Of course our City fat cats love the EU – it’s why they earn so much

Of course our City fat cats love the EU – it’s why they earn so much, by Boris Johnson.

At last year’s Tory Party conference I drew attention to a worrying statistic about the way our society is changing. It is the number of times the salary of the average FTSE100 top executive exceeds that of the average – the average – employee in that company. This multiple appears to be taking off, at an extraordinary, inexplicable and frankly nostril-wrinkling rate.

Plato said no one should earn more than five times anyone else. Well, Plato would have been amazed by the growth in corporate inequality today. In 1980 the multiple was 25. By 1998 it had risen to 47. After 10 years of Tony Blair and Peter Mandelson – and their “intensely relaxed” attitude to getting “filthy rich” – the top executives of big UK firms were earning 120 times the average pay of the shop floor. Last year it was 130 times.

This year – cue a fusillade of champagne corks – the fat cats have broken through the magic 150 barrier.


No doubt they will tell us, as ever, that this is the “going rate in the market”. But I notice one other point about these FTSE100 men: that they are only too happy to parade through Downing Street and declare their undying devotion to the EU. They happily sign letters to the papers, explaining how vital it is that we Remain. They must think that the EU is good for their business.

They like uncontrolled immigration, because it helps to keep wages down at the bottom end and so to control costs, and therefore to ensure that there is even more dosh for those at the top.

Then there is a more insidious reason – that the whole EU system of regulation is so remote and opaque that they are able to use it to their advantage, to maintain their oligarchic position and, by keeping out competition, to push their pay packets even higher.

 The vital take home message:

In their brilliant book Why Nations Fail, Daron Acemoglu and James A Robinson explain how transparent political institutions are essential for innovation and economic growth. They make the distinction between “inclusive” societies, where people feel involved in their democracies and their economies, and “extractive” societies, where the system is increasingly gamed by an elite, for their own financial advantage.

The EU is starting to take on some of the features of an “extractive” society. It is dominated by a group of powerful international civil servants, lobbyists and business people.

hat-tip Stephen Neil