it.
    It is easy to criticise “the rich” ; “fat cats” and have self-righteous proclamations about fairness, pointing to the lowly paid and coming out with pseudo-religious drivel to virtue-signal all around. But all of us with the exception of dead saints would not be displeased to win millions on a lottery ticket which we reluctantly agreed to buy “just to be part of the team.”

    Direct and indirect popular attacks by populist politicians and equally populist religions on anyone who has managed to save a crust from his daily bread ration is cowardly.

    It does not mean rich people should control big business. A guy who breeds door mice and becomes a world beating door mouse breeder should not therefore be put into the House of Lords and sit on some Business Committee. Yet this kind of thing happens often. It would be silly to say that Lady Luck or Chance does not play a large part in Business. Getting lucky once and then because you have come to know the right people getting luckier twice and because you are lucky again getting a government grant does not make you a Big Business guru. Most business people would never, now, be able to start from scratch, without knowing a soul, begin a business and progress. The roadside sandwich maker, now, has to compete with large corporate fast food outlets who can afford the hygiene and working requirements.By the time you’ve spread your potted hedgehog meat paste on a slice of bread, the outlet across the road will have served french fries, an acidic drink and a free cuddly toy imported cheap by the million from China to all your potential customers.
    So things need to start from scratch again with small businesses. The only way to do it, really, is to nationalise and re-privatise. Grossly uneconomical. But importantly gives a reason to live. No-one likes to be told what to do. Big Business creates Corbynistas and populists. They destroy Big Business and thus invalidate its use.Locking up Corbynistas throughout the world has been tried. But they start playing guitars, reciting Vogon poetry about workers and peasants and end up on some student wall in minimalist format like a small,regular or large Che Guevara to takeaway.

  48. forthurst
    October 11, 2016

    People in the know would not bet the ranch on Mrs Clinton’s words leading to any consequent action should her well rehearsed acting performances lead to the Presidency; rather we should look forward more to living in interesting times.

    Large companies are the focus of fund managers attention; many fund mangers are impatient for increases in earnings and dividends when that is may not be the best way to achieve sustainable long term growth of businesses. Many fund managers believe they know how to run the companies they follow; they like to talk to company managers who believe they know how to run companies because they had been financial directors, previously; there is no more stark example of this than Rolls-Royce which unusually for a large engineering company has put an engineer in charge, someone who has demonstrated that, despite nitwitted fund managers’ opinions, an able engineer can get to grips with a large engineering company in which a well regarded accountant had been desperately focusing on trying to serve up good news to fund managers whilst failing to address the deep-seeted problems of the business.

    It should be much harder for British businesses to be flogged off to foreigners on the sayso of other foreigners who control large CIS funds. Public companies should still be under an obligation to report share sensitive information, but the law shoud be changed so that public companies should only talk to shareholders in a public forum, and then only once a year. The existing system of non-execs is clearly not working since all they seem to do is indulge the executive directors in their ambition to earn more than members of their peer group elsewhere; some of them are women who are there to comply with ridiculous Feminist laws and may not have any knowledge to assist the business.

  49. Tad Davison
    October 11, 2016

    Maybe we ought to take a closer look at the role of Lobbyists who act on behalf of big business and others, to influence the laws of the land in their favour.

    I agree with Mrs. May, and have always held the view that the economy should work for everyone. Nobody should be left behind, unless they are a criminal scumbag that doesn’t deserve anything other than a prison cell with few amenities anyway.

    Big business is one thing, but the Jamie Dimons, the George Soros’ and the Warren Buffets are a different matter altogether. Perhaps we ought to have the guts to focus upon their role and influence too.

    Tad Davison


    1. A different Simon
      October 12, 2016

      Tad ,

      These days “Big Business” also includes “Big Green” and “Big Third Sector” .

      These organisations , more often sinister than not , get a very easy ride and don’t seem to be subject to proper scrutiny .

  50. ian
    October 11, 2016

    I will intervene today on share ownership and taxation of companies, you can only vote on company matters if you have the share certificate of the company in your ownership, owning share in a brokerage account of a company will not allow you to vote at the GM, owning shares in a fund also will not give you the vote or a hedge fund or any other means, only have the shares certificates in your ownership will allow you the vote on company business, companies are run like a union on the block vote like unions, it the fund managers, hedge funds, banks, insurance companies and people who ask the brokerage to send them the shares certificates who are called small shares holders who can vote, in others words it a closed shop just like unions with the block vote.

    Parliament took away the power of unions by companies lobbing parliament, who is going to take away the power of companies who do as they like through the block vote of a small number of people, it all the same thing, who controls.

    Now we have the block chain and tec to do better, will parliament use it to bring more accountability to the people and make new laws like they did to unions.

    Companies taxation come mainly from employment taxes of people and computing power increases each year, robots and bots will be used more, by 2019 one computer will have the power of one human brain and will double every year after that so by 2029 one computer will have the power of 1028 human brains and by that year your home computer will have the power of one human brain, now as there is no tax on robots or bots so i ask you would spend a one off payment of 50,000 pounds on a robot that can move like a human and have the brain intelligence of 64 human being and can be a steeple jack one day the next a lorry driver and the next a doctor in a hospital and pays no tax and can work 24/7 or a human being who can do one job, costs 50,000 a year has to go home to sleep and will not work weekends and with companies taxes going down to 15% or lower how are you going to get your taxes in in future bearing in mind you are still bringing in hundred of thousands of people into to the country under false pretence of the workers of the future the country needs, when in fact you need less people than ever before, who is going to pay the tax in 10 years time because if i am in the boardroom i would want all bots and run the company offshore by bots so i pay no tax and offshore companies come because like car manufacturer they pay no business rates and can take their money offshore without paying tax hear and if they want to can fire all the workers hear and just have robots which they can do now, they only employ a few hundred workers hear to look good but they do not need them the bots can do all the work, so they no employment taxes no business rates no companies tax just a bit ele and gas tax and vat when a car sell hear but not car for export, great deal.

    So as you can see going forward only gross tax on all companies work hear will work, employment taxes are a thing of the past and all goods coming in to the country will need to be tax gross and the bill sent to the offshore company for payment for trim it sell hear and do mean import duties i mean the bill is sent to the companies once the item has been sold in the country by way of bar code and block chain tec.

    politician, parliament and government are way behind the times and if they do not catch soon they will have tax at all coming in, companies are hear to server people not the other way round, they hear to server their shareholders which the most of them do not get a vote on company business because they are set up like unions and to server the people and the country other wise there is no point to them.

  51. Brewer
    October 11, 2016

    “Most people do not understand analogy and metaphor” wrote one man to me who I barely knew online. I do not know what he meant.

    Big Business and society, the latter which the late Mrs Thatcher said did not exist, are like yeast fermenting sugar in a demi-john. The fermentation proceeds at a healthy rate given the correct balance of nutrients and other variables. But slowly the mixture of yeast, alcohol and environment becomes toxic for the living yeast to go on raising the alcohol level. It is a teetotaller. The alcohol is its toiletry waste product. Enough is enough.
    So with Big Business. Its waste products or bi-products despite its best philanthropic measures result sometimes if not always in its death.

    “What should we do about Big Business.? ” Take note of its fermentation rate; the resultant strength, texture, flavour, cost of its operation. Tip out the dead Big Business cell fungus and start the process again. Temper the adding of nutrients at the final stage and thus get a higher alcohol/production level. Beware of Corbynista tiny fermentation flies which, just one touch can turn the whole ferment into vinegar and resulting it needing to be dumped down the toilet.

  52. John I Blyth
    October 11, 2016

    Company directors need to be reminded that their duty is towards the shareholders. Whilst rewarding themselves generously they pay peanuts to shareholders. Directors need to realise they are company servants not masters. A much simpler tax regime would help both investors and management.
    It is madness to sell off one of the pillars of Londons financial success I.E, the stock exchange. It only remains to sell Lloyds and the Bank of England and we can all go home.

  53. John SEROCOLD
    October 11, 2016

    The October issue of “Modern Railways” has a rather good piece by Roger Ford (“Informed Sources”) about the difficulties the UK railway supply industry faces in growing exports. Not an ‘industrial strategy’ but a useful appreciation of the situation?

  54. anon
    October 11, 2016

    As they get bigger tax them more or cap leverage. As they become larger they become systemic risks to manage. They also become political and a threat to democracy.

    We need competition,transparency, a policy that encourages entrants, a balance of rules, which are not aimed at for a vested interest other than the public interest.

    We need to review why only certain companies are allowed to create money from thin air and why?

    This should revert to a state treasury function and the proceeds injected by spending or infrastructure. No need for external funding of large projects, with guarantees not available to UK retail investors e.g. a national HMG backed ISA to fund it.

    More simple taxes on a PAYG basis e.g. Passport, Border Crossing Fee. Abolish road tax, in favour of per mile charge. Abolish the BBC licence fee, make it PAYG voluntary.

  55. Peter Lloyd
    October 11, 2016

    I think there is one small step that would be very helpful towards the start of resolving the problem you are describing.

    Currently the owners of the quoted companies have to approve the remuneration policy but not the actual pay of executives in large quoted companies.

    Remuneration for the top executives of the companies in question is set by the people who sit round the top table with them i.e. the non-executive board members. The natural tendency for any board is to support the two main executives, the CEO and the FD. There is a natural conflict between wanting to support the executives and wanting the best deal for the company and its shareholders because the personal interest of the executives is for the highest pay possible for themselves whereas the shareholders want the lowest pay possible commensurate with the maximum effort from the executives.

    If the shareholders of the company set, or had to approve, the actual remuneration it would both give a more independent assessment of pay (most shareholders own shares in many large companies and have a good idea of the right levels) and check the natural greed.

    Institutional shareholders have shied away from their responsibilities but why should they? They are the owners after all.

    Theresa May has hinted at such a change and it would take the heat off some of the sillier proposals around the governance of companies.

    One other change that would be helpful is to move from a philosophy of shareholder value to one of corporate value – a subtle but important difference that has the potential to change corporate behaviour from benefiting the short term only to benefiting the long term.

  56. NA
    October 12, 2016

    After running some big business’ the problem is price fixing. They all do it, they conspire together against the consumer, politicians are naive or don’t care.

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