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10 January 2017

Jeremy Corbyn’s maximum wage law is the populism that he promised all along

The Labour leader first declared his support for an earnings cap in 2015. Why wasn't it repeated?

By George Eaton

Even before Jeremy Corbyn has delivered his Brexit speech, he’s managed to backtrack on it. The early extracts revealed that he is “not wedded” to EU free movement as “a point of principle” – an unmistakable shift from his previous stance. But in an interview with Good Morning Britain, Corbyn clarified that this was “not a sea change at all” and that, unlike Theresa May, he would prioritise single market access over controlling immigration. The Labour leader’s position remains that tougher labour market regulation “will” have a downward effect on numbers, not that there “should” be one.

But Corbyn’s equivocations on immigration have been eclipsed by his support for a maximum wage. Asked on the Today programme whether he favoured a limit on salaries, Corbyn said: “I would like there to be some kind of high earnings cap, quite honestly.” He added that he “can’t put a figure on it” but emphasised: “I would like to see a maximum earnings limit, quite honestly, because I think that would be a fairer thing to do. Because we cannot set ourselves up as being a grossly unequal, bargain basement economy on the shores of Europe. We have to be something that is more egalitarian, gives real opportunities to everybody and properly funds our public services.”

Though many thought otherwise, the policy is not a new one. The Labour leader first declared his support for a maximum wage during his 2015 leadership campaign. He told the Herald: “Why is it that bankers on massive salaries require bonuses to work while street-cleaners require threats to make them work? … There ought to be a maximum wage. The levels of inequality in Britain are getting worse.

But that so many assumed the policy was new was revealing in itself. Despite his obvious commitment to it, Corbyn has said little about the measure since 2015. It was often only during his leadership campaigns that many of his pledges were repeatedly aired. When journalists are tired of hearing something, it is said, the public hear it for the first time. But too often, not even reporters have been aware of Corbyn’s stances.

The extracts of his speech, for instance, included no reference to the maximum wage law. Yet it is precisely the kind of measure that Corbyn’s “populist” relaunch should have at its heart. It is distinctive, easy to explain and true to the Labour leader’s values. Though polling by YouGov found that 44 per cent of voters opposed a maximum wage, 39 per cent supported one (a figure substantially higher than Labour’s poll rating of 28 per cent). It is also most popular among the over-65s, a demographic that Labour badly needs to improve its support among. 

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The policy is being denounced by economists (who warn that it will dramatically reduce tax revenue), by Ukip, which branded it “the politics of envy”, and even by the Greens, who called it “an unproven, blunt instrument”. But such opposition gives Corbyn the distinctiveness that he desperately needs. As Labour struggles to bridge the divide beween Remain and Leave supporters, its economic message must come to the fore. In supporting a maximum wage, Corbyn is simply offering the populism that he promised all along.