A 12-week consultation launched by the Burnham government threatens to entrench the very neoliberal principles it was elected to dismantle, according to a damning editorial assessment of the proposals. The review, framed as a crackdown on bureaucratic red tape, would strip away key transparency measures on executive pay and shareholder accountability — raising serious questions about whether Labour’s much-vaunted commitment to fairness is anything more than rhetoric.
The Ghost of Friedman Still Looms Large
The debate over what corporations exist to do is, at its core, a profoundly political one. In 1970, the economist Milton Friedman published a now-infamous piece in the New York Times declaring that the sole social responsibility of business was to boost profits. He dismissed the notion that chief executives should concern themselves with providing decent employment as “pure and unadulterated socialism.” That philosophy proved remarkably durable. Today, British chief executives earn roughly 130 times the wage of the average worker — a chasm that has widened dramatically over decades of deregulation and deregulation-friendly policy.
The consultation now under way appears to treat that legacy not as a problem to be solved, but as the natural order of things. By prioritizing shareholder returns above all other considerations, the government’s proposals echo the very worldview Friedman championed half a century ago.
What the Consultation Actually Proposes
The review, initially pitched as part of a broader mission to cut administrative burden, targets several pillars of corporate transparency. Among the most contentious suggestions is the removal of mandatory disclosure on the gap between chief executive and median worker pay. The rationale appears to be that annual reporting requirements have become excessive, with some business reports stretching to 98,000 words. Yet critics argue this conflates genuine simplification with the wholesale dismantling of accountability.
The pay ratio is no trivial metric. British chief executives already command compensation packages that are 95% higher than their counterparts across Europe. Research from Harvard Law School has demonstrated that pay ratios serve as a meaningful indicator of how much a firm invests in its workforce — information that matters enormously to both employees and investors. Studies have also shown that consumers, when armed with this data, are more inclined to patronise companies with narrower pay gaps, creating a market incentive for fairer practices.
Beyond pay transparency, the consultation recommends eliminating annual shareholder votes on director remuneration. The justification offered is that such votes already occur on a triennial basis. Yet annual votes were themselves a progressive reform introduced by Theresa May’s Conservative government to curb what she called the “unacceptable face of capitalism.” The GC100 group of corporate leaders has actively lobbied for their removal. If Labour capitulates on this point, it would be reversing a Tory-era safeguard designed to rein in boardroom excess — a deeply uncomfortable irony for a party that campaigned on reversing inequality.
Virtual AGMs and the Erosion of Accountability
Another proposal that has drawn fierce criticism is the move towards fully virtual annual general meetings. While online formats gained traction during the pandemic, opponents argue they fundamentally undermine the democratic function of these gatherings. Virtual meetings tend to be shorter in duration and make it significantly harder for shareholders to pose pointed questions. The physical presence of attendees creates a form of pressure that remote settings simply cannot replicate.
This concern is not theoretical. Earlier this year, more than 50% of BP shareholders voted against a resolution that would have replaced in-person AGMs with online-only events. Shareholder groups and climate campaigners united in their opposition, arguing that digital formats represented a direct threat to corporate accountability. The government’s decision to champion virtual meetings despite this overwhelming shareholder sentiment suggests a troubling disconnect between policy and the people who actually own these companies.
A Better Path Forward
If the consultation’s central premise — that reporting is unnecessarily burdensome — holds any merit, the answer should not be to remove safeguards but to redesign the entire framework around the interests of workers and communities. Voluntary schemes such as the B Corporation movement already demonstrate that a more holistic approach to disclosure is both feasible and effective.
A genuinely transformative programme would go further still. It would mandate worker representation on company boards and require full transparency on pay levels — not just for executives but for every employee earning below the living wage. As the legal scholar Katharina Pistor has observed, corporate law is itself a mechanism that generates inequality. If this government is serious about ending neoliberalism, it must abandon this consultation entirely and begin again with a framework that treats fairness as a foundational principle rather than an afterthought.
Why it Matters
The stakes here extend far beyond the length of an annual report or the format of a shareholder meeting. This consultation signals whether a Labour government is willing to genuinely challenge the structures that have produced decades of widening inequality, or whether it will quietly preserve them under the guise of administrative reform. Removing pay ratio disclosures and weakening shareholder votes does not simplify corporate governance — it obscures the mechanisms through which wealth is concentrated and power is exercised. For a government that promised to be the most pro-worker in British history, the direction of these proposals sends a deeply concerning message: that the interests of shareholders remain paramount, and the rest of society will have to settle for whatever transparency is left over.
