Corbyn wants to ban Co.'s which don't pay living wage from paying dividends Watch

SonOfTheGun
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http://www.telegraph.co.uk/news/poli...ving-wage.html

The Labour leader will call for companies to be prevented from paying dividends unless their staff are paid above the minimum wage
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nulli tertius
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(Original post by SonOfTheGun)
http://www.telegraph.co.uk/news/poli...ving-wage.html

The Labour leader will call for companies to be prevented from paying dividends unless their staff are paid above the minimum wage
He may find the government nicks his policy. As it will be a criminal offence not to pay the national living wage, there is no reason not to prohibit dividends in such cases.
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math42
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Hmm, I'm not sure about this plan. Doesn't seem like it will..

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Reue
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(Original post by SonOfTheGun)
http://www.telegraph.co.uk/news/poli...ving-wage.html

The Labour leader will call for companies to be prevented from paying dividends unless their staff are paid above the minimum wage
What a pointless and toothless policy. Considering payment below the minimum wage is illegal, the management should be facing criminal charges.. not a restriction on dividend payments.
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Farm_Ecology
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(Original post by nulli tertius)
He may find the government nicks his policy. As it will be a criminal offence not to pay the national living wage, there is no reason not to prohibit dividends in such cases.
Wont that just mean the living wage is the minimum wage?
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nulli tertius
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(Original post by Farm_Ecology)
Wont that just mean the living wage is the minimum wage?
The living wage will be the legal minimum wage for people 25+ from April. the national minimum wage will apply to those aged 21-24.
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viddy9
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I'm not sure whether the media have reported on Corbyn's view on dividends accurately, so I'll have to wait for the actual speech.

Ensuring that the ratio of CEO pay to worker pay is fixed or prevented from increasing is certainly a policy proposal worth discussing.

CEOs simply don't deserve the extraordinary pay that they're getting today. The gap between CEO pay and worker pay was much lower a few decades ago (the ratio was usually between 10:1 and 20:1), yet productivity and performance has stayed the same in top corporations, so the massive take-off in CEO pay simply can't be justified (the ratio is as high as 273:1 nowadays).

The whole low-pay issue is pretty much dealt with in places like Scandinavia. Why? Because they have strong trade unions and workers have bargaining power, power which has been systematically dismantled. Proponents of the free-market should be supporting strengthening trade unions and getting union membership rising (an anarcho-capitalist friend I have supports trade unions, for instance). I expect Jeremy Corbyn and Labour will do so, with the support of the OECD who, in their reports, have identified strong trade unions as a key way to reduce inequality whilst promoting economic growth.

Unfortunately, in this country and particularly in the United States, big businesses have been allowed to form monopolies, exploit their workers, and meanwhile the government has weakened unions, meaning that workers are stuck in low-paid jobs. As Jeremy Corbyn has said, raising the pay of the poorest in society strengthens the economy. Both the IMF and the OECD have found that higher inequality reduces economic growth.
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nulli tertius
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(Original post by Reue)
What a pointless and toothless policy. Considering payment below the minimum wage is illegal, the management should be facing criminal charges.. not a restriction on dividend payments.
Enforcement of the NMW is with HMRC with limited enforcement resources (it brings in no tax). A restriction on dividends would make most public companies ensure that the audit committee of non-execs verified compliance. As I say, don't be surprised if this isn't in Osborne's next budget. Corbyn has been naive announcing workable policy initiatives far too early.
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Reue
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(Original post by nulli tertius)
Enforcement of the NMW is with HMRC with limited enforcement resources (it brings in no tax). A restriction on dividends would make most public companies ensure that the audit committee of non-execs verified compliance.
Non-board level employee pay is not the responsability of an audit committee.

Also: Why punish investors for management's illegal actions?
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barnetlad
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(Original post by nulli tertius)
He may find the government nicks his policy. As it will be a criminal offence not to pay the national living wage, there is no reason not to prohibit dividends in such cases.
The national living wage as defined by Gideon is not that as defined by the Living Wage Foundation, especially in London, and will be above 25 year olds not 18. The Tories proposal should be called something such as the Increased Minimum Wage or the New Minimum Wage.
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nulli tertius
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(Original post by Reue)
Non-board level employee pay is not the responsability of an audit committee.
The shareholders will make it their responsibility, if it means that dividends cannot be paid.

Also: Why punish investors for management's illegal actions?
The investors are always punished for a company's illegal activities. Any fine on a company ultimately falls on its investors but the fine at present is not significant enough for investors to take notice. This provides a method of ensuring compliance without imposing over-large financial penalties. Don't expect any sympathy from the Treasury here.
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nulli tertius
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(Original post by barnetlad)
The national living wage as defined by Gideon is not that as defined by the Living Wage Foundation, especially in London, and will be above 25 year olds not 18. The Tories proposal should be called something such as the Increased Minimum Wage or the New Minimum Wage.
That is an argument about rates. Corbyn's idea can be adopted regardless of the rate at which it is adopted.
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Reue
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(Original post by nulli tertius)
The shareholders will make it their responsibility, if it means that dividends cannot be paid.
The shareholders have no direct control over how the company is run.


(Original post by nulli tertius)
The investors are always punished for a company's illegal activities. Any fine on a company ultimately falls on its investors but the fine at present is not significant enough for investors to take notice. This provides a method of ensuring compliance without imposing over-large financial penalties. Don't expect any sympathy from the Treasury here.
Again, see above; the investors have no direct control over how the company is run. So you're punishing them for something they have no involvement or, likely, knowledge of.
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nulli tertius
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(Original post by Reue)
The shareholders have no direct control over how the company is run.




Again, see above; the investors have no direct control over how the company is run. So you're punishing them for something they have no involvement or, likely, knowledge of.
BP paid a fine of $20Bn for Deepwater Horizon. That will definitely hit every shareholder in the pocket. None of those shareholders had the slightest influence over how that rig was operated or how BP monitored that operation. Nevertheless the shareholders were punished. That is how capitalism works. If you invest in a company, you take the rough with the smooth.
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Reue
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(Original post by nulli tertius)
BP paid a fine of $20Bn for Deepwater Horizon. That will definitely hit every shareholder in the pocket. None of those shareholders had the slightest influence over how that rig was operated or how BP monitored that operation. Nevertheless the shareholders were punished. That is how capitalism works. If you invest in a company, you take the rough with the smooth.
It didnt. BP dividends have risen almost continuously from 2011 to 2016.
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nulli tertius
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(Original post by Reue)
It didnt. BP dividends have risen almost continuously from 2011 to 2016.
And they would have risen by more if there had been another $20Bn in the kitty
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Reue
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(Original post by nulli tertius)
And they would have risen by more if there had been another $20Bn in the kitty
Complete speculation. The dividend rise looks pretty consistent with comparable competitors. If anything it's at a higher trajectory than say, Shell.
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nulli tertius
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(Original post by Reue)
Complete speculation. The dividend rise looks pretty consistent with comparable competitors. If anything it's at a higher trajectory than say, Shell.
I am sorry. This $20Bn did not come from the magic money tree. I cannot engage with people who not accept basic tenets of economics.
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Reue
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(Original post by nulli tertius)
I am sorry. This $20Bn did not come from the magic money tree. I cannot engage with people who not accept basic tenets of economics.
I think you're struggling to understand that dividend payout often has little relation to gross profit for the year. Fortunately the example you've picked (BP) is an excellent example of a company who's dividend payouts have been completely unrelated to the year's gross profit.

Nevermind though, saves me the effort of trying to explain the advanced tenets of economics to you
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Jammy Duel
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(Original post by nulli tertius)
He may find the government nicks his policy. As it will be a criminal offence not to pay the national living wage, there is no reason not to prohibit dividends in such cases.
I suspect he will mean the over inflated "living wage with major comforts" as given by the living wage foundation rather than the "national living wage"

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