Tim Roache: The scandal of executive pay shows why we need trade unions

3rd August, 2017 4:30 pm

The status quo isn’t working for working people and the Tory government still hasn’t woken up to the seriousness of this. Today’s figures from the High Pay Centre show that the FTSE 100 chief executives are taking home an average of £4.5m per year. What on earth does anyone spend that on? How many yachts can one person need? For many it is a case of poverty pay and insecure contracts while they create the wealth for those at the very top.

The gulf is so wide that it would take 160 years for typical workers to earn what those at the top are taking home in just one year. This is screwed up on so many levels. It is damaging to organisations, to the economy and the sort of society we want to build. There is a mental health dimension to this too. If you are made to feel worthless then you can be forgiven for not feeling like you don’t have a stake in your society or the future.

It goes without saying that if people feel the status quo is working against them they will not think twice about voting for radical change.

Last July, as the new prime minster, Theresa May appeared to recognise this. She acknowledged the “irrational, unhealthy and growing gap between what these companies pay their workers and what they pay their bosses”, having previous pointed out “the people who run big businesses are supposed to be accountable to outsiders, to non-executive directors, who are supposed to ask the difficult questions”. Her mission statement boldly proclaimed “we’re going to change that system – and we’re going to have not just consumers represented on company boards, but workers as well.” That was then.

Months later the PM had watered down and then climbed down from her proposals after a backlash from big business and their ambassadors in the Tory Party. Now, instead, it will be up to businesses themselves to decide if they want a worker representative – or to appoint someone already on the board who will consult with “stakeholders” including the workforce. Take a clipboard onto the shop floor and have a few suggestion boxes. I can predict now how such a pathetic policy will work out in practice.

Boardroom pay can’t be looked at in isolation. It all adds up. Working people have been made to pay for a global financial crisis caused by the wealthiest one per cent. Teaching assistants, school cooks, shop workers and warehouse workers didn’t crash the economy.

It’s not just about fairness, as crucial as that is – it is not in our national economic interest either to have such inequality.

On the same day as the High Pay Centre’s figures came out, the Bank of England showed that average growth continues to be lower than before the financial crisis a decade ago. Other surveys show consumer confidence is down and the economy is slowing. Your average GMB worker doesn’t stash their cash in a Panama tax haven. They spend it in the high street and in the communities in which they live and work.

Not only has the Tory government proved itself simply incapable in following through on the most basic of pledges, the chancellor is quite happy about continuing with real terms pay cuts for ordinary workers employed in our public services.

Yes – we need a Labour government if we are to get a grip of the extreme excess at the top. But in the meantime we are not powerless. We need to support trade unions taking action for better pay and show support and solidarity with those taking action. If you have never joined a trade union or talked about it with your workmates – now is the time to do  it. There are six million of us in the UK and strength comes from numbers.

Trade unionism is an antidote to unfairness and inequality at work. Greater collective bargaining and worker voice in the boardroom is not remotely controversial in many countries across Europe. This the key to so many social, economic and political challenges facing the UK right now. Get that right and the whole country will benefit.

Tim Roache is general secretary of the GMB.

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