The past decade has seen widening differences in income and wealth, which taxation and regulation have failed to address. When New Labour was first elected, it established the Low Pay Commission to measure the claims of workers for a higher minimum wage against the wider economic impact, particularly on employment. There is now a compelling case for a high pay commission to measure the claims of top earners that their rewards are justified and necessary, even if they offend natural justice and our sense of fairness.
So wrote Vince Cable in yesterday's Guardian, supporting Compass's call for a High Pay Commission to investigate pay at the top, and come forward with proposals to rein it in. Compass's initiative deserves backing - but Cable's words of support worry me.
By suggesting the highest paid should be made to justify their incomes, he implies individual desert is the issue, and indeed he goes on to make clear he's fine about Bill Gates being worth more than the £31.1 billion interest Britain pays on its national debt. It's rewards for failure and uselessness that he really objects to, as David Aaronovitch has rightly pointed out. But why be so timid - so narrowly, individualistically moral about it? The point isn't whether such and such a banker has properly "earned" his six-figure bonus, or whether a premiership footballer has "earned" his six-figure weekly pay (I think Vince is slightly out of date about football salaries, at least at the very top). The real question is whether in Britain today where many of those who are lucky enough to have work survive on the minimum wage or less and where average income (distorted upwards by Frank Lampard and Stephen Hester) is twenty thousand or so it's right that anyone should receive such vast revenues, regardless of what they've done to "earn" them. It's not about market or merit, but equality.
Much greater equality would be better for us all. The only serious question is how to achieve it, although the evidence suggests that doesn't matter. I'd be happy whether we tax or, as David Blackburn suggests, "regulate" (another word for 'legislate") big bonuses and pay out of existence. A commission to look into it would be a start but it should not be a tribunal before whom the rich are forced - or allowed - to defend their privileges. It should work out a mechanism to reduce the greatest incomes, as the minimum wage aims at raising the lowest.
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