Business Must Be Fair To Be Trusted And To Succeed

In the past week, we’ve had the neo-Dickensian revelations from Sports Direct and we’ve also had the inexplicable top pay decisions at Sainsbury’s and Royal Mail following on from the obscene proposed payout to WPP’s Martin Sorrell. Add all this to the shameful goings-on at BHS and it’s clearly not been a good time recently for the reputation of big business in the UK.

Sports Direct’s transgressions include dubious moral practices and downright illegal ones. The behaviour at Sainsbury’s is of the more common or garden variety of corporate excess where payment of top management seems divorced from performance. Royal Mail’s approach is sadly reminiscent of so many privatisations where the senior management inherit a business, built up and paid for by the taxpayer over generations, from which they then extract large sums of money with seemingly indecent haste. As for WPP, this really is one of the worst examples of recent times and is the sort of pay deal that has got the Institute of Directors so worried, rightly, about public trust in business.

Balanced against this sort of depressing behaviour we hear that the companies of Yorkshire & Humberside are powering ahead and creating the sorts of jobs that would mystify Sports Direct. We also hear that the co-operative sector is thriving and the top five co-ops are paying more tax than the likes of Amazon, Facebook and Starbucks combined. There are also optimistic noises coming out of the Tees Valley which has been hit hard by the closure of Redcar steelworks. 

The frequency with which corporate excess and miserliness crop up in the media suggests that it’s not just a case of a few bad apples. There’s a lot of businesses out there doing the right thing and a lot doing the precise opposite. The government and the public need to intervene to tilt the balance decisively towards the good and away from the bad and the ugly. In short, we need to make business fair if we are to make the economy serve people rather than the other way round. 

To do this we need a multi-faceted approach including a proper industrial strategy that promotes good businesses and good jobs. We need mandatory pay ratio reporting to monitor and bear down on the pay gaps across the economy and a clear route out of poverty for those on benefits and low incomes. We also need more co-ops, mutuals and employee-owned businesses as well as social enterprises whose more democratic and participatory structures work to curb excessive pay disparities.

The Equality Trust has and will always speak out for these sorts of reforms. By supporting our campaign, you can help make our voice louder. Please, join us!

Bill Kerry, Supporters and Local Groups Manager