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Politics: Ministers may act to curb `fat cat' pay increases

Tuesday 05 May 1998 18:02 EDT
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LEGISLATION to curb "fat cat" pay rises by directors of private companies could be introduced if the City refuses to heed the Government's calls for pay restraint, writes Colin Brown.

The warning by Lord Haskel, a government minister in the Lords, reinforced the threat to legislate against excessive salaries made earlier this year by Margaret Beckett, President of the Board of Trade. Lord Haskel told peers that the Government had not ruled out legislative action. But its preference was for voluntary restraint by the corporate sector, rather than enshrined in legislation. If companies did not comply with this, "the Government will take a more interventionist approach".

Lord Dormand of Easington (Lab) said: "Many of the payments made recently to chairmen and directors have reached a degree of obscenity which has never been seen before, particularly when some of the companies concerned have been losing money."

Lord Haskel said the Government was "concerned". Such awards brought the whole system into "disrepute".

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