By Merryn Somerset Webb – MoneyWeek Magazine (Great Britain) –
The consensus view on Philip Hammond’s Autumn Statement is that it wasn’t very interesting. But the consensus may be wrong. To see why, consider something he dropped in around the middle (when most people had stopped listening).
“We believe that a market economy is the best way of delivering sustained prosperity to the British people,” he said. “We will always support a market-led approach; but we will not be afraid to intervene where there is evidence of market failure.”
He then went on to announce that the letting fees charged to UK tenants are an example of market failure and abolished them (see my blog for our take on that). This made some sense. Because letting fees are charged to the tenant, who is unable to shop around, they have risen to unreasonable levels.
The new rules should change that. And the key point is that we can read these three lines of Hammond’s speech as a summary of the line that the May government will be taking on an awful lot of things.
They aren’t going to just get out of the way of the private sector. They are going regularly to intervene to try to make the private sector better.
Those in any doubt should turn to our cover story, where we look at the effective market failure behind ludicrously OTT executive pay and then to politics and economics, where we touch on Theresa May’s plans to do something about it.
There is talk of worker representation on boards, of binding shareholder votes on pay and of publishing pay ratios (between the highest and lowest salaries in a firm) to shame boards into getting a grip.
Subscribe to read more here. (Paywall)