City executives should be rewarded with the carrot, rather than threatened with the stick, to increase the number of women in senior positions at the biggest UK companies, a government-led commission has urged, calling on bonuses for top managers be determined in part by the number of women in senior management roles. Financial services firms should also be required to report explicitly on gender diversity throughout the organisation and an executive should be given explicit responsibility for promoting gender diversity and inclusion. Harriet Baldwin, economic secretary to the Treasury will present the recommendations, which are being made by a commission headed up by Jane-Anne Gadiha, the chief executive of Virgin Money, later today. The suggestions come one week after the final Women on Boards report showed that the number of board positions held by women on the FTSE 100 had more than doubled to 26.1% in the last five years, with no all-male boards remaining. Lord Davies, who led that work, set companies the target of increasing representation to 33% by the end of the decade. Lady Barbara Judge, IoD chairman, called on firms to attack the executive level and urged girls and young women to take rigorous, scientific subjects like maths at school to increase their chances of success.
Maria Miller, former Culture Secretary, has also announced today that she will lead an inquiry into the gender pay gap. Miller, who now heads up the women and equalities committee, will undertake a wide-ranging review into pay and promotion at British companies, looking particularly at how to tackle the gap in hourly pay between men and women over the age of 40. Until that age, the difference in the amount men and women take home for each hour of work is broadly similar, though it diverges considerably in later years. The problem, then, is that more men have made it to the highest, most well-paid jobs, and that many women have cut their hours or taken on lower-paying roles while they look after young children. The government is already planning measures to address the gap, by forcing late companies to publish average pay for men and women in their organisations along with average bonus payments by gender.
George speeds things up
George Osborne gave as much detail as any government figure dare on the process of renegotiating the UK’s relationship with Europe yesterday, when he addressed German business leaders and spoke alongside Angela Merkel and Wolfgang Schauble in Berlin. The Chancellor was surprisingly bold on the need for a two-speed Europe to be “enshrined in law.” To EU wonks, this means the arduous process of treaty change, and it is something most thought was off the table in this renegotiation. Changing the European Union’s founding treaties –wordy contracts which set out the terms of membership of the EU on everything from the four freedoms to the Brussels institutions and the ideological underpinnings of an “ever closer union” – is a lengthy process, and one which gives all 28 members the chance to have their say. European politicians are wary of ‘opening’ them up as it would trigger yet another round of negotiations and lead to referenda across Europe, as many countries have to go to their populations when the European constitution is changed.
Nevertheless, the chancellor implied Britain would be seeking some kind of sealed-envelope deal, where protections for non-Eurozone countries, including a legal recognition of non-discrimination against countries not in the Euro, are agreed to be inserted the next time treaty negotiation is up for grabs. The IoD welcomed Osborne’s detail, highlighting that the measures he outlined broadly align with the calls of IoD members for reform. The full package of reforms that Britain is seeking looks set to be announced by David Cameron next week, before being put to a meeting of EU leaders in December. Merkel also reacted warmly to Osborne’s speech saying that “the Europe of today is no longer a Europe of one speed”, while pointing out she did not agree with the UK on everything, there were many areas of overlap between Britain and Germany – the powerhouses of European growth and competiveness, as Osborne remarked.
Super Thursday Eve
Ahead of the second instalment of ‘Super Thursday’ tomorrow, NIESR has called on the Bank of England to raise interest rates by February 2016. For those who aren’t engrossed by the inner workings of Britain’s central bank, Super Thursday is that special day which happens but once a quarter when the Bank’s rate-setting Monetary Policy Committee announce whether they will change interest rates, the minutes of the meeting in which they decided whether to change interest rates are released, and the Inflation Report which guided their thinking as to whether to change interest rates is also dumped into the ether. It’s only happened once before – back in August – and was a bit of a dud. But since the Bank is most likely to take the plunge and hike rates on a Super Thursday (as opposed to the non-Super Thursdays which occur eight times a year when there is no Inflation Report) this could be Carney & Co’s last chance to end 2015 with interest rates at anything other than their historic low of 0.5%.
At one point, we were talking about a rate rise in late 2014. Now, the market hasn’t priced one in until early 2017, as bumpy GDP growth and emerging market turmoil, it is reckoned, spooked the rate-setters. But NIESR, an economic think, say that a delay until 2017 is not a good idea, as it would push inflation above the Bank’s 2% medium-term target. This might seem far off at the moment with the UK still technically in deflation, but the consumer prices index will begin to creep up from the start of 2016 once oil price shocks fall out of the calculations. The Bank’s remit is to look a few years into the future anyway, so the number crunchers over at NIESR have joined our own chief economist, James Sproule, and a handful of other hawks in calling for rates to go up within the next few months.
Another 800,000 Volkswagen cars could be affected by the emissions rigging scandal, taking the total number of affected vehicles across the world to nearly 12 million. The carmaker says it has discovered further "irregularities" in the amount of carbon dioxide pumped out by some of its smaller diesel cars and will be investigating fully to find out exactly what the cause is. Before, the problem was isolated to nitrous oxide emissions from diesel cars in certain brands which the company attributed to a dozen or so rogue employees, but with each new piece of information, the idea this was a fraud on a company-wide, systemic basis gains traction. VW's new chief executive, Matthias Muller said that the revelation was a painful, but necessary, one for the German company, claiming that "the only thing that counts is the truth." Despite the scandal, VW managed to increase vehicle sales in the US, flogging more than 30,000 cars in October - up 0.24% from September. It's better than many expected, but still means they lost ground to competitors GM and Ford which both clocked double-digit gains. Affected models like the VW Golf and the Jetta saw sales fall by two-fifths as car buyers steered clear.
Pac it in
Poor customer service at HMRC is a "genuine threat to tax collection," the loud-mouthed Public Accounts Committee has said this morning. Meg Hillier, chair of the committee said the tax collectors performance is "worse" than abysmal and that the organisation is failing British taxpayers. The complaints will be familiar for anyone who has dealt with the revenue in recent days, months or years. Just 39% of all calls were answered within five minutes ('that many?' frustrated directors cry) and one in four go completely unanswered. And it isn't just with us regular taxpayers that HMRC has been attacked for failures. The PAC says that HMRC's pursuit of offshore tax evaders had been "woefully inadequate" with just 11 prosecutions against those who illegally evade tax in the last five years. HMRC defended themselves, saying the gap between tax owed and tax collected is one of the lowest in the world in Britain, while unions blamed the government for laying off HMRC staff and called for massive investment in the service.
What we’re reading
With no deal over voting, Osborne has dropped the ball on EU reform
Labour moderates have not found a credible alternative to Corbynism