Will Hutton attacks Jeremy Corbyn in the Guardian because he is against pay caps although he thinks ‘pay should have a just, proportional and deserved link to the contribution that has been made’. Well, OK but pay caps (or ratios) reflect a view that there are no circumstances that justify allowing directors to enrich themselves to the extent that they do. Why is that not a reasonable political proposition?
But let us take Hutton’s argument at face value. Who should decide whether pay is deserved and how much is deserved? Hutton proposes a ‘justification process … along with the best-designed incentives’. Companies must engage in ‘a fair pay process in which directors engage with unions and staff over whether pay is proportional, deserved and driving the right behaviour’. Well, OK but when things are ‘deeply contentious’ who decides? How to resolve disagreements? Is Hutton saying that Directors’ pay must be negotiated with employees, and agreed by them? Just as employees (if they are lucky) negotiate and agree their pay with Directors? If that is what Hutton is saying, fine! I prefer that to a pay cap. But if that is what he meant he would have had to say how the rules have to change before a ‘fair process’ engages those with power and those without, otherwise he is building castles in the sky.
Finally Hutton thinks there is a political prize on offer for those who can build a coalition with convincing language to put things right but announces that it isn’t going to be Labour. Who will do it? There is no one else remotely interested. If Hutton is really interested in building that coalition why doesn’t he re-write this article to say. ‘Look Jeremy, pay caps are too blunt an instrument. Why not rely on a real extension of democracy at work by requiring companies to negotiate Directors’ pay with their staff’. And if that is too radical, say what could work instead to attack inequality driven in part by pay and bonuses that Directors and their network of interests award themselves. Instead he chooses to rubbish what Jeremy Corbyn has said, joining the chorus of critics who spend the rest of their time widening inequality.