黑洞社区

Vince Cable, leader of the Liberal Democrats, has called for a new scheme to cap bonuses paid out to executives at UK housebuilders who benefit from the government鈥檚 Help To Buy programme.

In a letter to Stewart Baseley, executive chairman of the Home Builder鈥檚 Federation (HBF) and seen by 黑洞社区, Cable 鈥� who has called for the scrapping of the Help To Buy initiative 鈥� said companies were profiting from the taxpayer-funded scheme and executives were reaping excessive payouts, citing the 鈥渄isturbing鈥� case of Persimmon, whose chief executive Jeff Fairburn earlier this year pocketed a bonus of 拢110m.

Cable said executives were being rewarded, in part, as a result of a government support programme 鈥渁s opposed to executive initiative鈥�.

Fairburn later agreed to hand back 拢30m of his payout, but bosses at rival firms including Redrow chairman Steve Morgan publicly criticised Persimmon at the time over its executive remuneration policy.

While Cable labelled the payments as 鈥渧ery large, even by the extreme standard of British business鈥� the LibDem leader said he did not want Parliament to be forced to come down 鈥渉eavy handedly on housebuilders through legislation鈥�. Instead he proposed a voluntary code for the country鈥檚 biggest listed developers to be in place 鈥渋n a matter of months, rather than years鈥�.

Executives at firms including Barratt, Taylor Wimpey, Persimmon, Bellway, Berkeley and Redrow would have to agree to a cap on bonuses under a scheme Cable said could be designed and administered by the HBF, although it would need to be 鈥渧etted and administered鈥� by corporate watchdog groups.

鈥淭he cap could still be generous by corporate standards, but we must never again see a situation where just three executives are in line for a bonus pot of well over 拢200m, as was the case at Persimmon this year,鈥� he added.

Cable has trained his sights on the housing sector before, telling 黑洞社区 in July that the 鈥渄eveloper-led model鈥� was failing and 鈥渄oesn鈥檛 work because land prices are too high and, by the time this is factored into the price of houses with the developers鈥� margin, they鈥檙e just unaffordable鈥�.

He said he would create a government agency based on the model of new town corporations, which would have borrowing and compulsory purchase order powers.

As well as wanting to bin Help To Buy Cable would also dispense with the Right To Buy, which gives council tenants the right to buy their property at a discount, which he says reduces the amount of available local authority housing stock, although he would leave it up to the discretion of local councils if they wanted to continue the programme.

The HBF said it would respond 鈥渋n full鈥� to Cable鈥檚 letter 鈥渙nce we have considered his letter and liaised with members on how we approach his suggestions, but ordinarily it is the responsibility of non-execs and shareholders to set the parameters of bonus schemes鈥�.