Business

Steve Hilton: 'Pay bankers the same as civil servants'

Media playback is unsupported on your device
Media captionSteve Hilton left the job of prime minister's director of strategy in 2012

The bosses of large banks should be paid no more than people at the top of the civil service, David Cameron's former director of strategy has said.

Steve Hilton said any companies that would require a state bailout should they "go wrong" should be considered part of the public sector.

Mr Hilton said such a move would be a "powerful incentive" for reform.

Top civil servants receive £100,000 to £200,000 a year compared to multi-million pound salaries for bank bosses.

Mr Hilton told the BBC's business editor Kamal Ahmed that capping pay at banks who rely on the implicit backstop of state funding should they fail - which he says the largest banks do - would mean "they 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."


Analysis: Kamal Ahmed, BBC business editor

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.

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?

Read Kamal's blog in full


Mr Hilton also said he wanted the competition authorities to become much more intrusive in banking, but also in the supermarket sector, which he said did not act in the best interests of consumers or suppliers.

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

"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.

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

'Catastrophic damage'

The chief executive of the British Bankers' Association (BBA), Anthony Browne, told BBC Radio 4's Today programme: "I think these proposals are great at generating publicity for Steve Hilton's book, but if any government were to take them seriously they would cause catastrophic damage to what is still a leading sector of the UK economy and the biggest exporter and one of our biggest tax payers.

"And if you were to ask the American government should you introduce a wage cap on IT executives, for example, then I think you would be laughed out of town.

"The fundamental point is: has there been a problem with banker's pay in the past? Absolutely. Have people been award outrageous amounts for failure? Absolutely. Has it changed dramatically in the last five years? Absolutely. We have had wave after wave of reform, we now have the most tightly controlled, regulated banking pay of any centre, anywhere in the world."

He said bank bonuses had fallen 80% over the past five years while they had increased in other sectors of the economy.

And he added the taxpayer was now making money from the bailout of the banking industry in 2008.

"What has happened with Lloyds has been a remarkable turnaround story that has actually led to taxpayers getting billions of pounds extra."

Related Topics

More on this story