By Joe Mellor, Deputy Editor
Jeremy Corbyn has taken a tough stance against businesses who pay dividends to shareholders, but don’t pay their workers the living wage at the same time.
He said a Labour Government could ban companies carrying out this practice, if they were elected to form a Government. Corbyn believes that too much profit from the UK economy is passed to the upper echelons of society and not to the majority of workers. He wants to “institutionalise fairness” across Britain.
The Labour Leader was speaking in front of the Fabian Society, a left-of-centre think tank, when he said:”Only profitable employers will be paying dividends; if they depend on cheap labour for those profits then I think there is a question over whether that is a business model to which we should be turning a blind eye. A more equal society is not only fairer, it does better in terms of economic stability and wealth creation.”
The Labour leader also attacked the Conservatives, he said they were: “Running the state into the ground for ideological reasons. Their concept of fairness is of a very different order to ours, fairness for only a few is not fairness, but privilege.”
Inevitably there was immediate backlash from the business and political worlds. Liberal Democrat leader Tim Farron said Mr Corbyn “seems committed on ripping apart our business sector in pursuit of an egalitarian fantasy”. A Conservative Party spokesman called Labour a “clear threat to our economic security”.
CBI chief of staff Matthew Fell said: “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.” They would not support any Government policy that aimed to curtail dividend payments.
Currently around six million workers in the UK are paid under the living wage, which the Living Wage Foundation have benchmarked as £8.25 an hour outside London and £9.40 in the capital. However, the Conservative Government has launched a compulsory National Living Wage of £7.20 an hour for over 25s, which begins in April. The Tories hope the living wage will rise to £9 an hour by 2020.
During the speech Corbyn again mentioned he plans to renationalise the railways, which he believes will bring down fares.
Mr Corbyn said party members and supporters would decide whether his proposals should be adopted. He said: “Our… membership has doubled since that [general election] defeat in May; our party is in a process of regenerating – a difficult process of adjustment for us all at times, but a huge opportunity to breathe life into all sections of the party and draw on the collective wisdom of all.”