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One Direction's earnings mad, says business leader in City pay debate One Direction's earnings mad, says business leader in City pay debate
(6 months later)
Their debut album reached number one in 16 countries, and on their way to chart success the five members of One Direction have provided ample material for gossip columnists. But on Monday Harry Styles, Zayn Malik, Niall Horan, Louis Tomlinson and Liam Payne attracted attention not for their hairstyles, fashion sense or love lives but because the £5m they each earned last year was described as "mad" in a debate on high pay in the City.Their debut album reached number one in 16 countries, and on their way to chart success the five members of One Direction have provided ample material for gossip columnists. But on Monday Harry Styles, Zayn Malik, Niall Horan, Louis Tomlinson and Liam Payne attracted attention not for their hairstyles, fashion sense or love lives but because the £5m they each earned last year was described as "mad" in a debate on high pay in the City.
The business secretary, Vince Cable, was dragged into discussing the wealth of the boy band – a creation of the X Factor franchise – after he appeared to agree with remarks by the head of the Institute of Directors, Simon Walker, who is a high-profile critic of City pay.The business secretary, Vince Cable, was dragged into discussing the wealth of the boy band – a creation of the X Factor franchise – after he appeared to agree with remarks by the head of the Institute of Directors, Simon Walker, who is a high-profile critic of City pay.
During a debate at which Cable had been highlighting the situation of the low paid on the national minimum wage, Walker attacked the "greedy sins of those who demand and secure rewards for failure", and digressed to the pay of pop stars and footballers to put top bosses' salaries into perspective.During a debate at which Cable had been highlighting the situation of the low paid on the national minimum wage, Walker attacked the "greedy sins of those who demand and secure rewards for failure", and digressed to the pay of pop stars and footballers to put top bosses' salaries into perspective.
"I think it's mad that members of boy band One Direction made £5m each last year," Walker said. He made clear that he did not think that the government should intervene or that their pay was any of his business, and said shareholders should clamp down on executive pay."I think it's mad that members of boy band One Direction made £5m each last year," Walker said. He made clear that he did not think that the government should intervene or that their pay was any of his business, and said shareholders should clamp down on executive pay.
Cable, sitting alongside him, later clarified remarks he had made supporting Walker's general thesis on executive pay, telling Sky News: "I don't want to attack One Direction, this is one particular group who are apparently very popular and very successful so I have nothing against them.Cable, sitting alongside him, later clarified remarks he had made supporting Walker's general thesis on executive pay, telling Sky News: "I don't want to attack One Direction, this is one particular group who are apparently very popular and very successful so I have nothing against them.
"But there is a general issue of chief execs in particular who are paid well beyond what can be justified in terms of the performance of their companies, and that's something the government is now trying to address.""But there is a general issue of chief execs in particular who are paid well beyond what can be justified in terms of the performance of their companies, and that's something the government is now trying to address."
The wealth of the five pop stars – the oldest of whom is Tomlinson at 21 – was calculated this weekend for the Sunday Times young music rich list, on which they featured for the first time. Breaking into the US, where two albums made it to number one, helped generate the band's wealth.The wealth of the five pop stars – the oldest of whom is Tomlinson at 21 – was calculated this weekend for the Sunday Times young music rich list, on which they featured for the first time. Breaking into the US, where two albums made it to number one, helped generate the band's wealth.
Walker, who last month attacked £1m payouts to 523 bankers at Royal Bank of Scotland and Barclays, said: "When the ordinary, hard-working people who are the workforce, customer base and often shareholders in our companies see value destroyed in scandals like Libor fixing, or the collapse of HBOS, they are shocked. When those who oversaw such disasters get multimillion-pound payoffs rather than public censure, they are horrified and angry, And rightly so."Walker, who last month attacked £1m payouts to 523 bankers at Royal Bank of Scotland and Barclays, said: "When the ordinary, hard-working people who are the workforce, customer base and often shareholders in our companies see value destroyed in scandals like Libor fixing, or the collapse of HBOS, they are shocked. When those who oversaw such disasters get multimillion-pound payoffs rather than public censure, they are horrified and angry, And rightly so."
Cable has begun investigating whether the three individuals criticised for running HBOS into the ground – Lord Stevenson, Sir James Crosby, who is handing back his knighthood, and Andy Hornby – can be struck off as company directors. "I've got an open mind of whether the system of sanctions is strong enough," Cable told the Guardian.Cable has begun investigating whether the three individuals criticised for running HBOS into the ground – Lord Stevenson, Sir James Crosby, who is handing back his knighthood, and Andy Hornby – can be struck off as company directors. "I've got an open mind of whether the system of sanctions is strong enough," Cable told the Guardian.
He is against a cap on bonuses but at a time when the top rate of tax has been cut to 45% from 50% he admitted he would "be more radical in taxing wealth".He is against a cap on bonuses but at a time when the top rate of tax has been cut to 45% from 50% he admitted he would "be more radical in taxing wealth".
The business secretary outlined rises in the minimum wage of 1% for those below 21 and by nearly 2%, or 12p an hour, for adults to £6.31. The Resolution Foundation calculated that this constituted a real-terms fall for a fourth year in succession, taking the minimum wage back to the same level as in 2004.The business secretary outlined rises in the minimum wage of 1% for those below 21 and by nearly 2%, or 12p an hour, for adults to £6.31. The Resolution Foundation calculated that this constituted a real-terms fall for a fourth year in succession, taking the minimum wage back to the same level as in 2004.
Cable acted in line with recommendations by the low pay commission, except with regards to apprenticeships where he raised the hourly rate by 3p to £2.68 despite the independent body's call for the rate to be frozen. The rate for 18- to 20-year-olds will rise by 5p to £5.03, and for 16- and 17-year-olds by 4p to £3.72.Cable acted in line with recommendations by the low pay commission, except with regards to apprenticeships where he raised the hourly rate by 3p to £2.68 despite the independent body's call for the rate to be frozen. The rate for 18- to 20-year-olds will rise by 5p to £5.03, and for 16- and 17-year-olds by 4p to £3.72.
Cable said there would be a crackdown on abuses of the minimum wage, pointing to the cash economy of unrecorded wages, restaurateurs making assumptions about tips and other employers making deductions for uniforms.Cable said there would be a crackdown on abuses of the minimum wage, pointing to the cash economy of unrecorded wages, restaurateurs making assumptions about tips and other employers making deductions for uniforms.
He faced criticism from the public sector Unison for not using a "living wage" as the baseline for pay. "It is a disgrace that 28,000 hard-working local government staff now earn less than the rate which the government accepts is the minimum any worker in the UK should be paid," said Dave Prentis, general secretary of Unison, pointing to council workers who earn £6.30, 1p below the new adult minimum.He faced criticism from the public sector Unison for not using a "living wage" as the baseline for pay. "It is a disgrace that 28,000 hard-working local government staff now earn less than the rate which the government accepts is the minimum any worker in the UK should be paid," said Dave Prentis, general secretary of Unison, pointing to council workers who earn £6.30, 1p below the new adult minimum.
Cable called for a debate about the living wage campaigns – in London the rate is set at £8.55 – which he said needed to be "grounded in evidence rather than based on rhetoric and political point-scoring".Cable called for a debate about the living wage campaigns – in London the rate is set at £8.55 – which he said needed to be "grounded in evidence rather than based on rhetoric and political point-scoring".
With debate about high and low pay continuing, investors are under pressure to embark on another "shareholder spring" of revolts. Robert Talbut, chief investment officer at Royal London Asset Management, told the conference that remuneration was the responsibility of boards, and called for less complex bonus schemes and less emphasis on "lottery payouts".With debate about high and low pay continuing, investors are under pressure to embark on another "shareholder spring" of revolts. Robert Talbut, chief investment officer at Royal London Asset Management, told the conference that remuneration was the responsibility of boards, and called for less complex bonus schemes and less emphasis on "lottery payouts".
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