Symbolism versus substance

Deborah Hargreaves rightly highlights the overly extractive nature of much of our economy, and the disconnect between rewards for bosses, the rights of workers and the wider state of UK society (“Are they worth it?”, November).

Successive governments, and most economists, agree that boosting the UK’s weak productivity performance is vital to improving living standards. But those improvements could easily fail to impact the lives of workers or the wider population unless we also take action to ensure the proceeds are shared fairly.

However, I worry about the focus on CEO pay and mandatory ratios between pay at the top and the bottom. The question for me is which levers are most likely to lead to tangible changes in the lives of those stuck at the bottom of our labour market. Limiting CEO pay might be emotionally satisfying. For many people excessive pay packets are a potent and enraging symbol of the unfairness baked into the design of our economy. But, on its own, would it actually change anything? Did the ban on bankers’ bonuses mean they were paid less? Most analysts agree that companies simply found other ways to reward their best performers. Would mandatory CEO pay ratios significantly alter the behaviour and incentives of executives? I’m sceptical.

Of course, Hargreaves and the High Pay Centre don’t advocate for that as a single policy, but as part of a wider package of economic reforms. My worry, though, is that the issue of CEO pay is so emotive that it would be easy for this kind of measure to become the focus of campaigning and policy pressure. That could drain time, energy and political capital away from measures that might feel less cathartic but could result in far greater changes to the position of workers.

For instance, the long-promised but ever-receding Employment Bill would have brought in measures to boost workers’ rights and job security, alongside tougher enforcement of existing employment legislation. More technical and less alluring from a campaigning standpoint, certainly—but perhaps more likely to lead to real change.

Helen Barnard, Joseph Rowntree Foundation

What personal endeavour—by for example the CEO of a water company—can possibly justify their eye-wateringly high salary? Did they invent water? In addition, how do they justify such a high salary when the delivery by their companies is abysmal? Hargreaves’s article is right to point out that the rot set in with Blair and there is no possibility that another Labour government under Starmer would do anything different, lest they be accused of communism. Mary Robinson, via the website