I have no excuse for not blogging the last couple of days, other than that I have been taking long walks over the beach and cliffs with my family. I feel wonderful for it.
There has been much well deserved publicity for the report of the Low Pay Commission, which stated that we are fast returning to Victorian levels of inequality as the gap between rich and poor grows wider at an extraordinary pace. The reaction of talking heads all over the broadcast media has been that it must be for shareholders to set executive remuneration.
Plainly this does not work. Thomas Cook is going under, and it paid its chief executive, who resigned last year, £7 million in four years.
JJB Sports is also going under. It has huge debts, but these are less than its founder, the appalling Dave Whelan, took out of the company himself. Whelan characterised a brief strike against terrible labour conditions at the company’s depot as “communism”. He is a big donor to the Tory party. He is chairman of Wigan Athletic, and his view on racial abuse on the pitch is that “black players have just got to get on with it”.
I am not a fan of Polly Toynbee. She supported Blair tirelessly, appearing not to notice that it was in fact the Blair years, not the Thatcher years, that saw the huge acceleration in the gap between rich and poor. She continued to support New Labour war criminals on the grounds that a tiny improvement in the conditions of poor children in the UK was more important than the lives of hundreds of thousands of children killed or mutilated abroad in Blair’s Wars – a view tantamount, in my view, to racism.
But the blinkered old bat got something right when she scathingly dismissed the notion that it was shareholders who should control excessive wages. The shareholders of major corporations, she said, are often many thousands of miles away, and are fund managers who hold and dump shares fleetingly as short term speculation. They have no more say in running the company than a punter who bets on a racehorse has in running the stable. An excellent analogy.
Governmental regulation is needed to stop ridiculous inequality. Transparency is important, as the government seems prepared to admit, but will not solve the problem. Nor will employee representation on remuneration committees. These employees will be senior “trusties”, and if not, will be subject to all the threat implicit in the government drive – the most energetically pursued of all government policies – to end employees’ rights and protection from unfair dismissal. That loss of employee rights will undoubtedly increase the wealth gap. If you make it easier to sack people, it is a lie that companies will hire more people. They will sack more people.
I maintain that the law should state that net total reward for the highest earner in a company or organisation should not be more than four times the rate of reward per hour for the lowest paid employee. So if a cleaner gets £320 per week for a 40 hour week, the boss should be able to get up to £2240 per week if he works a 70 hour week.
This would have one very good effect – you would in short time find the cleaners getting paid a lot more so the boss can get more. It would need to be plain that agency or sub-contractors working within the company count – so Goldman Sachs can’t just get someone else to clean their toilets. The idea would work particularly well in the public sector, where a whole new raft of super-rich public employees were deliberately created by New Labour.