Does Gordon Brown dare follow Obama's lead on salary cap?
Now what is Gordon going to make of President Obama’s cap on top people’s pay?
Two week’s into his presidency Obama has decreed that no executive working for an outfit receiving American taxpayers’ money is to get more than $500,000 a year – say £350,000, though it would have been nearer £250,000 last summer.
By the time he has handed out his $819billion “stimulus” that will be a lot of well-heeled Americans spluttering into their bourbon on the rocks. Stand by for an immense and highly enjoyable rumpus.
Well, if Obama dares challenge Wall Street’s erstwhile masters of the universe to work for a tiny fraction of what they used to regard as a routine bonus, what about Gordon? He has a stimulus, too.
He also has all the people in the upper rungs of the 32 banks and building societies the Bank of England says collected £185billion under its special liquidity scheme.
Has he the nerve to tell them to work for £350,000?
It is scarcely a breadline wage, materially more than we pay him for being Prime Minister. But if you have been toddling along on what you think of as well-deserved seven figures for the past few years you are not going to be a happy bunny.
That will not bother Gordon. He is a Labour Prime Minister, after all. But for that very reason he is not going to do it. The last Labour Prime Minister to try an incomes policy was “Sunny Jim” Callaghan.
It was called a Prices & Incomes Policy, but the prices bit didn’t work.
Everybody was supposed to get the same pay increase decreed as a percentage, or at one stage so many pounds a week, by the Government.
Since the top slice of top pay was taxed at 85 per cent, it was tougher at the top – just like Obama’s vision of Wall Street.Real life was otherwise.
Directors, banned from paying themselves what they liked, lived richly on tax-free expenses – and turned a blind eye when their staff (some journalists among them, I fear) did likewise.
Directors came off best, though, with company chauffeurs, company villas on the Med, company glory holes in stately homes, company golf club memberships. Some were said to wear company suits from Savile Row.
The City of London was an excellent place for a leisurely lunch and a quiet one on a Friday afternoon. The West Midlands, by contrast, was famous for its work ethic – and seethed with admiring rumours about people dodging the Government’s ban.
It may seem feeble, but Gordon would be unwise to chase Obama down that road. He would do better to devise deterrent penalties for those who award and receive perverse and scandalous, bonuses.
He will find some in the public sector as well as the wicked banks.