Pay for directors of the UK’s top companies has risen by 49% according to a report complied by Incomes Data Services (IDS). The average pay package for a director of a FTSE 100 company now stands at £2.7 million, this takes into account salary, benefits and bonuses and the rise is higher than that given to the chief executives of the same companies. They, the poor dears, have had to struggle along on just 43% more pay than they received last year; how have they coped eh?
Pay for most employees has risen by 2.6% over the same period and many workers have seen their pay cut or remain static. Consumer price inflation is currently running at 5.2%; for most families balancing their budget has become a circus act performed on a high wire without a safety net.
David Cameron, who has been in Australia all week attending the Commonwealth heads of government jolly in Perth, said the findings of the report were ‘concerning’ and called for greater transparency when it comes to setting pay levels for senior managers. Labour leader Ed Milliband said the levels of pay awarded to directors were evidence of the ‘something for nothing culture’ that had infected business.
Trades union leaders took a more robust line, Len McCluskey of UNITE said the government should ‘consider strongly giving shareholders greater powers to question and curb these excessive packages.’ TUC leader Brendan Barber accused directors of using ‘tough business conditions to impose real wage cuts, which have hit people’s living standards and the wider economy, but have shown no such restraint with their own pay.’
If you were in need of evidence that we have passed through the looking glass into Wonderland the IDS report provides chapter and verse. On a weekly basis we are lectured by ‘business leaders’ of one stripe or another about the need for pay restraint and the importance of imposing brutal austerity measures on public spending as they vote themselves massive pay rises and cry for huge bonuses on top.
The reason for this, we are told with finger wagging imperiousness is that they are ‘wealth creators’, sorry; run that one by me again. The economy has stalled, unemployment is soaring and productivity figures are at an all time low; just what are this shower doing to create wealth? At best they seem to be shifting what little wealth there is into their own pockets.
About all of this the best David Cameron can find to say is that he is ‘concerned’, granted I don’t expect our PM and his Downton cabinet to string a ‘Capitalism is Crisis’ banner on the gates of Downing Street before leading a march on the stock exchange; but a somewhat more robust response does seem in order. Out in the real world people have moved beyond being ‘concerned’ to being alternately terrified and furious.
When Ed Milliband spoke about ‘predator’ and ‘producer’ forms of capitalism in his party conference speech he was accused, shamefully by some members of his own shadow cabinet, of not fully understanding economic realities. Now it looks like he might just have had a point, if not quite enough in the way of nerve when it comes to matching words to policies.
Even the union leaders, although they have proved the continued relevance of their movement, haven’t quite got the message yet. It isn’t enough just to point out that the casino capitalism of the past thirty years has failed, doing little to create wealth and even less to distribute it fairly, we need to have a genuine and for all parties often troubling debate about the sort of country we want the UK to be.
Do we want growth at all costs? Are we happy to see social mobility continue to decline for the sake of paying a little less tax? In short do we really want to all be in it together or just out for ourselves?
I don’t pretend to know the answers to any of the questions listed above or the dozens of others that could take their place; but, like most people outside the charmed world of the Westminster bubble I can’t see how we can deal effectively with the problems Britain faces if we don’t start asking them soon.