I had to do a double take yesterday when checking my Facebook feed. There, proudly stated on the Conservative Party’s very own Facebook page, and reported on BBC News, the Conservative’s were denouncing Executive pay. Or, to put it another way, they were denouncing the fact that, in order to attract the best private sector bosses in the talent pool, private companies choose to pay good money.
The article took my breath away. I thought we were done with the unacceptable paternalistic strong state rhetoric of Ted Heath, but May seems to be channelling his spirit. Is the PM trying to outflank Corbyn?
Time for some home truths about those at the top of the pile in the private sector. They more than make up for their high salaries. They employ people, who then have more disposable income and who in-turn spend more. The top 1% of earners of the UK pay as much tax as the poorest 50%. The tax burden on the top 1% has trebled since the 1970s as this article from The Telegraph highlights. The amount of money they give to the Government means more money can be spent on schools, hospitals and defence of the realm.
It’s a shame that the current Conservative leadership is so enthusiastically attacking the golden egg. The Party is becoming a hostile place for classical liberals and libertarians, just look at the Conservative Party’s website, where we are told all about the good Government can do by the Chairman, Patrick McLoughlin. For supporters of small government, its Ronald Reagan’s words that inspire; “the nine most terrifying words in the English language are I am from the Government and I’m here to help”.
Now it’s time to get to the nub of the issue of the pay of those at the top of the pile in the private sector. We should remember we are talking about a sector where the money they spend on wages doesn’t leave us poorer in the pocket as it does with those leading the public sector. This is money that the company has generated through the services they provide or the goods they sell and they should be able to pay whatever they choose to attract the best talent.
I’ll be generous and admit that I do not have a problem with voluntary shareholder activism. Shareholders have the interest of the companies and its employers at its heart (or so they should). Therefore, if they feel that the pay of a Chief Executive is overgenerous then they should raise this at board meetings, but I don’t think there should be a power-grab by the state to impose what they believe to be unacceptable wealth creation, considering the state by its very nature does not create wealth. I agree that shareholders should use their voice more, but this should be encouraged voluntarily; not imposed by a heavy-handed state.
It’s also laughable when you consider how much NHS Executives, Council Chief Executives and others are paid in the Public Sector, alongside their generous public sector pensions. Indeed, research from the Taxpayers’ Alliance that came out in April 2017 in its Town Hall Rich List shows that in the period 2015-2016, the Chief Executive of Sunderland Council, David Smith was paid £625,570 and on top of this received pension contributions of £331,114. This is important given it is our money being spent frivolously, yet I’ve hardly heard a peep from the PM, who seemingly prefers in the worst traditions of socialism to constantly lash out at the wealth creating private sector.
OK, you’re probably thinking, but surely those in the public sector are on average worse off than their private sector counterparts; wrong. Figures show that on average public sector workers earn £506 per week, whilst those employed in the private sector earn £464 per week. Then if you take the time to look at pensions over 90% of those working in the public sector are enrolled in pensions, whilst under three quarters are in the private sector. The fascinating article in Business Insider which I have taken the figures from goes in to more detail here.
With the private sector being treated abominably in the upper echelons of the Conservative Party, I imagine that Margaret Thatcher is turning in her grave, the ghost of Winston Churchill feels he needs to knock some more brandies back, whilst Adam Smith looms in heaven in tears at how politicians of all stripes continue to lash out at wealth creation. In his grave in Highgate cemetery ,Marx rubs his hands together gleefully and bursts out laughing.
Needed more than ever before is the voices of sanity from organisations like Conservatives for Liberty, so if you want to be part of the fightback for the values for small government please join Conservatives for Liberty.