The Highest Earners Need To Be Very Careful About The R-Word

Chris Bowers is worried that an increasing pay gap may lead to a revolution.

By Chris Bowers

24 Nov 2011

Revolution?

I’ve been mulling over whether using the R-word is a bit melodramatic, or even irresponsible. In recent weeks I’ve increasingly suspected it isn’t, and now with this week’s report by the High Pay Commission, I’m convinced it is legitimate to use it.

It was a friend who came from a background of inherited wealth who said to me many years ago ‘If the landed and rich had had their wits about them and acted responsibly, we’d never have had communism and would have prevented pretty much all the revolutions.’

That chimed with something that has always puzzled me. Isn’t it paradoxical that the parties that represent the rich don’t have the most advanced social policies? Surely if you’re rich, you want to enjoy your wealth, and the last thing you want to do is spend lots of money building walls around your house to keep out the dispossessed and fearing someone who envies your riches will throw a brick at your nice car. So why aren’t the Conservatives pushing truly inclusive social policies?

But what’s all this to do with the R-word? Indeed what R-word am I talking about? The word is ‘revolution’, and I fear we are getting dangerously close to the conditions in which social revolution becomes possible.


Dismiss it as melodramatic if you want – I hope you’re right and I’m wrong, but I think there is major cause for concern.

There is no formula for social revolution. If there were, it would be something like: ‘When the richest class of earners earns more than, say, 40 times what the poorest class earns, then you have the conditions in which people have more to gain by illegal acts that challenge the old order than they have by playing by the existing rules.’

This week’s report from the High Pay Commission confirms what many of us have suspected for some time – that the highest earners are not pulling their weight in national efforts to tackle the debt and deficit. My question is whether they are taking us near the marginal point where the least well-off feel they have more to gain by revolting.

The most conspicuous group of high-earners are the bankers, who seem to have gone back to their ‘entitlement’ mentality despite having, in many cases, been bailed out by the taxpayer in the 2008 crisis. But the problem runs throughout much of the management culture in this country, where salaries are based on assessments of how a person feels valued by their company rather than any need for a certain sum of money to do the job.

There must be a sum beyond which no-one needs any more money. I would put that at about £150,000 a year, though I’d accept it up to £200,000. It will obviously depend on commitments such as the number of children one has, whether any dependents have special needs that involve expense, and more contentious factors like whether it’s a basic entitlement to have private medical insurance and to be able to send your children to private school. But for anyone with four kids or fewer, £200,000 should be ample.

So why is our management culture all about getting salaries that go way beyond anyone’s assessment of what people should need? This is where the most influential group in the economy is missing the point about all of us pulling together. It’s not about some communist view of society, but about recognising that belt-tightening among those earning less than £30,000 is a matter of cutting out essentials, whereas belt-tightening among the top earners is about fractionally less to invest in some off-shore trust.

In many ways the situation cries out for legislation, but it goes beyond that. What we need is a change of attitude among the top earners in this country, whether induced by legislation or enlightened self-interest. When the economy is thriving, people may poke fun at the top earners but there’s very little resentment. But when public services are being cut, and energy and supermarket bills are rising alarmingly, the scope for resenting people on salaries over half a million is massive.

This is why George Osborne should be telling his friends in big business to go easy. He can blame Vince Cable if it helps him, but the message should get through that if the most affluent in society aren’t seen to be seriously pulling their weight, the conditions for social revolution will be enhanced. We had rioting in the summer – count that as a warning that needs to be heeded before the cost to the top earners becomes genuinely and uncomfortably high.