A government which has lost its purpose
High Pay Centre response to the Queen’s Speech – 21 June 2017
Theresa giveth, and Theresa taketh away. Less than a year ago, the prime minister spoke of the “irrational, unhealthy and growing gap” between pay at the top of business and for those lower down the corporate hierarchy. A Green Paper was produced and consulted on last autumn. And then the Conservative party manifesto made a commitment to require larger companies to publish the pay ratio between the top and the average worker in the business. Shareholders would be required to cast binding votes on corporate governance and performance more frequently. This looked like progress.
But today’s Queen’s speech makes no mention of these urgent and necessary reforms. They have vanished along with the government’s majority.
The day after the Serious Fraud Office reminded us that corporate culture and executive behaviour still needs serious scrutiny and reform, the government has fled the battlefield. Politics is clearly a particularly messy business at the moment, but this is all extremely disappointing.
While there was a mention for continued work on the gender pay gap and a rise in the minimum wage – so that employees might “benefit from the same improvements in earnings as higher paid workers”, to quote the speech – there is no sign that the manifesto commitments on top pay and governance reform will be honoured.
Public disquiet about inequality and excessive pay at the top has been ignored again. The challenge has been ducked. The sorry saga of inadequate governance reform continues. This looks like yet another, extraordinary U turn from a government which has lost its purpose and lost its way.
Since 1 January 2018 the average FTSE 100 CEO has earned:
Income inequality in the UK
Wealth inequality in the UK
- Are Chief Executives overpaid? Blog by HPC founder Deborah Hargreaves
Author of new book on top pay calls for a new corporate ethos - contact HPC to attend the launch on 11 October
- HPC at party conferences
Come to our events at Labour and Conservative Party conferences
- HPC response to consultation on the Wates Principles for the governance of privately-owned companies
Large private companies should be subject to the same high standards of stakeholder engagement as publicly-listed counterparts