Sir Philip Hampton, chairman of RBS, really let the cat out of the bag last week. He told a conference that he had had an ‘out of body experience’ when recently he was importuned by bankers with £4 million pay packages complaining that it was ‘very, very unfair’ because another bank was paying £6 million. So who decides these things? Private and secret remuneration committees usually selected by the chief executive in order to do the honours by him on the understanding that he will reciprocate for them when the time comes.
And in case there should be any backsliding by remuneration committee members, they have just been awarded a 14% pay rise. On what conceivable grounds? Because setting top pay has become harder through new requirements for transparency! It must be tough having such a difficult job.
What the bankers show is that under neoliberal capitalism there is never any limit for the highest-paid which is enough. The desire to inflate self-esteem through higher pay than others is literally boundless. And under the particular neoliberal conditions imposed by Osborne, inequality will continue to rise relentlessly because austerity squeezes wages and redistributes income to asset-holders.
We have now reached the position where average wages (£460 a week) have fallen in real terms by 9% since 2008 to £420 while the top 1% after a 14% pay and remuneration rise in this last year alone now take home on average £3.32 millions (£63,846 per week), or 152 times the worker on average pay. How should we deal with this, since it has nothing to do with merit or genuine market evaluation? There are really only three ways.
One, which is Labour’s idea, is by restoring the tax on bankers’ bonuses. That is helpful, but is far too limited, and would only apply to bankers.
A second is by including workers on remuneration committees, not a token one or two, but at least a third and preferably half the membership – though a better version would be by an annual meeting of an enterprise council in all large companies at which representatives of all the main grades of employees, from cleaners to the boardroom, bid for a pay increase for their own grade and had to justify it in front of the whole meeting.
A third mechanism to push down inequality within a defensible range is to establish an initial then maximum ratio between top pay and the average in that organisation, allow a period of (say) 3 years to achieve it, and then gradually reduce it to whatever the final broadly acceptable ratio might be. Thus the initial ratio might be 20:1 and the final ratio perhaps 12:1 (as it was 40 years ago in the UK). Since the current government would never conceivably countenance any such idea, it would have to be implemented via a referendum, the results of which would be mandatory for the government.
Well of course on can say the same thing about politician who will I suspect accept the 10% pay package on the table because well they are struggling to live.
We all know that labour saw nothing wrong with arguing over fire fighters pay packages and today my local fire fighters are volunteers, better to get them free then pay a decent wage.
What did our Dearly beloved and not forgotten pair of ears do, give MP’s a 60% pay rise do not remember to many moaning about that.
Miliband the Savior of the left gets rid of Byrne because he was getting pretty poor at slamming down and Miliband goes for a banker to look after welfare who will hammer down.
Bankers and politicians what a set up.
What about changing, bankers for five years then five years as a politician, and I’m not having a go at Michael who is to the left, but the principle that the difference between politicians on the whole and bankers are politicians wish they were bankers.