We're all in it together

From 1929 - predating Cameron's infamous
utterance on austerity by more than 80 years

Local newspapers everywhere publish letters by readers criticising waste by their local councils, and people often become angered if they believe that central government is squandering taxpayers' money. This is all quite reasonable and constitutes a form of accountability. This is not say I believe that every criticism is correct - for example, I profoundly disagree with those who would completely eliminate our foreign aid budget - but the principle of citizens scrutinising expenditure of taxpayers' money, i.e. our money, is sound.

A different attitude tends to prevail when we consider what large private corporations do with their money. Most of us are aware of the seven (or more) figure salaries that are paid to corporate functionaries in boardrooms. We are led to believe that these passengers on the gravy train are among the best and brightest available, and we are told that such talent isn't cheap. As a result, people are considerably less concerned about excessive boardroom pay than they are by, say, the salary paid to a chief executive of a local authority whose remuneration is a fraction by comparison. The difference is that the public sector boss is paid out of our income or council taxes, which we see as ours, but we are conned into accepting unthinkingly that top executives actually create the wealth that provides the salaries and bonuses they receive.

A quick word about bonuses: a long time ago I assumed that they were paid for success. I soon realised by the sight of failing companies that ensured executive bonuses were dished out prior to collapsing, after which jobs, pensions and, if on public sector contracts, a fortune in taxpayers' money would all be lost. Feathering your own nest in this way at others' expense should be illegal.

Successful business leaders do not 'make' money, they acquire it: the money is already there in the economy. The millions paid to business top brass come from all the ordinary, often poor, people who use their services, buy their products, shop in their stores, gamble, attend professional sporting events, so on. By paying excessive salaries, thousands of millions of pounds are removed from the economy and stashed away for whatever purposes the recipients may have in mind. That wealth didn't appear out of nowhere - it was acquired from ordinary people who should feel just as concerned about what happens to their money after they have spent it as they do about their taxes.

Here's an extreme example why it matters. We recently learnt that Denise Coates received a remuneration of £265 million last year from her on-line gambling business, Bet365. It is widely known that gambling is much more prevalent in poorer communities, and it is from them that Ms Coates derives a large proportion of her wealth. There is a moral argument here, but I'll concentrate on the financial.

If we took £264 million from Ms Coates and left her with a mere £1 million to struggle by on for the year, the money thus gained could:

• Create 17,355 minimum wage jobs; or
• Create 9295 average wage jobs.

All from one person's pay packet.

This is because for every £1 million squandered on excessive wages, 65 minimum wage or 35 average wage jobs could have been created. If you then total all the excessive boardroom wages in all the big companies across the entire economy, it quickly becomes clear why, despite being the 5th or 6th richest country in the world, we have

• Rising levels of poverty; 
• An increasingly outdated and crumbling infrastructure; 
• Struggling health, education and social services; and
• A major housing shortage.

Quite simply, the nation's wealth is being syphoned off at an accelerating rate for the benefit of a comparatively small number of individuals. We British people need to challenge the widely accepted myth of 'wealth creation' and scrutinise what happens to our money in the private sector with the same sense of ownership that we rightly have about our taxes.

To put it another way: what would benefit the ordinary people of this country more? One Denise Coates, or nearly ten thousand average wage jobs?

Neville Grundy
ARMS