‘We’ve had some very frank discussions on the commission about Britain’s economy,” says Dame Helena Morrissey, the fund management executive and one of the most senior women in the City.
The head of personal investment at Legal & General was invited to join the Institute for Public Policy Research’s commission on economic justice after a conversation with the thinktank’s boss, Tom Kibasi. “The idea of sitting back and discussing radical proposals was appealing.”
Worried by the large number of industries blighted by low pay, widespread job insecurity and low productivity, Morrissey, 52, backs the thrust of the commission’s report, which argues for a more interventionist state with greater levels of devolution to boost investment and productivity.
“I don’t think you’ll find many in business, or the City for that matter, who think the economy is perfect,” she says. “Like me, they think we need a more responsible and fairer form of capitalism.
“It is clear the world has changed in the last 40 years and we need to be less command and control. We need to increase the levels of investment. We need to address the needs of people who have been left behind. But these are not problems we put just at government’s door, or just business. It is something we need to solve together.”
Morrissey’s job at L&G is to increase the value of her clients’ shareholdings. So it might seem surprising that the report is critical of short-termism in the City and the demands of investors for higher dividend payments each year. The report points out that in 2016 shareholders received 55% of company profits, much higher than the 39% they were paid in 1990.
“There is a growing realisation in the City that short-termism is not generating the sustainable returns shareholders want.”
She adds there could be an appetite for sacrificing higher dividend payments if the funds are invested for longer term, sustainable returns.
“We want to have long-term streams of dividends and not just a short-term boost from a share buyback,” she says, adding that she hoped the report would be debated more calmly than the pros and cons of Brexit. Morrissey, a supporter of Brexit, says: “It’s been difficult having a more nuanced debate about leaving the European Union. Hopefully people won’t pick holes in particular policy ideas, but address the themes in the report.”