“What on earth is the point of having an accountant if he’s within the law?”
Edina Monsoon, Absolutely Fabulous
It’s not often you actually hear a sharp intake of breath, let alone a collective one. Mulling over the news of the last week this weekend, I was reminded of the last time I encountered this phenomena.
The connection? The thorny old issues of money, and transparency.
I don’t think a collective sharp intake of breath was heard around the world at the news that the rich and powerful are able to do things with their money the rest of us can’t, and do it within the law, as so oft repeated (but that, nevertheless, result in them paying less tax than they might do otherwise).
This we already knew. No surprises there.
The How, and the Where, and the Whom, delivered out of the hat from the Panama Papers, has, however, been significantly more revelatory. So much so, in fact, that now British Prime Minister David Cameron is publishing his tax returns and outlining what the weekend shop in the Chipping Norton branch of Waitrose comes to (has it come to that yet? I suspect it might).
This is the age of transparency. Don’t they know there’s no where to hide?
It’s perfectly right, of course, that we know what we pay our public servants. It’s perfectly right to investigate whether what they do with their finances is within the law (the Expenses scandal is very recent history – we’d be fools to think some of these old dogs haven’t learned new tricks to get something for nothing).
But should everyone in public life have their finances put under the microscope? Cameron is, now, arguing for the PM and Chancellor, as the top-billed string holders of the public purse, to always publish their tax returns, while Labour Leader Jeremy Corbyn is suggesting everyone in public life should do so (with others chiming in that this is the only way to restore the public’s trust in our institutions).
This is, certainly, a new twist in the cultural politics of Britain. To talk about money, in any context, is a very un-British thing to do (it’s ingrained in our class-system that talking about money is vulgar, and one never asks someone how much they earn, it’s not the done thing).
But times are changing. This is the age of transparency, after all, and, wherever we turn, there seems to be a 1% versus 99% divide, a deepening sense of the inequalities of options available to the ‘haves’ and what’s on offer for the ‘have-nots’ – not just an entirely different pay scale, but an entirely different rule book too.
Add into the mix the gender pay gap and the ‘Shopfloor-to-C-suite‘ pay gap (and, lest we forget, how the banks lost all the money and our calcifying mistrust in both figures of, and institutions in, authority), and it’s no wonder we’re obsessed with who earns what and why.
And it’s not just those in public office whose bank accounts we want to delve into. Public life isn’t just the preserve of those that work in the public sector. The business leaders of private enterprises are also subject to pay check scrutiny.
Last week, Co-operative Group CEO Richard Pennycook announced his pay reduction, stating his job had gotten easier since the peak of the Co-op crisis (and implying that, by taking a pay cut, he wants a bit of his life back in exchange).
It’s a smart strategy from that point of view (he’s a smart guy), but, for me, it does beg the question – are you being paid by the hour, or for the quality of your thinking? If you’ve fixed the crisis, shouldn’t you have as much incentive to be inventive, to build, rather than fix?
It begs the question, what are we being paid for? What is anyone, whether at the top of the tree or just entering the jungle, being paid for? Always followed by “And is that fair?”
Transparency, surely, is the way to find out.
There was a lot of fluster about this on the BBC’s The Daily Politics (Monday 11th April) – it’s an issue that heats a lot of people up – with Conservative MP Charles Walker stating that this was the thin end of the wedge, and that, before long, if we continue down this path, constituents – everybody, in other words – will have to share with the wider world what they earn.
It’s already happening. Which brings me to that collective sharp intake of breath.
A couple of months ago, at a workshop on employer branding, the issue of employee remuneration and reward came up, and one of the participants took us to a US tech company website where, in three clicks, you could access a spreadsheet of the salaries for everyone in the company.
It was when this spreadsheet popped up on the screen that the audience, literally, sucked the oxygen out of the room.
The sheer nakedness of it was, clearly, startling.
The response was just as hot and flustered as it was on The Daily Politics today, too. The over-arching, perhaps very British, sentiment was, this was, indeed, a bridge too far. An invasion of privacy. And, potentially, a workplace-politics hot potato.
The company doing this don’t see it that way. It’s all out in the open. Consistent. Explicable. If you’ve nothing to hide, why hide it?
I kind of warm to it, in a way, in principle. I like the honesty and straight-forwardness of it. And the company employees signed up for this. They think it’s a good thing, so why not? Having said that, I still think I’d have been happier if this information was only accessible internally.
If I’m a manager and the people I manage know what I earn, and I think I’m worth that, and can justify that, I’m happy to talk about it – but I’m not sure I want my next-door neighbour knowing what I make.
Because that’s the thing about being naked: people will judge.
Hard enough with colleagues if you always seem to be floating off early or cancelling meetings to question whether you’re pulling your weight (and therefore earning your dough), but, in our private lives (do we still have those?), the people around us are also likely to judge our spending.
When your siblings realise how much you earn, they might not think the cheap, plasticky toys you buys your nieces and nephews really cut it.
When your children know how much you earn, giving up the argument for the new device, Disneyland or the designer clobber they desire may be a harder battle (and just think of all the ‘my parents earn more than your parents’ one-upmanship that can play out on the playground).
And when your neighbours realise how much you earn, they might suddenly think that new bit of fence panel that’s needed between you should be your financial call rather than theirs.
Even worse would be the pity of those who thought you earned more, who suddenly start picking up the coffees or suggesting cheaper venues to go out to eat.
This debate has only just started, and will widen, inevitably.
Will knowing more make us trust more?
I’m not sure, actually. The bottom line, for anybody, is, if you’re doing dodgy things with your money, that ain’t going to show up on your tax return anyway, so this rush to publication of tax returns might not be the trust panacea people are hoping for.
Most people in this country are PAYE – they don’t do tax returns, they don’t have accountants – but I think we all expect those who do to do everything they can to avoid paying more tax and, most of us, if we’re really honest, and were able to, would do the same – hopefully, still with an intent to do it all within the law (although I think, if we’re really, really honest, a lot would share Edina’s sentiment too).