Corbyn Retreats From U.K. Pay Cap as Economists Slam Proposal

  • Labour now examining 20-1 pay ratios for state contractors
  • Blanchflower attacks original proposal as ‘completely idiotic’

The leader of Britain’s main opposition Labour Party retreated from a proposal to impose a cap on salaries within hours of suggesting it as economists branded the plan unworkable.

Jeremy Corbyn told BBC Radio early Tuesday that he ”would like there to be some kind of high earnings cap.” While he said he couldn’t “put a figure on it,” he told Sky News that it would be “somewhat higher” than his own 138,000-pound ($168,000) salary. “Either you do a cap or you look at the levels of disparity within organizations,” he told BBC Television later that morning.

By 4 p.m., after the Adam Smith Institute condemned the policy as “bananas” and former Labour adviser David Blanchflower called it a “completely idiotic idea,” Corbyn suggested that only companies that limit the pay of their highest-paid executives to no more than 20 times that of the lowest-paid workers should be eligible for government contracts. This was the subject of a consultation, and could even be imposed on a “voluntary basis,” he said in answer to questions after a speech in Peterborough, eastern England.

“It cannot be right that companies are getting public money that can be creamed off by a few at the top,” he said, adding Labour was committed to changing “fat cat Britain.”

As well as introducing pay ratios, Corbyn said Labour was considering introducing a tax on the “highest 5 percent or 1 percent of incomes.”

Brexit Plan

Corbyn, whose party is trailing Prime Minister Theresa May’s Conservatives by more than 10 percentage points in opinion polls, had sought to set out his party’s plan for Brexit, including pledging support for controls on immigration from the European Union as he seeks to draw both the pro-Brexit and pro-EU voters he needs to win power.

Immigration, he stressed Tuesday, has been beneficial to many sectors of the economy. Labour will not focus on numbers, but on curbing practices that exploited migrants and encouraged low pay to bring numbers down -— a policy first floated in his conference speech in September.

“Labour is not wedded to freedom of movement for EU citizens as a point of principle, but I don’t want that to be misinterpreted, nor do we rule it out,” he said.

Corbyn criticized May for failing to present a plan for taking Britain out of the bloc, saying “the government is in disarray” over Brexit and stressing that keeping a good trading relationship with Europe is key.

While saying that Britain must retain as full as possible access to the EU single market in goods and services after leaving the bloc, Corbyn also used his speech to demand protections for workers and the funding for the National Health Service that was promised by Brexit campaigners.

Corbyn is seeking to appeal to both sides in the Brexit debate in the face of divisions among his party’s traditional supporters on the issue. Many Labour lawmakers outside London represent districts that voted to leave the bloc, but the party also dominates politics in the strongly pro-“Remain” capital. Both camps fear losing their seats if the party gets its Brexit policy wrong.

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