TOP EXECUTIVES’ pay is still soaring. Chief executives from the 100
biggest UK-based firms received average pay rises of 10% last year, more
than twice as high as increases across industry.
But pay’s only half the story. Some fat cats in Britain’s boardrooms
and City of London dealing rooms have had bonus payments totalling a
record £19 billion this year – roughly the same as Britain’s entire
annual transport budget.
Bosses’ bonus payments increased by £2.5 billion (16%) this year.
Following a £1.5 billion rise last year, they have leapt by a quarter in
two years. Over half were paid to top-flight people in ‘financial
services’ in the City of London and Canary Wharf.
The biggest bonuses, often many millions of pounds, go to a few
investment bankers or financiers for attracting more business for their
boss or tying up large merger deals. Many City banks got record profits
through rising share prices and a boom in mergers and acquisitions.
Britain’s banks together made a record £33 billion of profits in
2005. First half figures suggest they may beat that in 2006 despite the
growing numbers of personal insolvencies and bad debts. Other companies
paying huge bonuses include oil companies such as BP and Shell who have
profited from the tripling of oil prices.
This echoes the enormous class divide in all capitalist economies
where profits, dividends and massive bonuses accumulate at the top.
Meanwhile, workers’ ‘average’ earnings went up by 4.3%. And a recent
survey showed that most people spend an enormous proportion of their
income on essential living costs such as utility bills, mortgages,
rents, food and travel expenses and on servicing debts such as credit
cards.
Cardiff was Britain’s most expensive city to live in. 97% of
residents’ earnings – £1,059 out of £1,088 – were committed to
outgoings. £160 a month went on credit cards and other debts. Londoners
paid out £1,338 on average although their ‘average’ income was higher.
Many people must be falling further into debt with each pay cheque.
The effect of that on Britain’s economy could eventually be enormous.
