Big Debate: Should the UK introduce a maximum pay cap?
PUBLISHED: 13:00 18 January 2017
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This week we want you to decide whether or not the UK should adopt a maximum pay policy.
Labour leader Jeremy Corbyn has spend the last week being criticised over his calls for a maximum wage.
It was reported on Tuesday last week that Corbyn supports a cap, but after days of confusion the Daily Mail reported on Sunday that he wouldn’t extend the cap to footballers. As the argument persists, we ask our readers whether he’s on to something.
David Thorpe – Newham Liberal Democrat
As usually happens when hard line socialist utopias are created, maximum pay would help the rich not the poor.
When employees reach the maximum, other ways would be found to reward them, increasing inequality and reducing the tax take from the rich.
In Soviet Russia access to the splendour of the Bolshoi Ballet was a perk for the rich – the poor weren’t helped and no tax was collected on the perk.
Last week’s poll results
We asked Recorder readers:
Should migrants have to learn English before settling in the UK?
Yes – 73 per cent
No – 27pc
With a maximum wage, employers would pay bonuses in shares or profit shares when they can’t pay extra cash. When sold these are liable to capital gains tax, which is lower than the income tax rate above £140,000. The other option is pension contributions, which aren’t in your salary to tax, but you will have a happier retirement than a poor person. If I were rich, I know what I would choose.
Other benefits in kind would be even harder to tax, whereas having the income through PAYE would mean the government has a greater chance of collecting the tax.
Closing some of the loopholes I described above (and there are hundreds of others) would do much more to achieve the aims of reining in excessive pay, but they are more iterative and less headline-grabbing, so they’re no use to politicians of the Corbyn kind.
Scott Jones – Newham TUSC (Trade Union and Socialist Coalition)
At noon on January 4, when most were just a day and a half back in work after Christmas, top bosses had earnt more than the £28,200 median salary in 2017 already. Dubbed “Fat Cat Wednesday”, this and news five families are collectively worth as much as Britain’s 12 million poorest show we’re not all in it together.
Austerity since the economic crisis in 2008 has only been for the 99 per cent while the 1pc raked in even more grotesque profits, pay and bonuses.
A maximum wage could put an end to the ever spiralling gap between rich and poor. We’d support the cap because the only winners would be the millions – not the millionaires who have been winning for decades. And a maximum wage should be linked to a higher minimum wage, which TUSC believes should be £10 an hour. Bosses shouldn’t earn £1,000 an hour when hard-working nurses suffer pay freezes. Premier League footballers shouldn’t earn millions when clubs’ cleaners don’t earn a living wage.
But as long as a super-rich minority owns and controls top corporations and banks, they’ll use them for private profit. We should nationalise them under the democratic control and management of workers, so the working class can earn a fair share of the wealth and plan what we make to meet the needs of all.