The Times - UK (2020-12-03)

46 1GM Thursday December 3 2020 | the times

Business

A

pproval of a

vaccine to

tackle the

coronavirus

is “the start

of a march back” for the

economy, the chancellor

said yesterday (Philip

Aldrick writes).

Speaking to Times

Radio, Rishi Sunak said

that the licensing of the

Pfizer/Biontech vaccine

was “a positive step on

our journey to beat this

thing” and “a moment of

great hope and

opportunity”.

It meant that the

country could “look

forward to having less

restrictions”, he said, as

he labelled lockdowns a

“blunt instrument” that

should be used onlyas “a

last resort”.

His upbeat comments

came after a grim set of

forecasts on Tuesday

from the Organisation

for Economic Co-

operation and

Development, which

suggested that Britain ‘s

recovery would be

slower than almost all

large economies.

“Confidence is critical,

especially in an

economy like ours,

which, more than most,

is driven by

consumption — the

things that we go and

buy and do when we’re

out and about — and

consumer confidence is

key to that,” he said.

“That’s something

that, you know, for

understandable reasons,

has been in not as strong

a supply as we would

like over the past several

months, and hopefully,

this is the start of a

march back.”

He insisted that Brexit

was not a threat,

whether there was a deal

with the European

Union or not in the

coming weeks.

“Regardless of what

happens with these

negotiations, I remain

very confident about our

future as a country and

our ability to take

advantage of the

opportunities that will

flow to us,” Mr Sunak

said. He added that the

government was “hard

at work... and hopefully

we can reach a positive

conclusion”.

Borrowing

£394 billion this year to

rescue households and

businesses was “the

right thing to do”, but

the debt overhang

remained a threat, he

said. “The interest we

pay on that debt is

exceptionally low, which

means it is affordable.

But that could change,

right?

“No one has a perfect

crystal ball about which

way interest rates and

inflation will move. And,

obviously, we’re much

more sensitive to

changes in those rates.

And if they moved

against us, that’s

problematic.”

The longer-term

damage has thrown

“day-to-day borrowing

out of whack”, which

some economists

estimate will require

£40 billion of spending

cuts or tax rises to cover.

Mr Sunak would not

be drawn on his plans,

but he said: “We’ve

always looked to provide

support to the British

people to be cognisant of

those who are most

vulnerable.”

Jab is start

of a march

back for UK,

says Sunak

The chancellor visits

Hamleys in central London.

He said that borrowing

£394million was the right

thing to do to rescue the

vulnerable

SIMON WALKER/HM TREASURY

The bosses of Britain’s biggest

companies have 41 times more incen-

tive to hit financial targets than to

attain goals linked to the health,

advancement and morale of their

employees, according to a report.

Executive bonuses are skewed to

financial targets with no, or very little,

weighting given to the wellbeing,

training and engagement of staff,

according to the joint study by the

Chartered Institute of Personnel and

Development and the High Pay Centre.

Sixty-six per cent of FTSE 100

companies give no weighting to staff

matters when structuring either annual

bonus schemes or long-term incentive

Boris Johnson was pressed yesterday to

formulate a “comprehensive plan” to

save retail jobs after the collapses of

Arcadia and Debenhams.

Sir Keir Starmer asked the prime

minister to “work with us, with the

trade unions and the sector to finally

bring forward a comprehensive plan to

save retail jobs and provide the sector

with much greater support” during

the pandemic.

The Labour leader also asked Mr

Johnson what he would do to “pro-

tect the jobs and the pensions of all

those affected by the closures”.

The prime minister said that

the government would do

“everything we can to restore

the high street”, which included

“getting on with our pro-

gramme of rolling out the

vaccine and sensible tiering

measures”.

He also faced calls from

Conservative MPs to extend the

business rates holiday. Mr John-

Johnson told he needs a plan to

save retail jobs during pandemic

son said that the Treasury was “consid-

ering responses to the call for evidence

on business rates ahead of the review’s

conclusion in the spring”. Rates are due

to return to normal in April, but many

Conservative MPs want the holiday to

be extended by up to 12 months.

Darren Jones, Labour chairman of

the Commons business committee,

wrote to Alok Sharma, the business

secretary, asking for details about how

the government planned to address

large-scale retail failures such as those

of Arcadia and Debenhams.

In his letter, Mr Jones asked

whether the government

planned to introduce “spe-

cific support schemes for

large retailers whose

collapse would pre-

cipitate mass redun-

dancies” and whether

this support “will be

over and above

provisions already

available to workers

that have lost their

jobs”. He also called on

the government to assess the impact of

the failure of large businesses on female

workers, part-time and low-paid staff

and to outline how they would be sup-

ported.

“The government should be doing

more to find a solution to commercial

rent debts, as well as support for small

businesses in the supply chain,” he said.

“I hope the secretary of state will look

again at setting up a retail task force

with tenants, landlords, banks, supply-

chain businesses and ministers to find

solutions before more damage is

caused.”

Ed Miliband, Labour’s shadow

business secretary, said: “We have an

emergency on our high streets, with an

estimated 20,000 shops closing and

200,000 workers losing their jobs.”

He added that the government

should extend the rent evictions

moratorium beyond December,

increase support for hospitality busi-

nesses and address “the massive dis-

advantage high streets face around

business rates compared to online

retailers”.

James Dean

‘Pursuing

financial

returns is

41 times

more

rewarding

than

prioritising

workers’

Profit motive comes first for company bosses

plans, they say. Even where personnel

matters are included, they tend to be

given little weighting. Over the entire

FTSE 100, employee metrics accounted

for 2 per cent of bonus weighting, while

financial targets accounted for 82.4 per

cent.

“This suggests that pursuing

financial returns is potentially 41 times

more rewarding that prioritising the

interests of workers,” the report says.

The use of employee metrics in setting

bonuses was increasing, “but from a

low base”.

All FTSE 100 companies include

financial metrics such as total share-

holder return, return on capital, earn-

ings per share and measures of cash-

flow or sales in their bonus calculations,

the study found. There was much less

importance afforded to health and

safety, training, inclusion and diversity

when it came to setting executive pay.

Bosses argue that good treatment of

staff delivers higher financial progress

in the long term, although they con-

cede that in the short term the relation-

ship can be inverse. The absence of

“people factors” in bonus calculations is

partly down to the difficulty in measur-

ing them, the study says.

Charles Cotton, an adviser to the

CIPD, said: “Progressive pay and

employment practices can comfortably

sit alongside and even enhance profita-

bility. Everyone stands to benefit from

using a broader set of measures to

assess company performance.”

Patrick Hosking Financial Editor

Sir Philip Green and

Beyoncé Knowles,

the singer and

actress, at the

opening of Topshop

in New York in

2014 during

Arcadia’s heyday