Rishi Sunak has told the UK’s top executives to rein in their pay as their workers face a cost of living crisis — but he criticised demands by nurses for a double digit pay increase.
Speaking at the G20 summit in Indonesia, the UK prime minister said: “I would say to executives to embrace pay restraint at a time like this and make sure they are also looking after all their workers.”
His comments will cause concern in some boardrooms given complaints by executives that British listed companies were already unable to match the pay offered by their global and often private rivals.
Sunak added that he was “sure executives of most companies will be thinking about pay settlements for senior management, for their workers and making sure they are fair. That’s what everyone would expect.”
Chancellor Jeremy Hunt is expected to use the Autumn Statement on Thursday to lift the cap on banker bonuses, according to Whitehall insiders. It is one of the few announcements made by his predecessor Kwasi Kwarteng in September’s mini budget that Hunt is not expected to reverse.
Britain’s new prime minister is one of the wealthiest to ever to hold the office given both his past career as a banker and hedge fund manager and the family fortune of his wife, Akshata Murty, whose father founded IT company Infosys.
A report by PwC last week showed that FTSE 100 CEO pay was at its highest for at least five years after a rise of almost a quarter on average this year — fuelled by higher bonuses — but most companies are paying below inflation increases to their staff.
Sunak said he did not want to see a wage price spiral as “the people who are going to suffer the most are the people on the lowest incomes . . . and we’ll still be having this conversation in a year’s time.”
Policymakers have come under fire for suggesting that workers should accept a painful squeeze on pay in order to bring down inflation at a time when many companies have seen a post-pandemic rise in profits and big bonus payouts to executives.
Andrew Bailey, Bank of England governor, has since argued that companies need to show restraint on executive pay, as much as workers in their wage demands.
Unions argue that inflation has been turbocharged by corporate profiteering at workers’ expense — and that public sector workers in particular cannot be expected to swallow another year of real terms pay cuts, following a decade of austerity.
“The government must see key services as a driver of economic growth, not a drain on the public purse,” said Christina McAnea, general secretary of Unison, the UK’s biggest union.
She and other union leaders representing NHS workers met health secretary Steve Barclay on Tuesday for talks intended to help head off the threat of strikes that could hit hospitals across the UK over the winter.
The prime minister on Tuesday waded into the dispute, criticising demands by nurses for a significant pay increase. Last week, the Royal College of Nursing voted for industrial action and has called for a five per cent pay rise above inflation.
Sunak said he had “enormous gratitude for our nurses” but “what the unions are asking for is a 17 per cent pay rise and I think most people watching will understand that’s unaffordable”.
Executives told the FT that there were sympathies with the situation facing many people in the UK but that pay was a complex issue often linked to historic performance targets.