Since becoming prime minister, Theresa May has taken the (very) occasional opportunity to attack the corporate greed of Britain’s major companies and the pay rises being given to the “fat cat” bosses, even talking about their “excesses and irresponsibility”. She has even repeated the infamous words of Ted Heath from the 1970s in talking about the “unacceptable face of capitalism.”
The Economist reported that May had been warned that if she didn’t do something about the excesses of capitalism then its enemies would do so instead. All this talk ended up worrying some Tories so much that George Freeman MP complained that May was in danger of “flirting with anti-capitalism.”
Well, they need not have worried. All the promises of holding down bosses’ pay and sops like putting workers on company boards have in reality come to nothing. The Tories are going to do nothing to offend their rich paymasters.
Instead, the Tories have proceeded with such scams as letting off firms who have been caught out paying below the minimum wage. No fines or “naming and shaming” for these crooks - all they have to do is “self-correct” their crimes and they are off the hook. Over 3,000 companies have benefited from this deal. Evidently they are not “unacceptable” for the Prime Minister.
May claims that most “responsible” companies “abhor” such corporate greed. The reality is that they are all seeking to pocket as much cash as they can at our expense. The last ten years have seen big business raise prices, hold down or even cut workers’ wages, slash investment expenditure, and generally cut back everything apart from the profit margins and the high salaries they pay themselves.
It is said that the bosses of Britain’s top 100 listed companies now earn on average £4.5 million pounds a year. One boss, Martin Sorrell from WPP, takes home a tidy salary of £48.1 million. Bizarrely, this is a pay cut - in 2015 he was on £70 million! In fact, 2015 was a bumper year for bosses with average pay rises totalling 10%.
Public utility company bosses are also doing very well, even though the prices of gas and electricity are shooting up. SSE gave its boss a 72% payrise. Thames Water paid out a £54,000 bonus to its boss, presumably not for allowing the endless water leaks we have seen in recent years.
It is said that these huge salaries are somehow necessary to boost a company’s success. Consider then the story of Peter Crook, former boss of Provident Financial. As reported in the Financial Times of 28th August by Jonathan Ford, this guy was paid a total of over £30 million over a five-year period before getting the boot after earnings slumped and two profit warnings were issued.
In reality, we are told, the initial success he enjoyed was largely down to “luck” before his corporate blunders sent the company into a tailspin. So much for the “miracle” bosses! In truth they know next to nothing about how a company works, unlike the workers they employ and exploit.
In fact, the general performance levels of Britain’s bosses are questionable at best. Output per hour for UK firms is currently 15.9% lower than in other G7 countries. Productivity levels are a joke as a result of profits taking priority over investment. McKinsey calculate that 66% of UK workers work in “low-productivity” companies as against 55% in Germany.
These problems have been discussed for years when looking at UK industry, but nothing has been done by Britain’s bosses, other than to boost short-term profit figures so that they can claim nice fat bonus payouts at the end of the fiscal year.
So who loses out? The workers for a start, with public sector pay capped at well below inflation levels and private sector workers getting even less. According to the Institute of Fiscal Studies earlier this year, pay for workers is “flatlining” and will continue to do so until at least 2022, representing 15 years of decline in living standards.
So it’s huge hand outs for a rich few; cuts and hardship for the many. What we see here is not the “unacceptable” face of capitalism, but the one and only ugly face of a system that must go. Fat cat payouts are not the exception but the rule for big business.
A Corbyn-lead Labour government must take urgent action to nationalise - without compensation - the big monopolies, banks and insurance houses as part of a socialist plan of production under workers’ control and management so that this corporate greed can be ended once and for all.