Patricia Hewitt, the Trade and Industry Secretary, has delivered the keynote speech at the Internet World Conference, sponsored by Penton Technology Media, extolling the virtues of the British entrepreneur small businesses and the de-regulation achieved by the Labour Party in the last six years.
The speech came hours after Ms Hewitt launched a Government consultation paper on “fat cat” pay for company directors and executives who walk away from failing companies with unreasonable severances.
The document, entitled Reward for Failure, looks to assess the controversy surrounding the drawing up of directors` contracts, and their performance and partition payments.
Unions have been pressing the Government to tackle the issue of ‘fat cat’ pay, warning that the issue was damaging industrial relations in workplaces across the country. The issue has grown in controversy since the start of the company financial reporting season earlier this year.
In her speech, Ms. Hewitt said: “We have no problems with big rewards for big success, but shareholders are rightly concerned when directors leave failing companies and walk away with excessive payouts.
“The Government said it was consulting in response to growing anger among shareholders, who have recently rebelled against the fat cat culture, and would welcome contributions from all interested parties”.
Following her comments, Ms. Hewitt was approached by Mr. Christopher Poole, Business Development Director for Internet Travel News, who questioned whether company directors are to be held accountable by shareholders under current UK company law, stating that a company directors first and last responsibility was to the shareholder.
He commented: “Surely Mr. Rod Eddington
, BA Chief Executive, should save his shareholders the £64 million sum that has been quoted by BA for mothballing Concorde and instead gain £1 from Virgin, - the equivalent sum of money that BA originally paid the British taxpayers when BA was taken from the public to private sector, and purchased Concorde”.
After more than quarter of a century as the worlds only supersonic transatlantic shuttle, British Airways
plans to retire its Concorde fleet in October, because of rising maintenance costs and declining demand for tickets at some $7,000 a seat.
Ms Hewitt replied that it was a very complicated issue. She commented: “The fact of the matter is that Airbus industries are reticent to continue the maintenance of a Concorde fleet because so many parts have to be hand engineered”.
In response Mr. Poole commented: “Surely Virgin Atlantic Chairman Sir Richard Branson, should be given an opportunity to review the full management books on Concorde to see if he can negotiate an economical service between himself and Airbus industries - after all, he is not tied to a no compulsory redundancy clause with the trade unions as is BA.”
Mr. Poole added “Lets face it, the only two things that our national flag carrier had going for it that differentiated it from other national airlines was that it flew the Union Jack on the tail fin of its fleet and it operated Concorde, the most innovative and technologically advanced passenger aircraft in the world”.
BA, under another Chairman, has already voluntarily given up the Union Jack in a disastrous attempt at re-branding some years ago and the Union Jack colours were quickly taken up by Sir Richard Branson.
Sir Richard Branson has expressed his belief that Virgin Atlantic could make money out of the seven BA Concordes, meanwhile BA has said that it would not reverse its decision to retire Concorde later this year and has revealed plans to put the aircraft on public display in museums.
Mr. Poole commented: “I believe Concorde should be given the same opportunity under Sir Richard Branson - if he is willing to try he should be allowed a free hand”.
Patricia Hewitt then exclusively admitted that she had been trying to get BA and Virgin around the table to negotiate this matter.