Pay gap from bosses to staff to widen - think tank

The gap between the pay of company executives and other workers is set to widen this year after falling during the height of the Covid epidemic, according to research by a think tank.

The median pay gap between bosses and employees in the UK's top 350 companies fell last year as a result of cuts to executive pay, according to the High Pay Centre.

The gap will widen again in 2022.

The highest and lowest pay ratios were found in retail and media.

Bringing some fairness back to the system was called for by unions.

The director of the High Pay Centre said that the think tank's report indicated that companies were sensitive to the need to treat workers fairly and reduce pay inequalities.

As the Covid-19 emergency hopefully reduces, it would be a shame if the spirit of solidarity it generated fades away.

With the dire outlook for the UK economy, how we share existing resource will become increasingly important.

The rising cost of living is hitting households hard, with food, fuel and energy prices all biting into budgets.

The war in Ukraine has led to further increases in prices and wages are not keeping up.

The rate of inflation in the UK jumped to 9% in the 12 months to April, up from 7% in March, and is expected to rise further by the end of the year.

Andrew Bailey, the Governor of the Bank of England, has previously told workers not to ask for big pay rises in order to stop inflation.

Major employers have a key role to play in balancing their pay awards so that high, middle and low earner are paid fairly and proportionately, according to Mr Hildyard.

The average pay ratio for the chief executive of the 69 companies that disclosed it was 63:1, almost double the ratio for the same group of companies.

The previous narrowing of the pay gap during the height of the Pandemic showed that change is possible.

As inflation starts to bite, it is more important than ever that companies do the right thing and pay is distributed fairly.

One area where we don't want to see a return to normal is when pay ratios increase year-on-year. Evidence from a number of companies shows pay at the top is unlikely.

Mr Haq said wage growth for those on lower incomes would be critical to ensure that millions can weather the cost-of-living crisis.

Emily Fielder, head of communications at the Adam Smith Institute, said that getting involved would do little to increase workers' wages and benefits to shareholders.

She claimed that research had shown that bosses of big firms have a real impact on a company's performance.

She said that the UK should be adopting policies which will get the economy growing again, rather than doing a PR exercise in the politics of envy.

The average pay for a chief executive in the UK in 2020 was 2.69m, according to the most recent analysis by the High Pay Centre.

The figure was 86 times the average full-time UK worker but was a drop from the previous year.

Pay inequality has gone too far according to the TUC general secretary.

Even for the best-performing executives, pay can be out of proportion compared to hard-working staff.

It is time we had maximum pay ratios.