Shadow cabinet member stumbles over pay ratio plan
ASHADOW cabinet member has struggled to explain how Labour would enforce its plans to introduce a maximum pay ratio for the public sector and companies bidding for Government contracts.
The party has committed to ensuring bosses in the public sector and private companies that carry out government work are not paid more than 20 times the wage of the firm’s lowest paid employee.
It forms part of a 20-point plan to end the “rigged economy” in the workplace, including new employment rights and an end to the public sector pay cap.
But Labour elections co-ordinator Ian Lavery found it difficult to explain what would happen if a defence contractor like BAE Systems bids to build more Joint Strike Fighter jets for the RAF, and the boss was paid more than 20 times the lowest-paid worker.
That scenario was put to him by presenter Andrew Neil on BBC One’s Sunday Politics.
Mr Lavery said: “I understand the point you raise but we’ve got an obscene situation in this country which everybody recognises, whereby the bosses at the very top make an absolute fortune.”
Asked what would happen and who would build the jets, Mr Lavery went on: “The difference in wages between the top earners in this country and the people who are in the factories, in the workshops, whatever...”
Pushed again by Mr Neil on what the consequences would be if the ratio is not met, and who would win the contract to build the jet, he said: “We are making this very clear that we are going to introduce a wage ratio of 1:20.”
Asked again who would build the jet, Mr Lavery said: “We want to close that gap between the people at the very top and the people who produce the goods in the workplace.”
Pressed further on who would build the jet, the MP said: “We would look at the issue as it came along but the policy is quite clear.”
Asked to name a defence contractor which has a boss with a salary that would fit with the ratio, Mr Lavery said: “We would introduce and we are introducing, we’ve rolled that out as part of this fantastic policy to transform society, to get rid of discrimination, to try and bring together our communities, and we will introduce a pay ratio of 1:20.”
The 20-point plan includes giving all workers equal rights from day one, whether part-time or full-time, temporary or permanent; civil enforcement of gender pay auditing; strengthening protections for women against unfair redundancy; protections against third party harassment; banning zero-hours contracts; ensuring any employer recruiting labour from abroad does not undercut workers at home; and repealing the Trade Union Act.
Shadow chancellor John McDonnell has said the proposals will form the “cornerstone” of Labour’s plans to end the “rigged economy”.
And he insisted the party would fully cost, and explain how it would pay for, proposals that involve extra spending, such as lifting the public sector pay cap, in its manifesto.
“We’ll have every policy fully costed and beside that costing will be the funding source,” Mr McDonnell told ITV’s Peston on Sunday.
TUC general secretary Frances O’Grady said: “This is an impressive set of commitments from the Labour party, many of which have long been advocated by the TUC.
“Making these ideas a reality would make a real difference for millions of hard-working Brits”
Tony Kearns, acting general secretary of the Communication Workers Union, said: “The guarantees given, particularly for young workers, once again show that Labour understands the needs of real people and are prepared to take bold and decisive action that will help lift millions of people out of pay rates that depress living standards.”