Contribution
My Lords, my Amendment 320 sits in glorious lone splendour in this group. I am not responsible for degrouping it; that was the way it was arranged. Noble Lords will see that this is a proposed new clause to introduce a maximum pay ratio. I thank the Public Bill Office for assisting me with the drafting.
The noble Lord, Lord Sharpe, took us into celebrity land with Usain Bolt and Mo Farah. I am going further into that space with a forthcoming event from this week: the wedding of Jeff Bezos and Lauren Sánchez in Venice. I am relying here on the interesting reporting in the Guardian from Zoe Williams, who has been spending time with the campaign group No Space for Bezos and finding that in Venice there is considerable resistance to a billionaire taking over a city and totally disrupting the life of that city for three days. Williams quotes one of the local campaigners:
“We really wanted to problematise the ridiculous and obscene wealth that allows a man to rent a city for three days”.
Williams reflects in the article that
“when wealth itself is seen to be acting in its own interests, and it has accumulated to the degree that its impact scars every poorer life with which it comes into contact”,
we have a problem.
This amendment sets out Green Party policy—yes, this is long-time Green Party policy—but I am really aiming to assist the Government constructively here, and to assist the Committee as well as perhaps our national debate, by demonstrating that it is possible to lay down bridges to cross the deep fissures in our society. They are not just in Venice and they do not just involve Amazon—although I note that the Government have been applauding an expansion of Amazon here in the UK. We might think about how many of the small businesses we have just been talking about might go out of business as a result of that. I posit that it is essential to start to bridge these chasms, to tackle the poisonous inequality that so affects our political landscape.
Bringing the context closer to home, noble Lords may perhaps have expected me to cite research out only a week ago from the High Pay Centre, which analysed five years of mandatory pay ratio disclosures across the FTSE 350. This was a previous modest legislative attempt, hoping that shining a light on the level of inequality might have some impact in reducing that inequality. The study clearly showed that the attempt to do that has failed. The figures have basically bobbled around since 2019, and the current ratio of median CEO pay to the median UK employee was 52:1. That has been at a similar level ever since the ratio started to be recorded. I note that it is even worse for the FTSE 100, where the median CEO to median employee pay ratio was 78:1. Those are the middle figures but, if we take the widest measures, we go to the security and catering group Mitie, where 575:1 is the ratio not to the lowest-paid employee but to the median employee. At Tesco it is 431:1. This situation is doing huge damage to our society, and I put it to the Government that they surely have to tackle it.
A 10:1 ratio is Green Party policy. I know from the discussions that the Minister kindly had with me before this debate that she will not leap up and support my amendment, but I hope she may be able to provide some response, at least to acknowledge that we have a problem. The pay differentials also react to the low-pay environment in which those essential to the success of a business are not getting the respect, as well as the pay, that they deserve. Meanwhile, a few at the top are incentivised to chase short-term profits and share price valuation at long-term cost to society but also to the businesses that they head.
The impact on communities is evident in towns and cities, where the vast bulk of workers are now trapped on or very near the minimum wage, while money is shovelled away to faraway company headquarters. Companies defend these sums as reflecting performance, but all too often, as we have seen with the water companies, that is far from the case. Why is it that every worker does not benefit if a company is doing well, as they have all contributed?
I finally note that, yes, this is also an environmental measure. To take just one element of the CEO lifestyle, the wealthiest people in the UK burn through more energy in flying alone than the poorest use in every aspect of their life. Environmentally, as well as socially and politically, we cannot afford a society split between a few have-yachts and the majority have-nots.