Chuka Umunna MP, Labour's Shadow Business Secretary, commenting on the Kay Review, published today, said:
"Professor John Kay is right to draw attention to a financial services sector which has too often served financial intermediaries rather than the needs of the real economy. This is precisely the point which Ed Miliband made earlier this month when he called for a return to stewardship banking.
"Professor Kay is right to draw attention to the misalignment of pay incentives which have encouraged short termism and risky behaviour. That is why Labour has called for measures such as putting an employee representative on remuneration committees, forcing fund managers to disclose how they exercise voting rights and changing Board nomination committees so they are composed of shareholders, to better align what executives and financial intermediaries do with the interests of shareholders and customers. The Government has acted as a roadblock to all of these proposals, and Ministers have U-turned on their flagship policy to introduce annual binding shareholder votes.
"One of the best ways of encouraging long-termism is by providing business with policy certainty. But, as British Chambers of Commerce Director General John Longworth has pointed out, Government U-turns and indecision have created a difficult climate and huge uncertainty for firms looking to invest.
"Overall we warmly welcome the publication of the Kay Review and will examine its proposals in detail. We hope the government will do the same."