Coalition calls for an end to 'excessive' pay

Monday 17th August 2009

A coalition has called for a High Pay Commission to be set up to prevent senior executives being excessively remunerated.

Left-wing pressure group Compass has persuaded 100 prominent politicians, journalists and academics to sign up to its demand that the government set up a body to look at Britain's biggest pay packets.

Liberal Democrat Treasury spokesman Vince Cable has placed his credentials on the left of his party again by signing up to the statement.

It warns that "the unjust rewards of a few 'masters of the universe'" was responsible for the banking crisis which led to the present recession.

Other prominent signatories from the political world include Trades Union Congress general secretary Brendan Barber, Green party leader Caroline Lucas and left-wing figurehead Jon Cruddas.

The statement reads: "Remuneration and performance pay cycles are too short; rewards for failure are too great, to the detriment of the long term future of these companies and the wider economy.

"The government must now take decisive action on excessive pay at the top when it has had such a damaging and corrosive effect on the real economy and wider society."

It wants a High Pay Commission to mirror the work done by the Low Pay Commission in 1997, which led to the introduction of a minimum wage.

Its proposed high-pay successor would consider options like maximum wage ratios and bonus taxation as the best ways of providing a "just society and sustainable economy".

Of the 100 signatures, many are from Labour backbenchers associated with the party's left-wing.

But it also features Lib Dem MPs, six university professors and journalists like Kevin Maguire and Polly Toynbee.

Some have backed the group more vigorously than others.

Mr Barber talked of "a new class of super-rich that floats free from society" and which the government can no longer afford to ignore.

Mr Cable's language was more nuanced. "There is no justification for massive pay and bonus awards in financial institutions, the most important of which are guaranteed or owned or have been rescued by the taxpayer," he said.

"Transparency and tax are important but a High Pay Commission looking at both equity and economic aspects is a welcome suggestion too."

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