Fat cat pay: empty words from Cameron

Roger Shrives

Prime minister David Cameron now tells us that he is determined to announce action in this spring's Queen's speech on the phenomenally high pay of 'fat cat' company executives. Is the millionaire old Etonian Cameron committing class treachery? Could he be drummed out of the Bullingdon club and the Chipping Norton set?

Fat cat pay is a political problem for Cameron. At a time of recession, wage freezes and cutbacks, chief executives in 87 of the FTSE 100 (Britain's biggest firms) took home on average £5.1 million in basic pay, bonuses, share incentives and pensions contributions in 2010-11, according to a new report.

This increasing inequality makes working class people angry and also annoys many in the Tories' middle class homelands. Cameron thinks that a spoonful of action against fat cats would help his austerity and cuts 'medicine' go down.

Cameron wants shareholders in these companies to veto pay deals that are excessive. But shareholders are there to protect their own interests and tend to be dominated by those with the largest number of shares. If they can be convinced that the executives will soon be increasing profitability, most of these fat cat deals would still probably go through.

Could Cameron's plan work? John Hourican, senior executive at the RBS bank (subsidised by the taxpayer) has just slid under what he sees as a closing door. He is in line for a bonus totalling £4.3 million, in the same week as RBS talk about sacking 10,000 staff. RBS, with its recent history of dubious deals and mergers, might be an ideal example of undeserved bonuses.

But in the three months before Cameron's proposed bombshell, executives from many firms will battle, both within the government and outside, to try to make these 'attacks' from their friends disappear. Their accountants will work overtime trying to devise more and more complex schemes to escape the government's reach.

Ed Miliband's Labour opposition merely whinges that Cameron's government has done nothing to stop the upward surge of the fat cats since they came into office in 2010. That invites the question: what did New Labour do to curb fat cat greed in their 13 years in power? In reality, they geared all their policies to bolstering capitalism and the rich.

There is an alternative to Cameron's tinkering. Fat cat pay amid rising poverty is yet another symptom of an unjust capitalist system. The lasting solution would be to take the running of the big companies - and of society itself - out of the hands of the capitalist class.

Nobody in the media, apart from the Socialist, puts forward the obvious solution. Take the FTSE 100 companies into public ownership with minimal compensation for those shareholders in need! Run under democratic control, with the 99% taking the place of the 1%, shareholders, obscenely high fat cat pay and cutbacks could become just an historical memory.