£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, “”Someone happily accepting a pay package of £10.5m doesn’t really have the moral authority to tell nurses and teachers and local government workers they shouldn’t get a pay rise. It would be a lot easier to fund decent wages for public sector workers if the wealth of multi millionaire was taxed more effectively so if the Barclays CEO is concerned about the sustainability of public finances, he would look a lot less crass and hypocritical if he used his position to argue for a wealth tax on the super rich instead.” Luke’s comments were covered in the Guardian and the Mirror.
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.