Prime Minister's vow to slap huge fines on greedy bosses after Carillion collapse

Posted on Jan 22 2018 - 9:52am by admin

Following the collapse of construction company Carillion, where senior managers received large bonuses even as employees were losing their jobs, the Prime Minister singled that she had enough corporate elites abusing the system.

In an article at the weekend she outlined proposals which include giving the pensions regulator specific powers to issue punitive fines to company directors in cases of clear wrongdoing.

Mrs May revived the pledge she made upon taking power to prioritise “ordinary working people” rather than the “privileged few”.

Several ex-executives at failed outsourcing giant Carillion received big pay and perks packages before it collapsed.

Mrs May insisted “tough new rules” will be introduced to deal with “executives who try to line their own pockets by putting their workers’ pensions at risk – an unacceptable abuse we will end”.

She added: “Too often we have seen top executives reaping the big bonuses for recklessly putting short-term success. Those who do so will be forced to explain themselves.”

It comes after a Tory former minister attacked Mrs May’s leadership, warning the PM it was “time to raise your game”.

He tweeted: “There is a timidity and lack of ambition about Mrs May’s Government which means it constantly disappoints.

“Time to raise your game Prime Minister”.

Mrs May previously signalled a desire for reform after BHS went into liquidation after Sir Philip Green sold it for £1 while pocketing £586million from the company dividends.

The chain’s collapse left a £571million black hole in its pension fund.

Concerns also date back to the banking collapse in which Royal Bank of Scotland had to be bailed out by the taxpayer and taken into state ownership after a record loss of £24.1billion in 2009.

Despite this failure, RBS’s boss Fred Goodwin was given a £16million pension fund while thousands of people had their investments and savings wiped out.

Last night, the Institute of Directors, which represents many business leaders appealed for a consultation.

Roger Barker, its head of corporate governance, said: “There needs to be extensive consultation with involvement from industry to ensure we strike a balance that safeguards all stakeholders including employees, pensioners and shareholders.”

Chairman of the Commons Work and Pensions Committee, Labour’s Frank Field, welcomed Mrs May’s comments and called for legislation “to be brought forward to clamp down on avoidance and protect pensions”.

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