Last weekend Prime Minister Gordon Brown hosted leaders of the G20 major economies in London to assess progress of the co-ordinated economic recovery stimulus package in which he had played such a leading role and to prepare further measures for the Pittsburgh G20 summit later this month. It appears that the London G20 April package has been a success. Overall the world economy led by China, India, and the major Eurozone economies France and Germany is coming out of recession. The UK and USA with bigger financial institutions were worse hit by the credit crunch but we are also expected to be out of recession by the end of the year. However it would be complete madness to undermine this fragile recovery by adopting cuts to public spending on policing, transport and education or cutting taxes on the very wealthy and reduced inheritance tax on millionaires as called for by Conservative Shadow Chancellor George Osborne. G20 leaders also discussed bankers bonuses. I am pleased that the Prime Minister criticised the reprehensible behaviour of some banks and signed a joint letter with the German Chancellor Angela Merkel and French President Nikolas Sarkozy. But this crisis is not just about banking and bonuses. The high pay and high risk culture at the top of our companies had a destabilising and damaging effect on our entire economy and society. We should not go back to a business as usual approach. On the contrary we should be adopting progressive policies of fair pay and taxation . I am supporting proposals to establish a ‘High Pay Commission’ to focus on how high pay and remuneration have affected economic stability; to investigate the link between high pay and long term performance within companies and financial institutions ; and the effects of high pay on society, in particular the growing pay gap. This should also look at public sector pay. Why for example is the Chief Executive of Redbridge Council paid more than our Prime Minister ?
10 September 2009