Brendan Barber, General Secretary of the TUC, has today released a statement calling for a national debate about the level of Chief Executives’ pay – read the full statement here, and a news summary from The Scotsman here. (Worth noting that top public sector workers in the UK seem to be in on this too…) In response, Digby Jones, the outspoken former head of the CBI was having a rant about Barber’s comments this morning on Radio 5, saying that Chief Execs deserve massive pay rises as they are the ones taking the risks, generating the jobs etc. and – importantly, he claimed – businesses would take their investment to the USA, China, France, South Africa or elsewhere otherwise.
Now, let’s get a grip on this. I cannot find any figures to prove it presently (no EU comparison of executive pay exists as far as I can find out), but I am 99% certain that there would be far less difference between executive pay and normal employees’ pay in France than there is in the UK. It’s a general argument that forms the tenet of Will Hutton’s The World We’re In [Amazon] when he looks at business incentives. Further, if you look at the World Economic Forum list of Europe’s most competitive countries – see this news story from the BBC – the more equal Nordic countries come top of the table.
Hence if the TUC wants to really give a convincing argument to back up its calls for a debate about executive pay, I really think it should look to other European countries for examples – working with the ETUC perhaps. If pay is more equal, and economies are more competitive elsewhere, that will give extra weight to Barber’s arguments.
Photo (c) TUC