LIBERAL DEMOCRATS & LABOUR SQUABBLE OVER HIGH PAY
By Martin Sharman, Conservative Spokesman for East Gosforth Ward
I've seen nothing more ridiculous than Labour and the Liberal Democrats trying to outdo each other at this month's full council meeting on the subject of restricting people's pay.
It seems the left are obsessed with reducing "inequality" as an aim in itself. Of course I am in favour of helping those on the lowest incomes better themselves and earn more, particularly if this is done by developing skill sets and motivation than simply increasing the level of state-sponsored benefits.
However, in their quest to reduce "inequality", the left have realised that they can achieve their stated aims, not by helping to increase the incomes of those at the bottom, but by restricting the incomes of those at the top. This statistical trick would indeed reduce inequality - by making everyone, on average, that little bit poorer.
Scant on detail but high on rhetoric, this debate was illiberal leftism at its most bizarrely illogical. Using the recent economic troubles as a smoke-screen, the suggestion was that a "high pay commission" be set up to restrict the incomes of those who are deemed to earn "too much." Little time was given to the details, leaving unanswered questions such as:
· How much is "too much"?
· What happens to the money that is not paid to these individuals? Does the state take it or does it languish in the coffers of banks?
· What happens when the tax take reduces because there is less money being paid and spent? Do we increase tax rates to compensate? A double-whammy vicious circle.
· What happens when these high-flyers decide to move to a country with less a restrictive (and more sensible) remuneration policy?
The city councillors are fond of trying to outdo each other on another topic: their enthusiasm for Newcastle United. I wonder how they would feel as their high pay policy kicked in, one by one the stars of their favourite team left to pursue the higher wages available elsewhere? It would be an own goal worthy of Damien Duff.
The current problems with some banks can be blamed on a potent cocktail of overborrowing motivated by short-termism in bonus payments to investment bankers mixed with an alarming lack of scrutiny from shareholders. The market responded, reinforcing the natural braking effect of a free-market economy, complicated only by the socialist knee-jerk response of throwing taxpayers' cash at the problem: privatising the profits yet publicly underwriting the risks. An unholy mess.
We should be focused on high achievement. Work is the only true way out of poverty, not handouts or restricting pay. Those at the bottom of the earnings pile should be encouraged to gather new skills through free adult education schemes, and put their newfound skills into practice in a place of work. Yes, easier said than done, and certainly a lot more difficult than capping pay, but the only long-term solution to the problem of poverty.
I am proud of the high achievers in this country, and believe they deserve the market rate of pay, however high that might be. As long as they pay their taxes, the state should keep its nose out. Our high achieving sportsmen, musicians, executives, and yes, bankers, should be free to live and work in this country without fear of losing their incomes. We should be proud of them, aspire to match their success, and reinforce the belief that, no matter how humble one's beginnings, anyone can achieve greatness in this country.
Blog RSS feed
