Labour's obsession with equality will make us all poorer

Telegraph

22-06-2025

We've all had that thought: 'Why is that lazy b------ paid more than me? He seems to spend most of his day browsing Amazon and eBay, then dashes home at the earliest possible moment while I toil on way beyond my contracted hours.'
Perhaps even more aggravating than the general feeling that one is not being justly remunerated for one's labour is the feeling that someone else is undeservedly being more richly rewarded.
These petty resentments may become much worse under proposals that Labour is considering.
Taking a break from wrecking our schools and taxing aspirational parents, Education Secretary Bridget Phillipson, wearing her other hat as Minister for Women and Equalities, is directing the Office for Equality and Opportunity to come up with plans to tackle pay discrimination.
These could include forcing employers to tell their workers how much their colleagues earn. Pay transparency, or so the argument goes, is the elixir to eliminate unfairness in the workplace.
The reality is likely to be rather different. Equal pay for equal work may indeed be a worthy cause, but who is to judge what endeavours are equivalent? Basing pay simply on seniority does not acknowledge the different contributions different employees make.
In recent decades, the trend has been in the opposite direction. We have been steadily eroding pay transparency in a raft of professions. While the armed forces, the police and to a lesser extent, the civil service, may still have fairly rigid pay grades, they have been eroded in academia and school teaching.
Both still have pay spines which apply broadly, but as people are promoted, this becomes much less true. Academy schools, whose freedoms Phillipson is fast eroding, have much more flexibility as to how to reward exceptional staff – professorial pay is now largely a matter of negotiation.
Pay differentials in both teaching and academia have vastly increased as a result. This is not happening due to education providers being malignly unfair, but rather because they feel it necessary to attract and retain the best.
With Labour's obsession with equality, Phillipson may well believe it is her duty to ensure fairness in the workplace. But greater transparency is likely to have unintended consequences.
In thousands of whispered conversations, complaining about what colleagues are paid is a quintessential British, indeed probably global, office pursuit. Nothing is less conducive to office harmony – and indeed less motivating – than someone's undeserved annual salary leaking out.
If so-and-so is receiving X, why am I only getting Y? These plans would institutionalise these exasperations and amplify them to previously unknown levels. The UK is facing a productivity crisis, and it is hard to think of anything better designed to worsen it. It would make workplaces across Britain less contented, more antagonistic environments.
Pay transparency would also represent a massive and unprecedented invasion of privacy. In certain jobs, especially those paid from taxpayers' money, it is absolutely right that salaries are made public. It is appropriate that we all know that MPs are on £93,904, a London police sergeant receives between £51,408 and £53,943, or that a lieutenant colonel is paid between £92,520 and £106,955.
It is also right that charities need to declare how many of their staff receive over £60,000, and that they have to give pay bands for higher-paid employees, or that floated companies need to declare directors' pay. Donors and shareholders should have access to this information.
In all these instances, those applying for these roles are fully aware that their pay will be a matter of public record. But this is not the case with the vast majority of jobs. Our fairness commissars would in fact be bringing into life myriad new unfairnesses.
Those of us who have entered into a role on the basis that only ourselves, our employer and HMRC are entitled to know our remuneration, would have that understanding ripped up by diktat.
Greater transparency in pay is more likely not to result in a pay bonanza, but rather for employers to be more reluctant to offer raises, in case others then also demand a similar increase.
There is a more profound flaw in the demands for openness. They assume that fairness is something that is achievable or indeed desirable. But it is in fact a hollow myth. Is it fair that the median pay of a FTSE 100 chief executive (their pay is of course already public) is 113 times that of UK median pay? Almost certainly not.
But then very little is fair. It is not fair that some people are much more intelligent than others; nor is it fair that some are beautiful and others are the opposite; nor is it fair that some are born into carefree luxury and others into abject, miserable poverty.
But the cure for solving these unfairnesses – an overbearing state that intrudes into every aspect of our lives – would be a dystopian nightmare.
Fairness may be the promised land, but we will never reach it. Let us give up on this chimera and carry on with our lives. We might all end up happier.