Lib Dem candidate shows support for fair pay ratios

James Taylor speaking at Lib Dem Scottish conference

James Taylor, Liberal Democrat candidate for the Mid Scotland & Fife region has shown his support for a limit in pay ratios in a speech at the weekend.  Speaking at the Scottish Liberal Democrat Autumn conference in Dunfermline Mr Taylor gave a speech at the party’s Scottish conference in favour of a motion to limit pay ratios to 1:20.

The motion, which was carried, called on elected representatives of the Liberal Democrats to:

• Build on our reputation as the party of fairness to campaign for progressive payratios;
• Press all public sector institutions to work towards a ratio of the highest paidemployee earning no more than 10 times the wage of the lowest paid employee;
• Work to introduce a Companies Remuneration Reports Bill that would require allmedium and large companies to publish at the front of their annual report theratio of the highest and lowest paid employee;
• Encourage private sector companies to work towards reducing their pay ratios.

The motion follows on from the publishing of the book ‘The Spirit Level’, which has recently been embraced by everyone from David Cameron to Labour leader Ed  Miliband.  Cameron quoted the book in a pre-election address envisioning the “big society”, the former Labour foreign secretary Jack Straw took it on holiday and Michael Gove, the education secretary, said it was “a fantastic analysis”.

Here is James Taylor’s speech in full:

I would like to speak in support of the motion.

Equality is not just a policy for the poor; it benefits us all and, therefore, should appeal to us all.  Inequality goes hand in hand with the social diseases that blight whole communities.  I argue this not just from a moral standpoint but from a scientific and evidence based one too.

World Health Organisation data shows mental illness is much more common in more unequal countries.  United Nations figures show us that people in more equal societies live longer, a smaller proportion of children die in infancy and self-rated health is better.  Obesity is less common in more equal societies and Unicef measures of child well-being are better in more equal societies as well.  Whether its books like The Spirit Level, research by the London School of Economics or studies in The Lancet, the correlation is near to absolute – a smaller gap between rich and poor means a happier, healthier, and more successful population.  

There are two fundamentally different paths to greater equality. One depends on the Scandinavian model of redistributing income from rich to poor through taxes and benefits, while the other uses a Japanese model that involves having smaller differences in incomes at source – before taxes and benefits – so there is less need for redistribution. Although the two methods could be contrasted as the big government and the small government methods of achieving greater equality, the two approaches can of course be combined.  What this means is that how societies become more equal is much less important than whether or not they do so.

Income inequality in Britain and the US is now nearly 40 per cent greater than it was in the 1970s and during that time we’ve seen bigger government and greater centralisation.  Rather than simply waiting for the government to do it for us, we have to start making the more equal society in our lives and institutions straight away.  Greater equality doesn’t require a bigger or more centralised state as countries like Japan show.

It is in the workplace that wealth is created, income differences are first established and where we are most likely to be subjected to hierarchical ranking.

I agree with Will Hutton that government should be promoting a wider view of ownership than just the traditional limited company or PLC.  Mutuals, Co-Operatives and other forms of democratic employee ownership and control also has many advantages as a way of creating a more egalitarian society. It puts earning differentials under democratic control, redistributes wealth substantially, prevents external shareholders taking unearned income, improves productivity, develops a sense of community and begins to free people from the divisions wrought by hierarchy and status competition.

If the old ‘Greed is Good mantra of the 1980′s taught my generation anything it is that more economic growth will NOT lead to a happier, healthier, or more successful Scotland. In fact, there is no relation between income per head and social well-being in rich countries.  I would therefore ask you to join me in supporting the motion.

Tags: big society, lib dem, spirit level