Jeremy Corbyn moots 20:1 pay ratio limit for government contractors
Labour leader Jeremy Corbyn has dramatically shifted his proposals for an earnings cap.
Speaking in Peterborough today, Corbyn offered two new rules for contractors, alongside proposals for broader reforms.
Just hours after setting out his desire for "a maximum earning limit", the Labour leader said he would rather tackle pay ratios in the hopes of raising earnings at the bottom end of the scale.
Corbyn said government contractors should be limited to paying bosses a salary 20 times that of their lowest earners.
The plans would mean any contractors paying staff the living wage of £16,000 a year would be limited to executive salaries of £350,000.
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“It cannot be right that if companies are getting public money that that can be creamed off by a few at the top,” Corbyn said.
Outside of the public contractor market, Corbyn offered four further potential reforms:
We could allow consumers to judge for themselves, with a government-backed kitemark for those companies that have agreed pay ratios between the pay of the highest and lowest earners with a recognised trade union.
…We could ask for executive pay to be signed off by remuneration committees on which workers have a majority.
…We could ensure higher earners pay their fair share by introducing a higher rate of income tax on the highest 5 percent or 1 percent of incomes.
…We could offer lower rates of corporation tax for companies that don’t pay anyone more than a certain multiple of the pay of the lowest earner.
“We are looking at this as a consultation proposal,” Corbyn later explained.
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The Labour leader also risked further confusion over his party's support for migration reform.
Early briefs of Corbyn's speech today said that the party is “not wedded” to the principle of freedom of movement.
However, on stage in Peterborough today, he made a crucial amendment: “Labour is not wedded to freedom of movement for EU citizens as a point of principle…nor do we rule it out.”