LONDON (Reuters) - British opposition leader Jeremy Corbyn said on Saturday he would stop big companies from distributing dividends unless they paid their workers the living wage as part of his proposals to promote fairer working conditions.
Corbyn, a socialist who won control of the Labour Party in September, said too much of the proceeds of growing company profits benefit the wealthiest and called for “pay ratios” to be introduced to help tackle income inequality.
“Only profitable employers will be paying dividends. If they depend on cheap labour for those profits then I think there’s a question over whether that’s a business model to which we should be turning a blind eye,” Corbyn told a socialist conference in London, his first major speech of the year.
Britain has already announced a compulsory ‘national living wage’ of at least 7.20 pounds ($10.26) an hour for people aged over 25 in April, rising to around 9.35 pounds an hour by 2020.
Corbyn’s proposals were criticised by a leading employers’ group, the Confederation of British Industry (CBI), which said it did not support his idea of intervening in company wages.
“The idea of politicians stepping into the relationship between a private company and its shareholders would be a significant intervention, and not one that we would support,” Matthew Fell, CBI chief of staff, added in a statement.
Corbyn, whose election was seen as a major shift back to the political left for the Labour Party, also proposed maximum “pay ratios” between the highest and lowest salaries within companies.
He said Britain’s pay inequality was only second to the United States among the Group of Seven (G7) economic powers.
“Not only is this unfair, it actually holds back growth. A more equal society is not only fairer, it does better in terms of economic stability and wealth creation,” he added.
Corbyn’s leadership has split Labour lawmakers between his left-wing allies and moderates, some of whom have questioned his ability to lead the party to victory in a 2020 election.
($1 = 0.7015 pounds)
Reporting by Li-mei Hoang; Editing by Helen Popper