Public sector chiefs will have their salaries slashed and linked to the earnings of the lowest-paid workers in their organisations, under a Conservative government.
The pledge by the Tory leader David Cameron came as part of a promise to tackle “unfair pay” in the public sector.
Writing in the Guardian, Cameron said he would establish a fair pay review to ensure senior public sector managers could not be paid more than 20 times what the lowest-paid worker in their organisation received.
The policy could see up to 200 public sector executives facing pay cuts.
Ed Richards, chief executive of Ofcom, would be one of the bosses to see his pay reduced. Richards’ £392,056 salary is 22 times higher than the estimated lowest full-time salary in his quango, which is £18,000.
Cameron said: “We are already committed to pay transparency and accountability, but I think it is time to go further. The government plays an important role in helping to shape society, so if we win the election we will set up a fair pay review to investigate pay inequality in the public sector.”
The Conservative policy would follow the example of private sector companies, like John Lewis, by implementing a “pay multiple” to ensure fairer salaries, which in time would “improve cohesion and morale”.
Cameron said: “We will ask the [fair pay] review to consider how to introduce a pay multiple so that no public sector worker can earn over 20 times more than the lowest-paid person in their organisation. There are many complex questions that the review will need to address, but I am confident it will not only help tackle unfair pay policies, it will improve cohesion and morale in the public sector too.”
Figures from the Taxpayers’ Alliance indicate that more than 200 public sector bosses could face a salary cut under the proposals. The Alliance said 223 public sector executives earned more than £211,000 – 20 times more than the lowest annual salary in the public sector of £10,556.
Cameron also supported the £7.60 “living wage” introduced by Boris Johnson, the mayor of London. He said he would be interested in introducing this in Whitehall.
But the government has already agreed to introduce a living wage for Whitehall staff, which would be funded by pay restraint for top earners. The policy would not apply in the NHS or to quangos, but would cover thousands of civil servants.