Unions reopen fat cat pay row


Britain's trade unions have claimed that boardroom pay is out of control after they released figures showing that boardroom salaries have more than doubled over the past six years while average earnings have barely risen at all.

According to the TUC, for every £100 a FTSE 100 director earned in 2000 they now earn £205, while ordinary employees now earn just £106 after allowing for inflation. In other words, directors' pay has increased 17 times faster than average pay.

Brendan Barber, TUC General Secretary, said that while he accepted that "envy is never a very attractive attribute," these huge disparities were beginning to have a divisive effect on society and harm the economy.

"Plump felines became fat cats some years ago, now they are dangerously obese," he said.

"'But it is not just director's pay, there are other bonuses and perks too. It is estimated that City bonuses this year will total almost £9 billion. That would be enough to have given everyone at work in Britain a Christmas bonus of more than £350."

Barber also criticised the fact that FTSE 100 directors have amassed pensions worth nearly £1 billion between them, meaning that on average they can retire at 60 on a final salary pension worth nearly £3 million.

However as new research from The Institute of Economic Affairs has found, these sums pale in comparison to the cost of the inflation-linked pension schemes enjoyed by Britain's six million public sector workers, whose collective taxpayer-funded liability has now reached more than £22.3billion per year.

While Barber described Briatin's top directors as "a growing group of people who are rich enough to float free from the rest of society", Richard Lambert, director-general of employers' group the CBI, pointed out the emergence of a similar rift between public sector employees "with a generous, early pension to look forward to," and their private sector counterparts "funding this through taxes while working longer and with a more uncertain retirement for themselves."

A CBI spokesman added that in a global economy, salary levels for senior-level talent had to reflect global realities.

"Having the right management team in place can make the difference between a major company's success or failure, with repercussions for all in society, not just those at the top," the CBI insisted.