British opposition leader Jeremy Corbyn has warned the country’s big companies over what he calls unfair pay.
Speaking at a socialist conference in London, Corbyn said a Labour government could ban companies from distributing dividends if they fail to pay workers the living wage.
“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,” Labour Party leader said on Saturday.
According to a recent study by accountancy firm KPMG, nearly six million workers in the UK are paid less than the living wage, which is currently £7.85 an hour and £9.15 in London.
Corbyn also called for “pay ratios” to help tackle pay inequality, arguing too much of the proceeds of growing company profits benefit the wealthiest.
He said Britain’s pay inequality hampers the country’s economic growth.
“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.
The controversial comments have triggered a backlash from the Confederation of British Industry (CBI), the UK’s leading employers’ group. CBI chief of staff has slammed the proposal as 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, said in a statement.