A campaign for the establishment of a High Pay Commission to crack down on excessive salaries is to continue, despite the Chancellor’s warning that he was “not persuaded” by the idea.
Calls for an investigation into the effects of “excessive” pay on the economy have been backed by Birmingham MP Lynne Jones (Lab Selly Oak) along with fellow Labour backbenchers, Liberal Democrat Treasury spokesman Vince Cable and MEP Caroline Lucas, leader of the Green Party. It has been led by pressure-group Compass, which has links with the Labour left but also runs cross-party campaigns.
Compass plans to call for a debate at Labour’s annual conference next month. It has blamed “out of control rewards” for promoting risk-taking.
Mr Darling said: “I’ve made it clear we’ve got to stop the practice where traders in banks were incentivised through bonuses to take excessive risks which neither they nor the bank management understood, with disastrous consequences.
“I believe we have got to make sure that the Financial Services Authority has got all the powers it needs to make sure that, where you’ve got these excessive payments, they can take action to deal with that,” he said.
“It’s important that we do this, we will have (Sir) David Walker’s report on bank pay practices later this year, we will look at all the proposals together, and then we will introduce legislation.”
But saying he was “not persuaded” of the case for a high pay commission of the type suggested by Compass, he said “all the evidence showed this was best negotiated between employer and employee”.
There was, however, a role at the other end of the scale, for low pay, and in 12 years the Government had introduced and increased the national minimum wage and tax credits, Mr Darling said.
Shadow chancellor George Osborne has also opposed plans to introduce a high pay commission.
But Gavin Hayes, general secretary of Compass, said the campaign would continue.
He said: “It is exceptionally disappointing that the chancellor has attempted to close down the debate on excessive pay by making these comments in regards to a High Pay Commission.
“Particularly disappointing given the huge support for such a body and given the major role that greed and excess played in bringing down not just our banking system, but our entire economy. The public demand not just rhetoric on excessive pay from our politicians but concrete action. A High Pay Commission could play a crucial role in coming up with the evidence-based solutions we need to curb excessive pay and ensure an economy run for the many not just the few.
“We will continue to make the case for such a body to be established and for the Government to take decisive action on high pay.”