SCOTTISH Tory leader Ruth Davidson has backed calls for companies to publish pay ratios showing how much senior bosses receive in comparison to their workers.
She also argued chief executives’ incomes should be linked to their company’s performance and employees should sit on remuneration committees.
I don’t really think people resent the fact that a chief executive gets paid well or is the highest earner in an organisation.Ruth Davidson
Her comments came in a speech to the Joseph Rowntree Foundation in London, in which she said a new Conservative vision should show how society and government can work together to support people in poverty.
Ms Davidson, who is standing for Holyrood in Edinburgh Central, said the Tory manifesto for the May election would include more free childcare for one and two-year-olds from the poorest backgrounds and introduction of a graduate contribution to replace free university tuition, using the money to fund bursaries for poorer students and reverse cuts in further education colleges.
She distanced herself from the “easy simplicities of the past” which painted state action as the enemy of progress and claimed there was a growing interest among Conservatives in how problems like poverty could be dealt with “in a more social, a more rounded way”.
She said: “We believe that, together, our social institutions – the family, community and – yes – the government – can help to create a more balanced and equal society.”
She said the government should consider a proposal from the Chartered institute of Personnel and Development for companies to ensure that reward packages are more aligned to financial and non-financial performance – “not just based on profit margins – but also on how engaged employees are, and how workforce development is improved; publishing the pay gap, having employees on the remuneration committee.”
She added: “I don’t really think people resent the fact that a chief executive gets paid well or is the highest earner in an organisation.
“I think they do resent it when they see CEOs cashing in hundreds of thousands in the bank no matter whether the company they run is going up in the markets or going down the pan. I think they resent it when record bonuses are paid to the boardroom, when members of the workforce are laid off or facing a pay freeze.”
Ms Davidson said she wanted to address inequality at an earlier stage than the Scottish Government’s plans to double free childcare for all three and four-year-olds.
“Given the gap that opens up among children from poor and wealthy homes before the age of three, we think action is required earlier,” she said.
“So, in our manifesto for the Scottish election we will argue that instead of extending that provision across the board for three and four-year-olds, we should provide more high-quality childcare for more one and two-year-olds, starting with those in disadvantaged homes. We also believe more funding will be required to train up a more highly-qualified professional workforce to carry out that childcare.”
She also claimed the SNP’s abolition of university tuition fees had led to funding cuts for further education, with a reduction in places. I would bring in a graduate contribution – no upfront fees and not anywhere near as high as in England,” she said. “I would use those funds to back bursaries for poorer students and I would reverse the SNP cuts on further education colleges.”