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THE resignation of Persimmon chairman Nicholas Wrigley over a disgusting £128 million bonus given to the housebuilding firm’s chief executive Jeff Fairburn gives the lie to Tory and business claims to be “responsible” and “fair.”
And it is truly disgusting —equivalent to £1,000 for each of the 128,000 children who will wake up homeless on Christmas Day.
The fact that Wrigley, an ex-banker, failed to impose restraint on Fairburn’s sordid payout — or any of the £800m Persimmon is paying to 150 senior bosses — should also be a reason to rethink placing workers on company boards or pay committees.
Wrigley must surely realise what these bumper bonuses will do for the firm’s reputation and, if he tried at all, could not stop them from going ahead. Now he’s resigned his £200,000 a year post over it.
It is reported that the chairman pressed Fairburn to hand over some of the shameful stash to charity but was rebuffed, the poor thing.
Not that it would change the fact that Persimmon has since 2013 been the beneficiary of a ludicrous amount of government support, as have all private housebuilders, through the humongous handout that is the Help to Buy loan scheme.
Help to Buy has effectively served as a gigantic subsidy — inflating prices by handing out nearly £5 billion in loans to buyers by the start of this year.
It has restored firms’ profit margins to pre-crash levels of about 25 per cent, boosted their share prices, padded shareholders’ dividends — and done absolutely nothing to close the yawning gap between the amount of houses built each year and the amount of new houses needed each year.
Such companies have no incentive to close that gap, because it would mean a hit to their profits.
It’s easy to recognise Help to Buy as a colossal failure — if you’re interested in increasing the number of new homes and ending the housing crisis.
If you’re a Tory government looking to prop up your mates in the construction sector, however, it’s an inordinately successful scheme.
It has even provoked the ire of those notorious critics of capitalism at the Financial Times, with markets commentator Bryce Elder describing it as “literally the worst housing policy it’s possible to think of.
“We’ve had 400 per cent returns for an effective cartel industry that has been incentivised by hopeless government policy to hoard, landbank and not build houses.”
Which is of course why Theresa May promised in early October to funnel another £10bn into it.
Only a drastic change of course can correct this — and that must be to strip private housebuilders of the control they wield over our lives.
The idea of a home as an asset, a thing of value to be sold and traded and leveraged, is an affront to basic human dignity.
It is absolutely unacceptable that so many thousands of families, and 128,000 children, will wake up without a home of their own this Christmas. It is unacceptable that so many people are forced to sleep rough on our streets, suffering while the likes of Jeff Fairburn drink and be merry. And it is unacceptable that so many are impoverished by high rents and mortgages, only one pay day away from homelessness.
A massive programme of council housebuilding can change this — homes for human need and not private profit.
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