£10.5m pay packet exposes double standards amid pre-budget debate over the state of UK’s public finances
Barclays chief executive CS Venkatakrishnan has intervened in the debate ahead of the November budget, urging the government to limit public sector pay rises as a way to control inflation and ease pressures on public finances. He told the Financial Times: “We need to curb public sector wage growth to keep inflation under control.” His comments come after his own pay package rose to £10.5 million last year, far outstripping the earnings of most public service workers.
The High Pay Centre responded with our Executive Director Luke Hildyard saying, “It’s difficult to take lectures on wage restraint from someone who earns more in a single day than many public service workers make in a year. Nurses, teachers and carers have already endured years of pay freezes or below-inflation increases, while executive pay and profits in the financial sector keep soaring. If fairness is the goal, those with the broadest shoulders should contribute more, not those keeping public services running.”
Venkatakrishnan’s intervention comes as the UK prepares for the November budget, where Chancellor Rachel Reeves is expected to raise taxes in order to tackle a shortfall in the public finances. The Trades Union Congress (TUC), the Green Party, and Labour Mayor Andy Burnham, are calling for a wealth tax. In contrast, the Resolution Foundation has recommended raising broad-based taxes, including reforms to capital gains and inheritance taxes, while stopping short of a wealth tax, and the Institute for Fiscal Studies (IFS) similarly focuses on reforming capital income taxes rather than introducing a new wealth tax.
At the High Pay Centre we believe a wealth tax would be a positive measure to start to address the extreme wealth inequality that is only continuing to grow. The less radical measures around reforming inheritance and capital gains taxes could also play a positive role in this regard. In addition, we believe that the conversation on taxing the rich should go beyond wealth and also include proposals for higher taxes on the highest earners. Such choices should be prioritised over increasing taxes which affect those on low and middle incomes who have born the brunt of decades of wage stagnation and more recently the cost of living crisis.