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Friday's Business and Politics round-up

08 Nov 2019

Person reading the IoD's news round up with breakfast

Good morning!

Yesterday the Bank of England confirmed that it has decided to keep interest rates at 0.75%. Responding to the announcement, IoD chief economist Tej Parikh said “With inflation below target for now, the Bank has additional backing for its wait-and-see strategy”. 

He added, “With tax, spending, and Brexit policy all contingent on the election, anything other than a holding pattern on interest rates today would have raised eyebrows".

Elsewhere, the IoD’s Director of Policy Edwin Morgan was quoted commenting on the parties’ spending plans as they kick off the first week of general election campaigning. “Politicians must remember that they don’t have a blank cheque”, he said. 

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Working 9 to 5, not a way to make a living

Labour has pledged to deliver a “workplace revolution” with reforms that could see the traditional nine to five replaced with flexible roles. Under the plans, workers will have the right to dictate to their bosses the hours they work. 

Current rules give workers the legal right to request that their hours are changed to better suit their individual circumstances. But Labour’s proposals flip this around in that the onus will be on companies to explain why certain jobs are not suitable for flexible working.

IoD Director of Policy Edwin Morgan said “While flexible working is a good thing, it isn’t possible in all cases, and it’s not clear to us why employers, if they have advertised a job with certain hours or working patterns, should […] have to allow staff to change those on day one” . 

Under statutory guidance, the plans would see businesses being required to create jobs on the basis that they could be done flexibly. Last night Labour indicated that some positions, such as teaching, would not be suitable for flexible working. 

Other proposed Labour reforms include increasing the amount of time new mothers are entitled to maternity pay from nine months to one year, and setting up a new quango called the “Workers’ Protection Agency”. 

Winter is coming 

The boss of Standard Chartered has given in to pressure from investors and agreed to take a pension cut following a shareholder revolt about his retirement benefits. 

The FTSE 100-listed bank had initially planned to award chief executive Bill Winters a pension contribution totalling £474,000 for this year. But it is understood Winters has bowed to pressure and agreed to payments in line with the rest of the bank’s workforce. 

Back in May, 40% of Standard Chartered’s investors refused to support the bank’s new remuneration policy. The policy altered the definition of bosses’ salary by including share-based payments in addition to the sums they were already awarded in cash. 

Winters issued an apology in July for comments he made criticising investors for being “immature and unhelpful” by raising concerns about his pension arrangements. Standard Chartered has declined to comment on today’s story. 

Earlier this year the Investment Association said it would issue warnings to firms granting new directors pension packages that are not in line with that of a majority of staff.  Shareholders have been scrutinising executives’ pensions packages across the board. 

Passporting

Cyprus has decided to revoke the passports of 26 people that were granted citizenship through a controversial “golden passport scheme”. There are concerns that the passports grant these people “back door” access to the EU.

The Cypriot government launched an investigation last month when it was revealed that eight family members of the Cambodian Prime Minister had taken part in the scheme, one of whom is a police chief that has played a central role in tackling political dissent. 

The scheme grants citizenship to people that have invested at least €2 million in property in Cyprus, upon which they exercise full living and working rights in the EU. The scheme was established in 2013, not long after the country’s financial crisis. 

Critics argue the scheme offers entry to individuals to whom it otherwise would not have been granted. The European Commission has encouraged member states to consider security breaches, corruption and tax evasion by enacting stricter checks on applicants. 

In related news, Portugal is seeking to review its own investment-for-citizenship scheme with a view from divesting from property to jobs. 90% of the total investment made into the scheme has gone into the property market, pushing up house prices in Lisbon and Porto.

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