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Page last updated at 08:07 GMT, Monday, 19 September 2011 09:07 UK

Cable: Curb 'reward for failure'

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The Business Secretary Vince Cable has said it is wrong that people were receiving "lavish rewards" when share prices and basic pay were not increasing at all.

Mr Cable told Today presenter Justin Webb that he wants to "reward success in business" but does not necessarily want to see executive pay go down. Instead, he would like to discuss with business leaders the option of giving shareholders a binding vote on executive pay.

"There is now a recognition in the way there wasn't before that the system isn't working, that we are having very bad problems of reward for failure," he said.

"We've seen it in the banking system. But more generally there is an issue and they want to sort it out and I want to sort it out with them."

And he also said that he did not accept an estimate in a Financial Times report that a new £12bn "black hole" had opened in the government's finances, which threatened to derail the coalition's deficit reduction strategy and prolong austerity measures.

He told the programme: "I don't actually recognize those numbers. We do need to look at them very carefully.

"There is actually quite a lot of flexibility built in to our existing fiscal plans and I think it is very difficult to envisage circumstances in which the government would want to deflate the economy or take demand out of the economy. I can't make a commitment until we've actually seen the numbers and seen what they imply."


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