In a series of interviews on Tuesday, Labour leader Jeremy Corbyn has discussed the possibility of a maximum earnings cap. He said this would fundamentally address inequality within the UK, citing the money paid to footballers as an example of ridiculous earnings.
We asked readers whether they supported the idea, and if they did, what they thought the maximum salary cap should be set at. Suggestions ranged from an annual earnings cap of £25,000 at one end, to £5m at the other. Of the people who submitted a suggestion, £200,000 was the most common preferred limit.
The suggestion was popular with many readers who wrote in to us. Francis Price, 66 from Sevenoaks, told us that the move would be ‘long overdue’
“Inequality of wages in Britain has become a national scandal,” he wrote. “Wanting more and more money every year, millions and millions of £s while the majority struggle is simply greed. We are all citizens and we all ought to share in Britain’s wealth. Why should a few be paid far more in a year than they could possibly spend in a lifetime while many others are forced to eat from foodbanks?”
James from the Midlands said “For the first time in living memory a labour leader is prepared to address income disparity in practical terms rather than merely idealistic rhetoric.”
Fleshing out his proposals for pay discrepancy during a major speech in Peterborough on Tuesday afternoon, Corbyn backed away from the earnings cap proposal, instead focusing on pay ratios.
What should the maximum wage cap look like? Corbyn's answer - 20:1. Well, if you are a government contractor https://t.co/rYngzvu1QX
— Dan Sabbagh (@dansabbagh) January 10, 2017
Some readers, including Scott Ramone, from Leicestershire, also mentioned action on pay ratios rather than an absolute maximum wage:
“I read that some executives will have earned more money in the first four days of this year than most people in the country will earn in the whole year. So I’d have a 100% tax band on earnings above a certain level - I’d suggest on earnings twenty times above the national average wage.”
Chris McCormick, from Buckingham said: “I strongly support the idea that the gap between the haves and the have nots needs to be addressed, but this should be acheived by raising the bottom, not artificially limiting the top.”
We also heard from people who felt attempts to regulate maximum earnings would damage the economy overall. Lee Walton said “It will drive wealthy tax payers to leave the UK.”
Andrew Jarvie from Inverness stated that “I believe this would be the single most harmful government policy of the modern era. Not only is this a psychological cap on aspiration for much of the country, the top 1% pay 27% of UK income tax; how on earth does he plan to plug the fiscal hole left by this policy?”
Harry from London asked: “ If you told Richard Branson he couldn’t earn more than £200k would he have bothered turning Virgin into what it is today? An employer of thousands of people, contributing who-knows-how-much to the economy and taxes.”
But for fellow Londoner Nick, it would be a move that is ethically and philosophically just. “Does a trader in Canary Wharf really work so much harder than the person who cleans their office? This kind of intervention from government could be seen as arbitrary. But is it any more arbitrary than the way that the market decides which jobs are more worthy than others, and therefore can pay higher salaries? Economically there are many arguments for a cap - and more redistributive system. There are only so many consumer products that a billionaire will buy.”
