Day: June 9, 2018

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Press release: UK’s biggest firms will have to justify pay gap between bosses and their workers

  • For the first time ever, listed companies will legally be required to annually publish and justify pay difference between chief executives and their staff
  • the directors of all large companies will also have to set out how they are acting in the interests of employees and shareholders
  • reporting is part of the government’s modern Industrial Strategy which is helping ensure the UK remains a world-leading place to invest and do business.

Big firms will have to justify their chief executives’ salaries and reveal the gap to their average UK worker, under new laws to be laid in Parliament tomorrow (Monday 11 June).

It means that for the first time, UK listed companies with more than 250 UK employees will have to disclose and explain this difference – known as ‘pay ratios’ – every year.

This follows concerns that some chief executives have been receiving salaries that are out-of-step with company performance.

These new regulations are part of a package of reforms which will hold big businesses to account for the salaries they pay, while giving employees a greater voice in the boardroom.

Business Secretary Greg Clark said:

One of Britain’s biggest assets in competing in the global economy is our deserved reputation for being a dependable and confident place in which to do business.

Most of the UK’s largest companies get their business practices right but we understand the anger of workers and shareholders when bosses’ pay is out of step with company performance.

Requiring large companies to publish their pay gaps will build on that reputation by improving transparency and boosting accountability at the highest levels, while helping build a fairer economy that works for everyone.

The new regulations form a core part of the government’s modern Industrial Strategy which aims to build on the UK’s strong reputation and make sure our largest companies are more transparent and accountable to their employees and shareholders.

In addition to the reporting of pay ratios, the news laws will also:

  • require all large companies to report on how their directors take employee and other stakeholder interests into account
  • require large private companies to report on their responsible business arrangements
  • require listed companies to show what effect an increase in share prices will have on executive pay to inform shareholders when voting on long-term incentive plans

Responding to the government’s new corporate governance laws, the chief executive of the Investment Association (IA) Chris Cummings said:

The UK has a global reputation as a leader in corporate governance and we welcome today’s package of reforms as they focus on the long-term interest of all company stakeholders, including shareholders and employees.

Investors are demanding greater director accountability and transparency on executive remuneration. Pay ratios will shine a spotlight on what executives are being paid compared with their workforce, and investors will expect Boards to articulate why the ratio is right for the company and how directors are fulfilling their duties.

Through the IA’s Public Register we are seeing investors hold business to account. The IA wants to ensure UK listed companies are run in a way that delivers long-term returns for savers and pensioners.

Director of the High Pay Centre Luke Hildyard said:

Pay ratios provide an insight into the culture and employment practices of major companies that is useful to investors, workers and wider society alike.

This is a welcome move that will greatly improve public understanding of the pay gap between those at the top and low and middle-income earners.

We hope that it will initiate a more informed debate about what represents fair, proportionate pay for workers at all levels.

Chief UK Policy Director of the Confederation of British Industry (CBI) Matthew Fell said:

The CBI is clear that high pay is only ever justified by outstanding performance. High pay for mediocre or poor performance is unacceptable.

This legislation can help to develop a better dialogue between boards and employees about the goals and aspirations of their business, and how pay is determined to achieve this shared vision.

Ratio comparisons between sectors and firms will be as meaningless as comparing apples and oranges. What’s most important is that all businesses make progress towards fair and proportionate pay outcomes.

UK Government Minister Lord Duncan said:

It only takes poor behaviour from a small number of companies to damage the public’s trust in big business. These new laws will ensure that differences in salary within large companies across Scotland and the whole of the UK – and the reasons for the variations – will be there for all to see.

Improving transparency and accountability in this way, plus other initiatives such as giving employees a voice in the boardroom, will help create a more equal and fair society while ensuring that the UK remains a world-leading place to invest and do business.

The new laws follow last year’s corporate governance reforms which sought to increase boardroom accountability.

Subject to Parliamentary approval, the regulations will come into effect from 1 January 2019 meaning that companies will start reporting their pay ratios in 2020.

The government has already:

  • supported the Investment Association’s world-first public register of FTSE-listed companies where more than one fifth of shareholders have opposed resolutions on executive pay packages, directors’ re-appointments and other issues
  • appointed James Wates to lead a coalition of industry and wider society bodies in drawing up the UK’s first-ever set of corporate governance principles for large private companies
  • launched research into the use of share buyback schemes to see if they are being used to artificially inflate executive pay
  • asked the Financial Reporting Council (FRC) to revise its Corporate Governance Code to strengthen the voice of employees and other stakeholders in the boardroom
  • proposed new reforms to ensure that directors dissolving companies to dodge debts and avoid facing accusations of misconduct will face investigation for the first time.

Link: Press release: UK’s biggest firms will have to justify pay gap between bosses and their workers
Source: Gov Press Releases

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Press release: Government steps up the fight against waste criminals

Waste criminals act illegally to evade landfill tax, undercut responsible waste disposal businesses, operate illegal waste sites, export waste illegally and fly-tip – blighting communities with bad smells, fly infestations and fires.

Their activity cost the English economy more than £600 million in 2015 and the review announced by the Environment Secretary today is the next step in the government’s ongoing work to tackle the crime – which is already a serious offence with tough penalties.

A Call for Evidence launched today (10 June) will enable a wide group of people to have their say on ways to crack-down further on Organised Crime Groups (OCGs), who profit from waste crime.

The review will be chaired by Lizzie Noel, a Non-Executive Director at Defra.

Environment Secretary, Michael Gove, said:

Organised criminals running illegal waste dumps and fly-tipping are blighting local communities. They cost our economy vast amounts of money, pollute our environment and harm our wildlife.

We must crack-down on these criminals who have no regard for the impact they have on peoples’ lives. The time is right for us to look at how we can best tackle these antisocial and inexcusable crimes.

The review will:

  • Consider the types of crimes being committed and organised crime groups involved;
  • Consider the environmental, community and economic impacts of serious and organised waste crime;
  • Consider how the Environment Agency, other organisations, and the law enforcement system can work together to tackle the threat;
  • Make recommendations for a strategic approach to serious and organised waste crime.

Minister of State for Security and Economic Crime, Ben Wallace, said:

Organised crime groups exploit any opportunity to make money. Our local communities are being scarred by the illegal dumping of waste, while at the same time people are being conned into placing contracts with dodgy waste firms.

We are committed to ending this scourge and I look forward to exploring what more Defra, local authorities, the private sector and police can do on this issue.

More than 850 new illegal waste sites were discovered by the Environment Agency in 2016-17. While an average of two illegal waste sites are shut down every day, they continue to create severe problems for local communities and business, particularly in rural areas, as well as posing a risk to key national infrastructure.

A study by the Home Office suggests that criminals may also use waste management activities such as operating illegal waste sites as a cover for crimes such as theft, human trafficking, fraud, drugs supply, firearms supply and money laundering.

Review chair Lizzie Noel has more than 20 years’ experience of senior roles in both the private and public sectors. She will engage with a wide range of stakeholders, and the Call for Evidence will enable a wider group of people to have their say.

Lizzie Noel said:

The health of our communities, environment, and economy is being harmed by organised groups committing serious waste crimes.

This review is an opportunity to properly understand the extent of this criminal activity, and I look forward to working with a range of partners to ensure our response is robust and effective.

Since 2014, the Government has given the Environment Agency an extra £60million towards enforcement work to tackle waste crime. This extra investment has shown a return of about £5 for every £1 extra spent.

Today’s announcement builds on a range of new measures from the government to tackle waste crime, including new powers for the Environment Agency to lock the gates to problem waste sites to prevent waste illegally building up and powers to force operators to clear all the waste at problem sites, and extending landfill tax to include material disposed of at illegal waste sites with effect from April 2018.

Sir James Bevan, Chief Executive of the Environment Agency, said:

Last year, we closed down two illegal wastes sites a day and were granted new powers to complement our existing enforcement efforts. Our officers are also out in communities, preventing and disrupting criminals through our intelligence led investigations, and also dealing with the consequences of illegally dumped waste to the environment and the wider community.

We welcome the opportunity to review how best we deploy our resources and strengthen ties across government and with the police to target organised criminal rings behind illegal waste operations, and bring perpetrators to justice.

The Government has also recently given councils powers to hand out on-the-spot fines to fly-tippers, made it easier for vehicles suspected of being used for fly-tipping to be stopped, searched and seized, and later this year will introduce new fixed penalty notices for householders who pass their waste to a fly-tipper, subject to Parliamentary approval.

The review is due to be completed by September 2018.

Further information:

  • Serious organised crime is the planning, coordinating and committing serious offences, whether individually, in groups and/or as part of transnational networks
  • Lizzie Noel will be supported by an advisory panel bringing a wide range of experience in serious organised crime, security, and waste. The panel comprises Julia Mulligan, Police and Crime Commissioner for North Yorkshire, Colin Church, Chief Executive Officer at Chartered Institute of Waste Management, and Craig Naylor, Deputy Chief Constable in Lincolnshire Police.
  • Householders can check if a waste carrier is an approved carrier on the Environment Agency website.
  • The cost of waste crime to the English economy being over £600m in 2015 is from Rethinking waste crime, Environmental Services Association Educational Trust, 2017.
  • The figure of the extra investment in the EA having shown a return of about £5 for every £1 extra spent on tackling waste crime is from Waste crime interventions and evaluation project report.
  • The Home Office study referred to is Understanding organised crime: estimating the scale and the social and economic costs, October 2013.
  • For further information please contact Defra press office on 020 8225 7317 or out of hours on 0345 051 8486

Terms of Reference

  • The Serious and Organised Waste Crime review is initiated by, and will report to, the Secretary of State for Environment, Food and Rural Affairs.

Purpose

  • To consider, in depth, serious and organised waste crime – including our response to it – so that we can make actionable recommendations for a strategic approach to waste crime.
  • This review will directly inform a strategic approach to waste crime, which will be published in the new resources and waste strategy. This strategy is part of the Government’s environmental policy following the 25-year plan and the Clean Growth strategy. The review will also help shape future direction of work in this area.

Objectives

The review will:

  • consider the extent and nature of crimes being committed, and the types of organised crime groups involved
  • consider the environmental, community and economic impacts of serious and organised waste crime
  • consider how the Environment Agency is responding to the threat
  • consider the ability of the Environment Agency, other organisations, and the law enforcement system as a whole, to work together to tackle the threat
  • make recommendations for a strategic approach to serious and organised waste crime
  • make recommendations for the future direction of work

In implementing the review, the review team should also take account of:

  • the enforcement landscape and the multiple organisations involved
  • the sustainability, scalability, deliverability and cost-benefit trade-offs of responses to serious and organised waste crime
  • wider work underway in Defra, the Home Office and the Environment Agency
  • lessons learnt and examples of best practice from a wide range of stakeholders

Scope

  • The review will take a broad approach, to understand the scale, nature and impact of serious and organised crime and current and potential response to it. The focus will be on England only.
  • The review will concentrate on organised criminal involvement in waste crime, characteristics of criminal enterprises, intelligence gathering and enforcement effectiveness. It will consider fly-tipping and smaller waste crime incidents only in connection to the review’s understanding of organised criminality.

Roles and responsibilities

  • The review will be chaired by Defra Non-Executive Director Lizzie Noel. The review will report to the Defra Secretary of State and Parliamentary Under-Secretary of State.

Ways of working

  • The Chair will be responsible for overseeing the strategic direction and progress of the review and delivery of the final report. The Chair will work closely with the Head of Waste and Recycling, who will oversee the review within Defra. Progress reviews will be conducted monthly.
  • The Chair, with advice taken from the core working group, may seek to access wider expertise dependent on need.
  • The review will be supported by a Secretariat within Defra, and by staff within Defra and the Environment Agency throughout.
  • A communications strategy and stakeholder engagement plan will be developed. All communication with the media will be undertaken through Defra Communications Team or the Environment Agency Communications team.

Timing

  • The review will commence in June 2018 and is due to be completed by September 2018.

Reporting

  • An evidence-based report will be submitted to Defra Ministers for consideration, detailing the findings of the review.

Link: Press release: Government steps up the fight against waste criminals
Source: Environment Agency

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Press release: Hostile states to face rapid and unified international response

Hostile state activity will be met with a rapid and unified G7 response, including greater intelligence sharing, under an agreement secured by Prime Minister Theresa May.

The move will also see hostile states publicly ‘called out’ for their egregious behaviour – with coordinated international attribution of cyber and other attacks.

Speaking at the G7 Summit in Quebec, the Prime Minister has emphasised that recent events, including the reckless use of ‘NotPetya’ ransomware and the attempted murder of the Skripals in Salisbury, have demonstrated the importance of a unified international response to send a clear message that such hostile state activity will not be tolerated.

The Prime Minister has stated that calling out malicious activity helps to end hostile states’ false sense of impunity, demonstrates our awareness of their activity, and underlines our willingness to defend ourselves.

At the G7 Foreign Ministers meeting last month, the UK proposed a new, more formalised approach to tackling foreign interference across the G7.

And today, G7 leaders have agreed to establish a new Rapid Response Mechanism (RRM).

The Prime Minister said the agreement sent a strong message that interference by Russia and other foreign states would not be tolerated.

This G7 initiative will support preventative and protective cooperation between G7 countries, as well as post-incident responses.

It includes:

  • sharing of threat intelligence, including hostile activity, techniques and practices
  • Improving understanding of partner countries’ policies and thresholds for taking action
  • support for independent international institutions
  • work with industry to strengthen physical and digital infrastructure
  • co-ordinated attribution of hostile activity
  • joint work to assert a common narrative and response

Speaking at the G7 Summit, the Prime Minister said:

There is no doubt that foreign interference in our democratic institutions and processes, and other forms of hostile activity, pose a strategic threat to our shared values and interests.

So I welcome today’s agreement that the G7 will exchange information, co-ordinate action, and develop strategies to reinforce our democracies, strengthen our societies’ resilience and uphold freedom of expression and a free and independent media in the face of this growing threat.

Today’s announcement shows that the G7 will not tolerate foreign interference in any one of our democracies, that we are getting organised, and that we will take coordinated action against those who seek to violate the rules-based international system.

Calling out malicious activity helps to end hostile states’ false sense of impunity, demonstrates our awareness of their activity, and underlines our unwavering willingness to defend ourselves.

The Prime Minister has also called for additional measures to curb Russia’s ability to undermine the international rules-based system, including:

  • doing more together as the G7 to better understand illicit money flows and then agree concrete actions to stop dirty money undermining our democracies
  • sharing more information so that Russian intelligence agents expelled from one country do not simply enter another country

The UK has also lobbied for a robust, united international position to uphold and strengthen the global prohibition on the use of chemical weapons.

Today the G7 has discussed its collective commitment to the Chemical Weapons Convention and called on all countries to support the Organisation for the Prohibition of Chemical Weapons (OPCW) special Conference of States Parties, which is expected to take place later this month.

The Prime Minister has urged fellow leaders to capitalise on the important opportunity this meeting presents to empower the OPCW to attribute responsibility for chemical weapons attacks, strengthening the global norm against chemical weapons use.

Link: Press release: Hostile states to face rapid and unified international response
Source: Gov Press Releases