Tories ‘want to lower wage caps for city bosses, but ALSO limit pay for public workers’
The government has been accused of “hypocrisy” as leaked plans show it plans to lift some controls over city bosses’ pay in order to curb people’s wages in the public sector
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The government has been blown up over a plan to lift control of city bosses’ salaries, while saying public sector wages must be kept in check due to rising inflation.
The Cabinet Office minister is said to have written to the Chancellor calling for “deregulation measures to reduce the overall burden on business” in a bid to attract more businesses to the UK post-Brexit.
This would involve lifting restrictions on directors’ and non-executive directors’ remuneration, according to a leaked copy of the letter seen by The i newspaper.
“I trust you will agree that this is a more proportionate regulatory response and reflects the new regulatory approach outlined in the January publication ‘Benefits of Brexit’,” it said.
The newspaper reported that Steve Barclay has asked Business Minister Kwasi Kwarteng to outline further measures to ease the burden on companies, citing the need to change pay cuts for bosses.
The Department for Business, Energy and Industrial Strategy (BEIS) confirmed that it is examining “whether there are unnecessary restrictions on the payment of non-executive directors in shares which could ensure that they are fully involved in the success of the company they lead are invested”.
It added, “When the company is doing well, the directors are doing well.”
At the same time, the prime minister and chancellor have argued that discipline and restraint in public sector pay is now important to manage downward inflationary pressures.
“We have a responsibility to fight inflation and prevent it from taking hold,” said No 10 Downing Street.
“To do that, we need to ensure that wage settlements are reasonable and do not adjust for inflation, and consequently push up prices as the cost of goods and services increases to accommodate wage increases.”
Speaking ahead of a cabinet meeting on Tuesday, the Prime Minister said: “It is right that we reward our hard-working public sector workers with a pay rise, but this must be proportionate and balanced.
“Persistently higher levels of inflation would have a far greater impact on people’s wages in the long run, destroying savings and prolonging the difficulties we face.”
On Monday, the finance minister called for “public wage discipline” and “social responsibility” to prevent a 1970s-style wage-price spiral.
Inflation forecast by the Bank of England last week was expected to hit 11% in the autumn as it hiked interest rates to 1.25% – the fifth straight hike.
The government’s plans have led Labor leader Baroness Smith to accuse them of applying “two sets of rules”, one for high-income people in the city and one for workers elsewhere.
She told colleagues: “On the one hand, we tell those who work that you must have wage moderation. Doesn’t it seem a bit hypocritical to tell the city that these restrictions, these restrictions that are in place, are supposed to be? AWAY?
“Gentlemen, the bottom line is that the government seems to think the rules apply to other people, but not to them and their friends.”
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Shadow Economy Secretary Jonathan Reynolds said: “It’s the hallmark of a government reeling from crisis to crisis that instead of giving real reassurance to businesses, they’re looking at random ideas on the sofa.
“If a four-year review, three consultations and thousands of pounds in taxpayers’ money has gotten us that, it’s clear the Tories are in no position to govern.
“Conservatives should do everything in their power to make Brexit work by plugging the loopholes in the government’s patchwork deal. Labor will work with businesses to help create a stronger and safer economy.”
A BEIS spokesman said: “As announced last month, we want to tighten the rules for clawing back bonuses from directors when their company collapses, to eliminate ‘rewards for failure’.
“At the same time, we are also investigating whether there are unnecessary restrictions on non-executive directors being paid in shares, which could ensure they are fully invested in the success of the company they lead. When the company is doing well, the directors are doing well.”
https://www.mirror.co.uk/news/politics/tories-want-cut-pay-limits-27286568 Tories 'want to lower wage caps for city bosses, but ALSO limit pay for public workers'