Many people are struggling to make ends meet as wages fail to keep up with rising prices, while business leaders and those at the top of the financial sector continue to salt away millions in bonus awards. The gap between a corporate elite and everyone else is yawning ever wider. If current trends continue, by 2025 the top 0.1 per cent of earners will take home 10 per cent of national income, and by 2030 Britain will have sunk back to levels of inequality not seen since Victorian times.
It matters that a highly paid elite running our businesses is able to buy a lifestyle that puts them out of the reach of the cares of a normal life. These business leaders can quickly lose touch with the needs of their workforce and with the concerns of their customers. It leads to a lack of trust among the public in big business.
Richard Lambert, the former head of the CBI, warned last year that leaders of big companies risked being treated as "aliens" if they seemed to occupy a different galaxy from the rest of us. He pointed out that, for the first time, an executive job was now a route to independent wealth.
Attempts to link pay to corporate performance have seen awards racing upwards with often little corresponding boost to share prices. Many executives use the pay round as a way of keeping score against rivals. It is often not about the aggregate amount on offer, but about how that compares with others' rewards.
Britain's corporate pay bonanza is unsustainable. Some executives privately admit that the system is broken, but shrug that they cannot change things on their own. It is clearly time to look at what can be done to rein in runaway pay at the top. Otherwise David Cameron's cry of "We're all in this together" will have an even more hollow ring.
Deborah Hargreaves is chairman of the High Pay CommissionReuse content