Written by Michael Allen | 01 February 2012
Posted in Comment - Britain

 Photography: Elliott Brown

£2,163,000 – no human being requires such a sum. Many would surely like such a sum, but no person requires it. I would like such a sum – or at least the material benefits such a sum could procure – but I don't think I would like to have it if it came at an expense to others or I didn't feel that I deserved it.

One wonders what factors RBS boss Stephen Hester took into consideration when he decided to decline his £963,000 bonus (that is, on top of his £1.2 million salary). Media pressure undoubtedly played a critical role. The recent journalistic onslaught on high-paid executives is a shining example of the press acting as a counterweight to the government and the market – something the respectable press should be proud of as its sinister tabloid cousin languishes in the dank depths of the Leveson inquiry. Mr. Hester probably decided that he wouldn't live too badly on a mere £1.2 million after all. Even if he had twelve dependent children and two ailing parents in rest homes to support, he could still live in reasonable comfort on that. £963,000 would be a fair price to pay to escape the attacks from the media.

It would be silly to suggest that executives should not receive higher salaries than most. Many of these people have worked hard to get to the top and work harder still in their capacities. Of course, luck and nepotism are often complicit in these cases, but everyone knows that our society is not equal in this respect. My point is that executives should certainly receive substantially higher pay than the average worker, but the pay level should always stand in proportion to the person's contribution to their organisation, and just as importantly, the pay should not be so high as to insult those who struggle to make ends meet every month.

This is why ideas like the introduction of a Living Wage are good. Basic services and working-class jobs are just as vital to the economy as Mr. Hester's job. There is also another interesting similarity between those working in banking and those in these low-status jobs: many are doing it just for the money. Money is far from everything, yet it can increase happiness. If you pay the lady behind the till in Iceland a few pounds more per hour, she will generally be substantially happier, having more time for her family and an improved material quality of life. Paying Mr. Hester a £963,000 bonus, on the other hand, will make him only marginally happier, for with a salary of £1.2 million his material quality of life is already more than sufficient. Dividing the £936,000 between a crowd of Iceland till-ops – by using it to fund a Living Wage – would bring about considerably more happiness and be of much greater benefit to society.

I am by no means advocating some kind of radical communism here. I simply want to suggest that we shouldn't be rewarding those at the top so highly without looking after those at the bottom. A fairer level of remuneration for the working-class will reduce tensions and perhaps produce a genuine respect for those in higher level positions and replace the simmering resentment that can be felt at present.

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