Time has come for legislation on wage ratio

BRIAN McKenna (Letters, July 5) claims that there are only two ways to “free up wealth for everyone”: a maximum wage law or taxation rising to 90 per cent.

There is a third way: wage ratio legislation (WRL). By ensuring that the top rate of pay in an organisation must be no more than a fixed multiple of the bottom rate of pay in the same organisation

(for example, 15 times), WRL gives those at directorial and managerial levels a direct personal interest in maintaining the rate of pay at the bottom.

Unlike minimum pay legislation, WRL doesn’t require management to find new money and so rarely leads to lay-offs and it doesn’t have to be regularly recalculated because of inflation.

Unlike high tax or maximum pay legislation it doesn’t discourage enterprise or punish success – as long as the fruits of success are shared amongst all those who contributed to it.

The independent adviser on poverty to the Scottish Government, Dr Naomi Eisenstadt, recommended WRL in her recent report. Abroad, it’s already the official policy of the main opposition party in Spain.

Of course, within the private sector inequality is much worse. January 5, 2016, was dubbed

“Fat Cat Tuesday” by the Tory government’s own Hutton Commission because by lunchtime on that second day back at work the CEOs of the top FSTE 100 companies had already earned the average UK annual salary (which is £28,000).

To legislate for WRL here more powers would have to be devolved to the Scottish Government. However, the Scottish Government could already bring in WRL for those public sector organisations under its control.

Wage Ratio Legislation is an idea whose time has come.

Mary McCabe, 25 Circus Drive, Glasgow.

JOHN McDonnell is perturbed that the Government is disposing of RBS assets below market value and that they could have raised an extra

£15 billion (“Labour attack over RBS sale”, The Herald, July 7).

Just imagine the bung they could have given the Democratic

Unionist Party with that.

It could have financed a one per cent rise for all public sector workers for 10 years as we know that all public servants find their real wages reducing. I say all public servants but there are exceptions such as MPs, who make sure that the proposals of their “independent” review body are always implemented. They obviously don’t think they are servants, well certainly not of the public.

Mr McDonnell skilfully avoids the elephant in the room, which is of course that if it is proper and legitimate for the RBS to function as it currently does with 73 per cent of its shares owned by the public why is there an imperative to return it to the private sector at great loss to the public purse?

RBS already runs with minimal governmental interference other than when there are bills to be paid. What dramatic change in the management and profitability of the RBS will happen on the day it returns to the private sector? What will be the difference other than future profits being paid to private shareholders rather than being used to repay its public debt?

The answer is none whatsoever and that fact alone demonstrates that the whole system, including government, is loaded in favour of the elite.

When our millionaire former prime minister can travel halfway round the world to deliver a speech, the likes of for which he normally apparently charges a fee of

£120,000 per hour, on the benefits of a public sector wage-freeze even the most gullible of voters must see they are being played for mugs.

By the way, I have come into possession of a large quantity of magic beans that I am keen to dispose of in exchange for cows if any Brexiters are interested.

David J Crawford, Flat 3/3,

131 Shuna Street, Glasgow.