Rishi Sunak has asked the UK’s top executives to rein in their pay as their workers face a cost-of-living crisis – but he has criticized nurses’ demands for a double-digit pay rise.
Speaking at the G20 summit in Indonesia, the British prime minister said: “I would say to CEOs to embrace restraint at a time like this and make sure they also look after all their workers.”
His comments will cause concern in some boardrooms given executives’ complaints that listed UK companies have already been unable to match the pay offered by their global and often private rivals.
Sunak added that he was “sure that executives in most companies will think about pay settlements for senior management and their workers and make sure they are fair. That is what everyone expects.”
Chancellor Jeremy Hunt is expected to use Thursday’s fall statement to raise the maximum bankers’ bonuses, according to Whitehall insiders. It’s one of the few announcements his predecessor Kwasi Quarting made in the September micro-budget that Hunt isn’t expected to reflect.
Britain’s new prime minister is one of the richest prime ministers ever to hold the position given his past career as a banker and hedge fund manager and the family wealth of his wife Akshata Murty, whose father founded the IT company Infosys.
A report from PricewaterhouseCoopers last week showed that FTSE 100 CEO salaries have been at their highest levels for at least five years after increasing nearly a quarter on average this year – driven by higher bonuses – but most companies pay less than inflation increases to their employees. .
Sunak said he did not want to see a sharp rise in wage prices because “the people who are going to suffer the most are the people on lower incomes . . . and we will still be having this conversation in a year’s time”.
Policymakers have been criticized for suggesting that workers must accept painful pressure on wages in order to bring down inflation at a time when many companies have seen post-pandemic profit soaring and big bonuses for CEOs.
Since then, Andrew Bailey, governor of the Bank of England, has argued that companies need as much restraint in executives’ pay as workers in their wage demands.
Unions argue that inflation has been caused by corporate profits at the expense of workers — and that public sector workers in particular cannot be expected to swallow another year of wage cuts in real terms, after a decade of austerity.
“Government must see key services as an engine of economic growth, not a drain on the public coffers,” said Christina McNea, general secretary of Unison, the UK’s largest union.
She and other union leaders representing NHS workers met Health Secretary Steve Barclay on Tuesday for talks aimed at helping avert the risk of strikes that could hit hospitals across the UK over the winter.
On Tuesday, the prime minister entered the fray, slamming nurses’ demands for a massive pay rise. Last week, the Royal College of Nursing voted in favor of industrial labor and called for a wage increase of 5 per cent above the rate of inflation.
Sunak said he was “very grateful to our nurses” but “what the unions are asking for is a 17 percent increase in salary and I think most people who watch the film will understand that this is unaffordable”.
There is sympathy for the situation many people in the UK face, the executives told the Financial Times, but that salary has been a complex issue often linked to historical performance targets.