Executive Pay

Last week I met a local green campaign group in Steyning.  We had a good debate about environmental issues and this led to a discussion about economic growth.

Some environmentalists call for 'prosperity without growth', believing that the drive for economic growth will eventually deplete our natural resources.  I believe that growth must be sustainable - that we must live within our environmental means.

But it's rather easier to reject the very idea of economic growth when living in a wealthy western nation than it is in parts of the world where people haven't enough to eat.

Capitalism is founded on freedom and, for all its faults, it's better than the alternative of state control.

But I don't believe in casino capitalism, and I think there is real concern about unbridled executive pay at a time when most people's incomes are falling.

In 1997, chief executives' pay was 47 times average pay.  By 2010 this had risen to 120 times the average.

Those who own these companies ultimately have responsibility for pay levels, and they need the power to redress the disconnect between pay and performance.

So this week the Government proposed giving shareholders a binding vote on pay - with a 75 per cent threshold - and increasing the power of remuneration committees to challenge salary decisions.

We also suggested revising the Corporate Governance Code so that companies can claw back pay awards from executives who have not lived up to expectations.

Wealth creation is important.  I think we need job generators, entrepreneurs who work hard and take risks.

But I do share public concern that, as we face the downturn, working people should not unfairly bear the brunt while others receive unjustifiable payments.

This week has also seen arguments in the Lords about welfare reform.  I think it's right to cap benefits at £26,000 - equivalent to a salary of £35,000 before tax.

The idea that this would leave families in poverty or homeless is insulting to the majority in this country who support their own families on much less.

The ‘something for nothing' culture has damaged our country at all levels.  We should be as unhappy with unjustifiable top pay packages as we are unjustifiable welfare claims.