JEREMY CORBYN called yesterday for a cap on executive salaries in the public sector and government-contracted firms to narrow Britain’s huge pay gap.
The Labour leader’s proposal, for which a figure has yet to be announced, aims to counter growing levels of income inequality and to stop Britain turning into a “bargain-basement economy.”
It would also save cash strapped councils and departments money by reducing the disparity between lower salaries and extremely high executive pay, he said.
When asked whether Theresa May would support the idea, the Prime Minister’s official spokeswoman claimed that the government is “working to deliver an economy that works for everyone” but ruled out capping pay.
However, her predecessor David Cameron advocated a public-sector pay ratio of 20:1 and for salaries higher than £150,000 to be signed off by the Cabinet Office, Mr Corbyn pointed out in a speech in Peterborough later in the day.
Labour would go further by extending the cap to firms awarded government contracts, he added. Mr Corbyn continued: “It cannot be right that if companies are getting public money that that can be creamed off by a few at the top.
“But there is a wider point too. Twenty years ago, the top bosses of FTSE 100 companies earned just under 50 times that of their average worker — today that figure is now 130 times.”
His proposal also includes a government-backed kitemark for companies that have agreed pay ratios with a trade union, so that customers can judge for themselves.
Executive pay could also be signed off by reformed remuneration committees, on which workers would have a majority, and a higher income tax rate on the top 1-5 per cent of incomes could be set.
In addition, lower corporation tax rates could be offered to companies with lower pay ratios, Mr Corbyn said. “This is not about limiting aspiration or penalising success,” the Labour leader stressed, “it’s about recognising that success is a collective effort and rewards must be shared.”
Stefan Stern, director of think tank the High Pay Centre, told the Star that tackling extremely unfair pay ratios should be done by making firms publish the figure, making them justify the gap and putting employee representatives on renumeration committees to agree pay levels.
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