Steve Hilton: Pay bankers the same as civil servants

Kamal Ahmed
Business editor
@bbckamalon Twitter

Published
comments
Comments
media captionSteve Hilton says banking bosses should be paid no more than people at the top of the civil service.

He was often lightly teased for his habit of wandering around 10 Downing Street in socks, jeans and a t-shirt, but Steve Hilton was the man widely credited with bringing plenty of fresh air to the stuffy world of Whitehall.

Studiously anti-establishment, he left the job of Prime Minister's director of strategy in 2012 and now works in suitably laid back California.

His wife, Rachel Whetstone, has just taken over as the director of communications and public policy at Uber after holding a similar role at Google.

Mr Hilton's company, Crowdpac, collects data on politicians in the US to help people fathom where they stand "on the big issues".

It is, Crowdpac says, nothing less than the "new politics".

'Obscene' amounts of money

Mr Hilton is in the UK to talk about his new book, More Human, about what he says is the untrammelled growth of a political, business and media elite that he argues locks the ordinary voter out of the process of decision making.

And that leaves the public without access to the levers of power. And very frustrated, particularly when they see what he describes as the "obscene" amounts of money paid to people at the top of businesses.

If you take the role of business in society, this frustration is dangerous, Mr Hilton argues, as it leads to an "anti-business" agenda.

"We should all be pro-business because it is in all our interests that business succeeds," he tells me.

"The question is what kind of business do we want to see?

"When you see the behaviour of some of the big businesses that reward their bosses excessively while screwing their suppliers and exploiting their customers and giving the kind of service that drives people mad.

"The kind of businesses that end up with those bad effects are businesses that feel they are completely unaccountable, they don't face proper competition, they try and advance their agendas not through designing better products and services for people but by using lobbying and lawyers and access to the levers of power.

"These businesses have in effect become private sector bureaucracies. Not like the risk taking entrepreneurial businesses that we should all want to see."

'Aggressive action' required

Mr Hilton's particular ire is reserved for Britain's largest banks.

"The banks are a perfect example of the problem. You have a very small number of big companies with a global impact that have become totally unaccountable.

"What you saw after the financial crash was the same people who worked in the banks then coming into the government to advise [on] how to respond to the crash.

"So it is no wonder that the response to the crash missed any opportunity to reform this sector, to do anything serious about introducing any element of competition.

"It is a really good example of the way that the levers of power in the economy in certain sectors have been grasped by a tiny number of insiders. We need really aggressive action to deal with this."

Radical proposal

And here he proposes a policy prescription that is certainly radical.

For any business that relies on the implicit backstop of state funding should they fail - which he says the largest banks do - then the top executives should be paid no more than the upper echelons of the civil service.

It is an idea was first floated by Nasim Taleb, the author of The Black Swan, and would mean multi-million pound pay packages being reduced to between £100,000 and £200,000.

"If you are a company that requires bailing out should you go wrong, then you should be considered part of the public sector and the pay of your executives should be capped at the same levels as the civil service pay levels.

"That would be a powerful incentive.

"They [the banks] might decide to split themselves up or we could do that forcibly.

"The goal here is to create a much more secure financial system where you don't have these giant companies that pose a threat to the whole economy."

He also wants the competition authorities to become much more intrusive, whether it's in banking or one of his other bête noires, the supermarket sector, which he says does not act in the best interests of consumers or suppliers.

"I think the competition authorities need to be much more aggressive generally and specifically where you have a concentration of power," he said.

"They should be using their powers to make the market more competitive, now whether that is breaking them [banks or supermarkets] up or other means is for others to debate."

And he encourages David Cameron, his former boss, to go further than he did in his first term as Prime Minister.

"Yes [he should go further], I think it is very clear where his heart lies.

"He is very much a champion of small businesses and the entrepreneur. I hope that will be carried through into a policy agenda that really makes a difference.

"The system ought to be geared to help the insurgents and not to protect the insiders."

Related Topics