by René Lavanchy
NEARLY seven people in ten think that the highest earners should pay a top rate of 50p in the pound income tax, according to a new poll this week.
And in a result suggesting that the recession has turned the public strongly against big pay packages for executives, over half of those polled say that bosses at failed companies such as Northern Rock should pay back their bonuses for the last two years.
The survey, conducted by YouGov for think-tank the Fabian Society, also found strong support for Chancellor Alistair Darling’s promise last year to introduce a 45p top rate of income tax. Seventy-six per cent of respondents supported the move, and nearly half said they strongly supported it.
Sunder Katwala, the Fabian Society’s general secretary, said: “It’s pretty well established that there’s been public support for progressive taxation for some time.
What’s new is the bankers being seen not as important wealth creators but as interested in distributing wealth to themselves.”
Support for the 45p tax showed that it was “ludicrous” to talk of Labour deserting the centre ground, he added.
The poll forms part of an eight-month research project the Fabians have conducted into popular attitudes to inequality. Mr Katwala said the results reflected “increasing scepticism” about whether high earners deserved their pay.
Last month, Andy Hornby, chief executive of failed bank HBOS, announced that he would not be taking his six- or seven-figure payoff as angry shareholders attacked directors for running the bank down and forcing it into a takeover.
Seventy per cent of those surveyed said that ordinary employees should sit on remuneration committees that decide executive pay, and 56 per cent believed bonuses at failed firms should be paid back.
Mr Katwala said: “What people really feel is indefensible is where there are different rules in institutions. What’s going on in in these remuneration committees which don’t reflect fairness or reward, the bonus culture which doesn’t reflect success or failure? What offends people is the arbitrary nature.”
He added that while the poll was not a prescription for how Labour should legislate, it could unveil bolder policies such as tax relief for pensions and a voluntary code on boardroom pay, which would be required to win government contracts.
The survey comes as the Association of British Insurers warned bosses that executive pay had become a “very hot issue” for the public, and that companies face state intervention if they do not make their pay more transparent and fair. Peter Montagnon, the ABI’s head of investment affairs, said: “The reaction will be vicious if there are abuses in the current recession. That will lead to pressure for direct regulation”.
