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pay

At Barrowford Labour Party’s January meeting, Mark Porter, a local trade union and party activist, led a robust discussion on the current Banker’s Pay dispute.
He said that, while difficult economic times meant uncertainty for millions of people, there was one constant that could be relied upon: the Banker’s Bonus. The meeting noted that despite the Tory manifesto promises to curb executive excesses, the latest round of banker’s bonuses just kept coming. Last week’s announcement that the chief executive of the bailed out bank RBS was due to receive a massive bonus on top of a salary of £1.2 million annual salary beggared belief.
The meeting was told that David Cameron had said he didn’t think it was right that employees should have a seat on company remuneration committees, but he did think it appropriate that shareholders be given rights to block such payments agreed by those committees. The government, which is the major shareholder in RBS and which should be demonstrating its serious intent to to tackle endemic executive high-pay, should therefore be blocking such enormous bonuses.
But the government did absolutely nothing. The chairman of RBS quickly announced that he would not take up all of his option of a £1.4 million bonus. But  it was not until several days later amid mounting pressure, most notably a motion tabled by the Labour opposition, as well as growing anger from the public that the CEO, Mr Hester, finally announced that he would not take up the bonus.
The meeting felt that if the government is unwilling to instigate regulatory reforms, despite widespread acceptance that they are needed to ensure the country’s financial stability, then surely they have lost the right to govern us!

 

I have just read Gordon Prentice’s blog - The trouble with Billionaires.

Gordon lays out the extent to which the ratio of pay between the highest and lowest is out of control. According to Gordon, the High Pay Commission tells us “top pay has spiralled alarmingly to stratospheric levels in some of our biggest companies”.

Bankers and company directors are currently in the spotlight and quite rightly so, but what about the excessive salaries paid to football players, film and TV personalities? It is not just the bankers and company directors who are doing very nicely.

Coincidentally the latest TUC Touchstone Extra pamphlet “All In this Together?” looks at how the recession and ongoing economic weakness has had an impact on different parts of the workforce. According to the report “the falling proportion of national output that goes on wages has meant that UK workers today are taking home £60bn a year less (in today's money) than workers did 30 years ago”.

Therefore it doesn’t take a rocket scientist to work out that the yawning pay gap has arisen from the combination of increases at the top and decreases at the bottom. The theory of the market being that to maximise performance you pay the wealthy more and the poor less!

Pay is only part of the picture; the accrued national wealth is in the hands of a tiny majority. Should we dare to put this under the microscope, we are accused of “The Politics of Envy”. We should be vigorous in redefining this as the “Politics of Fairness”.

The Coalition Government is compounding this problem with their attacks on the benefit and welfare system. I guess that not many of us support benefit cheats and it is right that they are dealt with properly, but most of would want to retain the existing benefits that we have paid our taxes for in case we or our families need assistance.

Whilst other colleagues within the Labour Party seek a new utopia of “Responsible Capitalism” and pay restraint for the public sector, my view is that current thinking falls a long way short of achieving the “Dynamic Economy” set out in Clause Four of the Constitutional Rules of the Labour Party.

Of course we need growth, but it needs to be sustainable and we must plan which areas of the economy need to grow to deliver higher pay for the workers, and also consider who else should benefit from the proceeds of that growth.

Fairness means redistributing wealth through a just taxation system rather than the one that is currently tipped in favour of the rich.

We need that revenue to invest in our children’s education and training. We need it to invest in everyone’s future. We need it to get the country back to work.

 
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