Daily Mail, Tuesday, August 27, 2019 Page 63
Greece lifts capital controls
by Ruth SunderlandWHEN North Sea oil pio-
neer Algy Cluff said he was
standing down from his
firm at the age of 79, one
might have thought he was
seeking a quiet life tend-
ing to his vineyard in Kent.
But his retirement only
lasted three hours – as he
launched a new Africa-
based oil venture with City
investor Michael Spencer.
Cluff (pictured with his
wife Blondel) told the Mail:
‘I’d actually resigned ear-
lier that day but I was hav-
ing a drink with Michael
Spencer and from that
evolved this new concept.’
The pair registered Cluff
Energy Africa soon after.
Spencer owns 40pc through
his investment firm IPGL
while Cluff has the remain-
ing 60pc of shares.
The entrepreneur, who
resigned from Cluff Natu-
ral Resources in April,
made his name in the
boom of the 1970s. Spen-
cer, 64, is a former Tory
party treasurer and
founded Nex Group. Cluff
Energy Africa will seek
licences to explore for and
produce oil and gas mostly
in west Africa.
It is the sixth self-titled
resources firm Cluff has
launched. His plan origi-
nally was to spend more
time writing books and on
his charity interests.ALGY CLUFF’S RETIREMENT
LASTS A LUNCHTIME
D
onald Trump’s attacks
on Jay Powell, the head of
the US central bank, are
outrageous and by
impugning the independ-
ence of the Federal Reserve, he is
on very dangerous ground.
The President posed a rhetorical ques-
tion on Twitter as to who is the bigger
enemy of the US, the president of China
or the chairman of the Fed?
Powell’s crime is that, on monetary policy,
he has had the temerity to follow his own
judgment – and that of his fellow members
of the committee that sets interest rates –
rather than kowtow to the White House.
Trump’s outbursts undermine the princi-
ple of central bank independence that has
since the 1990s been the norm in the UK,
the US and Europe.
Markets tend to be alarmed by politicians
lashing out like this, interpreting it as a sign
they are seeking a scapegoat for an unsta-
ble economy. But Trump is not the only
one. Governors around the world are
increasingly taking a battering.
Here, Mark Carney has been lambasted by
Brexiteers for the scenarios he used to
stress-test the financial system to see if it
can cope with a no deal departure.
Jacob Rees-Mogg branded him a ‘second-tier Canadian politician’, a ‘wailing banshee’
and ‘hysterical’, while Iain duncan Smith
recently accused him of being one of the
architects and promoters of Project Fear.
never mind that many of those savaging
Carney heaped praise on his head when he
produced an analysis five years ago that
weighed against the Scottish independence
campaign. If the Governor does not pro-
duce their desired conclusions, hardline
Brexiteers conclude he must be biased.
There have been also political encroach-
ments on central banks in Turkey and in
India. President Recep Tayyip Erdogan –
who believes high interest rates fuel infla-
tion, which is, to put it politely, an unortho-
dox view – sacked the governor of the Turkish
central bank. The Reserve Bank of India’sgovernor resigned last year after clashing
with Prime Minister narendra Modi.
This should worry everyone. The reason
central banks became independent is that
history shows politicians do not behave
responsibly if in charge of monetary policy.
We need only go back as far as the 1970s for
evidence. Back then, inflation was rampant
but governments were reluctant to tackle it
because they did not want to be blamed for
the unemployment that would follow.
By contrast, once central banks were
granted independence, they maintained the
low and stable inflation which we take for
granted. Perhaps too much so.
With the ravages of spiralling prices largely
forgotten, central bank governors are easy
whipping boys for populist politicians and
their supporters in a climate where experts
are distrusted. Clashes between politicians
and central bankers are not new.
Jay Powell could even be getting off lightly,
compared with, say, William McChesney
Martin, the architect of the modern Federal
Reserve, who upset President Truman by
refusing to cut interest rates in the 1950s.
Several years later, seeing him on the
street, Truman hissed ‘traitor’ at him. In
the 1960s, lyndon B Johnson summoned
Martin to Texas, pushed him against a wall
and said: ‘My boys are dying in Vietnam and
you won’t print the money I need.’
despite these encounters, Martin’s chair-manship lasted from 1951 to 1970 and he
served under five presidents. So politicians
may come off worst if they bash bankers.
Central bank governors are, of course, as
open to criticism as anyone else. They are
extremely powerful and should be account-
able to the citizens they serve.
There is a legitimate debate to be had
over their use of unconventional tools after
the financial crisis, such as quantitative
easing or money-printing, which has been
blamed for over-inflated stock markets and
widening inequality.
But eroding their independence and turn-
ing them into the cat’s-paws of politicians
can have disastrous consequences.
Boris Johnson should remember this in
his dealings with the new governor who
replaces Carney in January.Hard cheese
TERRIBlE news for turophiles – a new
word to me but which, as erudite readers
will know, means ‘cheese-lovers’.
an article in The Grocer says the prices of
continental cheeses are rising due to the fall
in sterling and declines in milk production.
More bad tidings: blue-veined cheese from
the EU, apart from Roquefort and Gorgon-
zola, which are for some reason exempt, will
have tariffs imposed in a no deal Brexit.
at least it’s good for the waistline.Danger for central banks
Radical reform
needed on top
pay, says guru
a ‘SoFTlY SoFTlY’
approach to curbing execu-
tive pay has not worked and
the system needs a radical
overhaul, one of the UK’s
leading governance gurus
has told the daily Mail.
Guy Jubb is one of the most
respected voices in the City on
the topic of pay, having spent
20 years as global head of gov-
ernance and stewardship at
Standard life Investments.
He is now an honorary pro-
fessor at the Edinburgh Busi-
ness School.
He told the Mail a ‘list of
Shame’ brought in by Theresa
May for companies where
there was a pay revolt of more
than a fifth of investors ‘doesn’t
seem to be having the desired
effect’ based on reports he has
seen – and that in some cases
being on it was taken as a
‘badge of honour’.
Jubb wants sweeping reforms
including a change to voting
rules so that pay resolutions
require a ‘super-majority’
of 75pc, rather than 50pc as
at present.
‘By having a super-majority
requirement, pay committees
will be much more sensitive to
the views of shareholders,’ he
said. ‘This should strengthen
their hand in negotiating with
management.’
He said that while some City
investors do take an active
interest in executive pay and
use their votes, others need to
raise their game.
and he demanded more
transparency about the dis-
cussions between investors
and pay committees, which hesays are ‘shrouded in secrecy’.
an account of these should be
published in annual reports
and be reviewed by the audi-
tors. Investors who fail to
respond to requests to consult
should be ‘named and shamed’,
he added.
a report on FTSE 100 chief
executive pay by the High Pay
Centre last week found that
rewards fell 13 per cent last
year, but that it would still
take the average worker 117
years to earn a top boss’s
annual package.
anger among shareholders
and the public has been fuelled
by outsized awards, including
a payout that could have
exceeded £100m to Jeff Fair-
burn, the former chief execu-
tive of Persimmon. Profits atthe housebuilder were inflated
by the taxpayer-backed Help
to Buy scheme and Fairburn
was ousted this year following
protests by investors, includ-
ing Standard life,
‘The public interest in execu-
tive pay, and the social as well
as corporate issues it gener-
ates, is undeniable. It has the
potential to lead to significant
unrest,’ said Jubb.
‘The softly-softly approach
to addressing the root causes
has consistently failed to
resolve the problems of excess,
largesse and the gulf between
top pay and the rest of us.’
He added: ‘Indeed I am
inclined to think it may have
made the problems worse. The
status quo must not be allowed
to continue.’FREE HOLIDAYS FOR TUI BOSS
THE father-of-four behind
travel firm Tui was handed
two all-expenses-paid holi-
days last year – even though
he is paid a £4.4m salary.
Friedrich Joussen received
£84,000 of perks last year.
And another travel boss,
Arnold Donald, chief execu-
tive of Carnival, which owns
P&O Ferries, was entitled to
£163,000 to use the compa-
ny’s Gulfstream G650 jet for
personal use as part of his
£11.2m pay package.
Donald received £237,000
in benefits, including
£104,000 for his use of the
aircraft. The perks are just
two of dozens of exorbitantexamples of freebies includ-
ing chauffeurs, school fees
and drinks allowances.
In total, Britain’s top bosses
took home more than £6m
in handouts last year, a fig-
ure Tory MP Stephen Kerr, a
member of the Commons
business committee, said
was ‘eye-watering and
unacceptable’. He added:
‘There are some companies
that put together packages
which are frankly obscene.’
Carnival said Donald’s
package is in line with other
US firms. Tui said its holiday
allowance was a small part
of Joussen’s pay, and was
backed by shareholders.Ruth
Sunderland
BUSINESS EDITORGREECE will lift restrictions on trans-
ferring money abroad this week, four
years after they were imposed during
the euro crisis.
The country brought in the draco-
nian measure after fears that it would
crash out of the euro triggered a run
on its banks.
as it stands, businesses cannot trans-
fer more than £91,000 per day out of
the country, and individuals cannot
move more than £3,600 every twomonths. Greece’s finance minister,
Christos Staikouras, who said the
change would come into force on Sun-
day, told the country’s parliament:
‘Restoring free movement of capital
will contribute significantly to
strengthening confidence [in Greece]
and attracting investments.’
The controls were imposed in June- a new centre-right government
came to power last month and made
lifting the capital controls a priority.