Charlie Parker: Cameron wants fund managers to curb pay. Seriously?

The response by David Cameron to Ed Milliband's challenge on executives' pay reveals the extent to which the centre-right is boxed into a corner on the subject of wealth.

For wealth managers it highlights the context for the political debate that will rage in the coming years. It will be one where wealth is attacked and the tolerance of the population for tax avoidance will diminish significantly.

Cameron used an appearance on Andrew Marr's Sunday show to hit back at Ed Milliband's claim that Labour would lead the charge on executive pay.

He proposed new 'shareholder power' to tackle excessive remuneration. The centre piece is a promise to make remuneration votes binding on company management.

It is a plan with a number of practical problems. Not least the fact that it is unlikely to make any meaningful difference.

Current rules (introduced by Labour) allow shareholders a vote on remuneration together with greater transparency. The results of the remuneration votes are published and I can not recall an incident when a majority of shareholders have voted against remuneration and a company has pressed on with it regardless. Such actions would irrevocable damage relations with a shareholder base. So making those resolution's binding could well prove a pointless innovation.

Secondly though and more profoundly I am left asking this question. Just on what planet is David Cameron if he believes that Britain's fund managers are the right people to curb excessive pay?

Now I have no real beef with the amount fund managers earn, being much more concerned with the shape of their remuneration and the affect it has on manipulating behaviour than the overall amount.

However, if we are going to find a group of people best placed to cut down pay deals we would have more luck with a pack of Premiership footballers than Britain's fund managers.

The issue though highlights a significant problem. Shareholder action is about the last line of defence that coventional capitalism has against the current wave of public anger at income inequality.