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Tuesday, January 24, 2012

Post Offices and executive pay

Two announcements this week by Liberal Democrat Ministers have been very welcome and demonstrate once more the benefits that the party are bringing to government.

The first of these by Post Office Minister, Ed Davey is reported in today's Daily Telegraph. They say that Post offices have been given a decade-long lifeline with Royal Mail which should help to stave a fresh round of mass closures:

Royal Mail has agreed a 10-year deal to keep using post offices to sell stamps and handle parcels after the company is broken up at privatisation.

The deal is a relief to campaigners who had feared that Royal Mail would have been free to stop using the post office network once it was spun off as a private company.

That would have jeopardised thousands of post offices which rely on Government subsidy and Royal Mail’s work to stay in business.

The new “inter-business agreement”, which starts on April 1, is twice as long as had been thought, and as been agreed with lawyers for Royal Mail and the Government.

Ed Davey, the Post Office minister, said the agreement meant that the future of the post office had been “secured”.

This is of course in addition to he £2 billion investment promised for the Post Office and is a stark contrast to the attitude of the previous Labour Government who closed 6,500 Post Offices during their term in office.

Meanwhile, Ed Davey's boss, Vince Cable has pledged to replace "rewards for failure" with "rewards for success" by outlining plans to boost the power of shareholders to curb excessive executive pay.

According to the Independent his boardroom reform plans include:

* shareholders' votes on pay packages to be binding rather than advisory as at present;

* clearer remuneration reports on executive pay separating what happened in the past year (on which shareholders' votes would not be retrospective) and future policy;

* companies to publish a single pay figure for each executive;

* clawback clauses in executives' contracts at all large companies, like those introduced by the banks;

* shareholders to vote on pay-offs worth more than one-year's salary;

* companies urged to ensure greater diversity on boards, and codes of practice changed to end the "old boy network" under which a small number of executives sit on the remuneration committees of other big firms.

These measures are a major step forward and will hopefull contribute to improving the accountability of the boardroom. However, I hope that the Government is clear that if change is not achieved then legislation to put that right will be pursued.
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