Limit pay gap between bosses and workers

I NOTE that Clare Chapman, a director of the Weir Group, was careful in her choice of time period when defending levels of UK company top pay (“Weir boss defends UK executive pay levels”, Herald Business, June 7). She claims they have not “outstripped employee pay” over “the past five years”. However, over 20 years the differential between those at the top of companies and their workers has increased substantially.

Before the banking casino era of the 1990s, top bankers were paid around 20 times what the lowest got. Today, according to the High Pay Centre, top bosses get 129 times more than employees. FTSE-100 top people get £5.4m, 401 times that of a minimum wage worker, 172 times a nurse, and 147 times a teacher. Sir Terry Leahy was paid 900 times more than the average worker in Tesco.

What those at the top of PLCS seem blind to is that their ability to widen inequality is based, indeed anchored, in public policy.

Their limited liability status is a valuable gift of public law enabling them to operate at a different level from a purely private company, for example, in seeking capital, and the clear division between the company as a legal body and shareholders in the matter of accruing and being responsible for debt.

Capital today is not the capital of the 19th century that saw the introduction of limited liability. Shareholders today are more likely to be insurance companies, pension funds, investment funds handling many thousands of client’s cash; making it difficult for shareholders, and certainly those whose money they handle, to have any effective say on how much top people get in remuneration. There is the added problem that some of those who are shareholders in that second-hand capacity, themselves are anxious not to drain the gravy train.

If a protected position is abused, and the public good injured by creating gross inequality, with an increase in zero hours contracts, low levels of minimum and living wages, and one in four of our children living in poverty, then it is time for that policy to be reviewed, and amended.

I would not suggest removing its protection of risk, but I would argue that such protection should be subject to limitation on the gap between top pay and that paid to workers: a differential of, say, 20-25 between top and bottom. That wouldn’t beggar the top, but it would certainly give them an incentive to raise the workers’ share of company profits.

Jim Sillars,

97 Grange Loan,

Edinburgh.

THERE are direct parallels to be drawn between Government involvement in the rescue of the RBS and the abolition of slavery in 1833. Most of us are vaguely aware the benevolent UK Government of the day through the Slavery Abolition Act freed 800,000 slaves in selected parts of the British Empire, but less well-known is that passing the act was conditional on the slave-owners being financially compensated for this loss of assets. What even fewer know is that because of the magnitude of the sum involved the government of the day was compelled to borrow money from the financial sector to finance the emancipation of the slaves and that the British taxpayer serviced the debt for 182 years before finally paying it off in 2015. It is ironic that Government borrowed the money from the same section of society they were reimbursing.

For decades the contemporary UK Government has run a deficit and has been forced to borrow money from the financial sector to balance the annual budget yet nobody asks where it suddenly found £46 billion to buy its 75 per cent share in the collapsing RBS. Nobody questions the source of the money, nor how long the taxpayer will be paying interest on it, never mind repaying the capital sum. Logic would suggest the funds could only come from some part of the same corrupt venal financial cartel that was the creator of its own misfortune that necessitated government intervention in the first place.

One can only speculate how many decades the taxpayer will suffer austerity and a diminution of public services simply to repay this one loan. Just as in the case of the 1833 Act, how many generations will suffer deprivation simply because of decisions taken by our Government to protect the financial assets of the Establishment?

David J Crawford,

85 Whittingehame Court,

1300 Great Western Road,

Glasgow.

THE reason why the banks are closing branches has nothing to do with reduced footfall. It is because they have run out of dodgy products for their salespersons (staff) to flog to branch customers.

Graham Taylor,

Woodside Place,

Glasgow.