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Corbyn backs cap on earnings to reduce inequality

Jeremy Corbyn has backed a cap on high earnings as a way to reduce income inequality, as the Labour leader makes a fresh pitch to UK voters.

Mr Corbyn told the BBC on Tuesday: “I would like there to be some kind of high earnings cap, quite honestly.”

The Labour leader described the UK as a bargain basement economy on the shores of Europe. “We have the worst level of income disparity of most of the OECD countries,” he said. “It’s getting worse and corporate taxation is a part of it. If we want to live in a more egalitarian society and fund our public services we cannot go on creating worse levels of inequality”.

However, Mr Corbyn was reluctant to be drawn on details of an earnings cap: “I can’t put a figure on it and I don’t want to.” Asked if the cap would be around his own salary of £138,000 Mr Corbyn told Sky News in a separate interview: “I think it would be somewhat higher than that.”

He declined to say what level he would set but commented that the salaries paid to some footballers, and some top executives were “simply ridiculous . . . why would someone need to earn more than £50m a year?”

The Labour leader said if top executives did have their salaries capped “they would be having slightly less of their enormous pay levels, which would then be available for investment and development of their companies or indeed of society as a whole”.

Stewart Wood, former adviser to Ed Miliband, said the Labour leader was right to worry about the corrosive effect of “runaway pay” for the richest in society but added: “Maximum wage laws are unworkable.”

Danny Blanchflower, former economics adviser to Mr Corbyn, said the idea was “idiotic” because companies could get around it by paying staff in shares. “If I was still an adviser I would have told him it’s a totally idiotic unworkable idea,” he said.

Paul Nuttall, leader of the UK Independence party, said he did not like the idea of an earnings cap. “I don’t really like practising the politics of envy and I think he is specifically talking about the City,” he said.

The Labour leader’s remarks threaten to overshadow a key speech on the party’s approach to Brexit later on Tuesday that is expected to signal a shift towards curbs on immigration.

Mr Corbyn is expected to argue that Britain can be “better off” after Brexit and Labour is “not wedded to freedom of movement for EU citizens” as a point of principle.

He has been a doughty defender of immigration and his spokesman said only a few weeks ago that Mr Corbyn did not want to curb the number of people coming into the UK. Yet he appears to have bowed to pressure from many of his MPs and Len McCluskey, leader of Unite the Union, who believe Labour’s backing for free movement has cost it many votes in recent years, particularly to Ukip.

Britain cannot afford to lose full access to European markets, Mr Corbyn will say, but negotiations will have to include changes to migration rules. He will add: “Labour supports fair rules and reasonably managed migration as part of the post-Brexit relationship with the EU.”

He will argue, however, that cutting migration can be achieved by strengthening workplace protections, banning exclusive advertising of jobs abroad and closing down cheap-labour loopholes rather than setting lower immigration targets.

Tim Farron, leader of the Lib Dems, said the comments suggest Mr Corbyn had become “cheerleader-in-chief for the Conservative Brexit government”. Mr Farron’s party is hoping to use an unambiguous anti-Brexit message to peel away Remain-voting supporters from Labour, which remains divided over the European question.

Speaking in Peterborough, which voted Out by an estimated 61 to 39 per cent, Mr Corbyn will accuse the government of offering “no answers” about its plans to leave the EU. “Not since the second world war has Britain’s ruling elite so recklessly put the country in such an exposed position without a plan,” he will say.

Yet Mr Corbyn himself has been accused of an ambiguous approach to Brexit, having been a strong Eurosceptic as a backbencher. He backed the Remain camp in the spring but was accused by some colleagues of trying to sabotage the campaign with his lacklustre interventions.

The website Politico reported on Monday that Mr Corbyn’s team was planning a more “aggressive, insurgent” media strategy along the lines of Donald Trump’s hostile approach during the US election.

Instead of rebutting negative stories, the Labour leadership will instead try to fight fire with fire by highlighting them on social media and trying to emphasise any perceived bias. “We’re going to use the levity of the media against them,” said one aide. “We have been in a constant defensive mode and that just hasn’t worked.”

In Tuesday’s speech, Mr Corbyn will say Labour will insist on a Brexit that works “not just for City interests, but in the interests of us all”.

Acknowledging the contentious claim from Vote Leave that Brexit could give the NHS an extra £350m a week, he will say a Labour government would end the “underfunding and privatisation” of healthcare.

“This government could have given the NHS the funding it needs but it has chosen not to,” he will say, adding that the Conservatives have given huge tax cuts to the richest in society instead.

Mr Corbyn will also argue that leaving the EU will make it easier to conduct a proper industrial strategy because Britain will no longer be subjected to EU state-aid rules. “EU rules can also be a block on the action that’s needed to support our economy, decent jobs and living standards,” he will say.

“Labour will use state-aid powers in a drive to build a new economy, based on new technology and the green industries of the future.”

Mr Corbyn will also pledge that a future Labour government would refuse to give contracts to any company that fails to pay tax in the UK or train young people.

Additional reporting by Kate Allen and John Murray Brown

Via FT