I agree that it is wrong for the gap between executive pay and median earnings to continue to rise and I know that many people in Ipswich are concerned about it.
I am not sure I believe the figures from Deloitte quoted in the Times article which purport to show that median executive pay for FTSE 100 Chief Executives has dropped from £4.3 million in 2015 to £3.5 million in 2016 – I believe it is possible that FTSE 100 Boards have just found more clever ways of hiding the pay packages they hand out. But even if we accept the Deloitte figures, executive pay increased enormously over the last 20 years: in 1998, for example, the average FTSE 100 CEO received £1 million, while the ratio of FTSE 100 CEO pay to the average pay of a full-time UK worker was 47:1, compared to 128:1 in 2015.
I believe it is shocking that it would take a typical full-time worker around 130 years to earn the annual pay package of the average FTSE 100 chief executive. It cannot be right that in recent years’ wages at the top have continued to rise, while those of everyone else have stagnated.
Clearly the Government’s published plans fall well short of the Prime Minister’s previous promises to make executive pay packages subject to strict annual shareholder votes, put worker representatives on company boards and make businesses publish pay ratios. It has abandoned the proposal for binding annual shareholder votes. Employee representation on company boards has been ditched in favour of a patronising “duty of care” role for one of the existing directors. The superficial changes now proposed by the Government will do nothing to tackle extreme executive pay.
I was pleased and proud to join with my Labour colleagues in voting for our amendment to the Queens Speech which would have ditched the pay cap on public sector workers. I believe we need to challenge the government on the obscene pay packages “earned” by private sector executives, and will work with colleagues to raise as much support as possible for our position on this. But I am afraid there is no avenue I could use to speak to Theresa May directly in the next few days.
At the June 2017 General Election I stood on a manifesto that committed to tackling pay inequality by introducing an excessive pay levy on companies with staff on very high pay. The manifesto also pledged to bring in a maximum pay ratio of 20:1 for the public sector and for companies bidding for public contracts. I can therefore assure you that I will continue to press for real action to ensure fairness in pay and an economy that works for all.