A plague on all your houses

BRITAIN'S business leaders imported from the Low Countries - Luc Vandevelde at M&S and Ben Verwaayen at BT - escaped lightly at the latest annual meetings.

Despite City urgings of opposition on a range of issues, from the golden hello paid to Vittorio Radice at M&S to Verwaayen's generous housing allowance, votes against were disappointingly low at 8.9% and 11.2% respectively.

This was a long way from the institutional protests seen at GlaxoSmithKline in May when Jean-Pierre Garnier's potential severance package of £22m was symbolically rejected.

Arguably the issues at GSK are more significant - hence the rebellion. But I have the distinct impression that institutions have started to back away from public protest, now that the media spotlight is less intense.

No one should be blasè about carelessness with shareholders' cash. However good a job Verwaayen is doing at BT, investors must have severe reservations that the chief executive is receiving a £250,000 housing allowance over each of the next three years.

In fact, housing has become the new 'fat cat' status symbol. Luc Vandevelde may have given up his share and bonus package for an innovative wage packet paid in shares. But he will continue to have his suite in Claridges on visits to London.

The extraordinary moving costs for Kingfisher finance director Helen Weir clearly cannot be in the broader interests of shareholders. Nor should investors be expected to pick up the tab for Rose Marie Bravo's luxury London apartment complete with maid service - a requirement spelled out in her contract.

This is all madness for people who are already excellently rewarded. This is some way short of US excesses like the $11,000 shower curtain, but still undesirable.

Institutions need to work up the same venom about these practices as on severance pay. In some respects, housing allowances of the kind charged by Bravo are even more insidious in that they recur forever. Similarly, just nodding through bonuses at BT at up to 100% of salary without the most stretching performance targets needs to be discouraged.

Perhaps investors are working behind closed doors to change such practices. It is unlikely. Most boards seem surprised when they are told investors are dissatisfied.

The CBI is rightly on the way to reforming pay for failure by supporting a code for more exacting standards, including one-year contracts, immediate disclosure of severance payments, and monthly payouts that can be halted if the ousted boss moves to a new post. Such self-regulation is to be encouraged.

But sorting out severance pay is no excuse for leaving other executive exuberances untouched.

Tax and spend
IT IS worth standing back and seeing what has happened to the public sector under Labour. We know that it is growing all the time.

The numbers of people soaked up in public- sector jobs almost exactly matches those lost in manufacturing. Still, we should be grateful that while the jobless rate is 9.4% in Germany and 9.1% in France, it fell 0.1% to 5% in Britain in the three months to March.

Just as fascinating is new detail on where our taxes are going. The Treasury data show the scale of increase in spending on public services.

Last year, spending on education was £53bn, up from £39bn when Labour took office; health is up to £81.5bn from £57bn and social protection (as the government likes to call social security) has climbed to £122bn from £99bn.

Overall expenditure is up from £333bn to £420bn. This government, of course, came to power committed to investing in the nation's infrastructure. The money has poured in at an astonishing rate. But results so far point to waste and indigestion.

Breaking up
RICHARD Giordano's great contribution to British commercial life was his vision of British Gas as three separate enterprises in exploration, distribution and retailing.

A similar step was contemplated by BT after the telecoms boom when it disposed of Yell and mmO2, but it rejected separation of its wires and retail businesses.

Along comes Banc of America a couple of years later and recommends it does precisely this, giving the growth areas of broadband and retailing a chance to breathe.

It is not the only former nationalised industry to come under pressure. The Transport Select Committee is understood to be setting its sights on a break up of BAA, which has dominant control of Britain's airports.

Such radical changes may make sense for consumers. Investors will be more interested in creating shareholder value, BG-style.