Monday, March 04, 2013

UK politics: the people don't decide

Swiss salaries.jpg

While the EU takes the high ground on Bankers' bonuses, stealing a march on national governments over a populist issue, the Swiss people are exercising their own sovereignty, demanding a new law allowing shareholders to veto executive pay proposals as well as banning excessive bonuses for new and departing managers.

This is the result of the latest referendum where 67.9 percent of Swiss voters coming out in favour of the so-called "Minder initiative", the brainchild of entrepreneur and independent MP Thomas Minder. 

Also called the "rip-off initiative", it prohibits managers (or remuneration committees) deciding their own wages. Shareholders will have to the right to vote on the total of all remuneration of Directors, the Executive Board and the Advisory Board. This also extends to base salaries as well as bonus payments. 

During the voting, supporters had the upper hand in all language regions and both in urban and rural areas, in what was the third highest approval rate ever for a popular initiative. It was driven partly by big bonuses blamed for fuelling risky investments that nearly felled Swiss bank UBS, as well as outrage over a proposed $78 million (£51 million) payment to outgoing Novartis chairman Daniel Vasella. 

Judging from responses to the news of the EU attempt to curtail bonuses, such a move in the UK would be highly popular, where corporate greed has taken on a life of its own, in both the public and private sectors. 

Certainly, that is the case in Germany where 79 percent of respondents to a Handelsblatt Onlinesurvey opted for shareholder control of salaries and bonuses. An almost identical majority voted in a poll held by an online market research company. 

Few things, therefore, better illustrate the parlous lack of democracy in this country where our own politicians oppose mandatory restraint in the private sector and have no plans whatsoever to control the "thieves in suits" in the public sector. 

Whether you approve of the Swiss initiative or not, in that country the people can make the decision as to whether to clamp down on the "fat cats", as opposed to British citizens relying on the "undemocratic" intervention of the European Union in the teeth of the opposition from our own "democratically elected" politicians. 

Of course, if the Harrogate Agenda was in place, we could make our own decisions on this and many other issues, without having to wait for politicians – in Brussels or London – to make up their minds, or not. 

In Switzerland, the Business Federation Economiesuisse fought the initiative with a million dollar campaign, and now regrets the referendum decision. At the same time, however, the Federation has issued an assurance the will of "of course" be respected. 

When we the people can tell our corporates what to do, and get the same response, we can start to claim that we have elements of a democracy. As it stand though, the idea that the UK is a working democracy is a pretence to which we should not subscribe. 

In the meantime, we can expect the "rip-off" to continue, a standing testament to where the power really lies in this country, a country where the people don't decide and the political classes have no intentions of letting us anywhere near the reins of power.