"It is in no one's interest if today's pay rise threatens to become tomorrow's mortgage rise. The worst form of short-termism would be to pay ourselves more today at the cost of fewer jobs tomorrow and lower living standards in the very near future. So wage responsibility is a price worth paying.
"It is moderation for a purpose... This means responsibility, not just on the shop floor but also from Britain's boardrooms outwards - where in the interests of all there must be moderation not excess and where an example should be set."
So what do the people at the sharp end of the Chancellor's message make of it?
Bob Semple, equity strategist at NatWest Markets, said: "All he is doing is talking tough. Labour has been going on about boardroom excess for years but it can't do much about it. Nobody complains when Alan Shearer or Elton John get paid a fortune. If it comes to actually helping to drive a company forward it's another thing. "
Siemens, the German electronics and engineering giant, which has spent more than pounds 1bn on its computer chip plant on Tyneside said that substantial wage increases were often the only way to find the best people. A spokesman said: "You have to compete and pay the right people. At the end of the day the labour market is a free market. There's a finite pool of people and you have to entice them."
Sir Ross Buckland, chief executive of Unigate, the dairy group, who received a 5 per cent increase to pounds 462,000 last year and another 5 per cent increase since then, said: "I think the vast majority of British boardrooms have set a good example with increases not dissimilar to those awarded to most of the workforce.''
Rodney Bickerstaffe, leader of Unison, the country's biggest public service union, said he wanted low-paid employees to see the benefit of the upturn in the economy and the increasing flow of tax into the Exchequer.Reuse content