As the BBC is embroiled in a pay gap row, Libby Purves believes we would see less greed and fewer rows if the taxman took up Scandinavia’s more open approach and made pay public knowledge
This is the year of embarrassing financial declarations. The BBC was only the start: under new legislation, by next April all companies must publish their substantial pay gaps. That’s generalised, but we can see public service and charity salaries now, albiet wrapped in “bands”. The bankings of celebrities and the super-rich get calculated by the media with varying accuracy, MP’s earnings and expenses meet constant scrutiny, strikebound commuters tuttingly look up the pay of train drivers, and websites reveal what our neighbours paid for their house. Nosing into the wallets of others is a national pastime for the Brits: payday porn.
It is probably aggravated by a peculiar, prim British horror of admitting one’s income; a London university survey confirmed that Brits are seven times more likely to tell a stranger about their sex life- infections and all- than reveal their salary. Over the BBC business, the MP Anna Soubry shuddered at the “completely undignified” exposure, the word “mortified” was widely used and rich presenters, confronted on air, squirmed audibly.
Enough! Relax! It’s only money! You’re not confessing to a habit of rifling the poor-box. Personally, I yearn across the North Sea for the clean air of Scandinavia, where beneath stout woolly pullovers beat simpler hearts: communitaire, open, bracingly frank. In Norway, Sweden and Finland, whether you’re a reindeer herder or an electronics tycoon, your tax return is posted online: total income, tax paid, net worth. It’s part of “Jantelagen”: the presumption that no citizen is better than the other. Of course there is more snooping since the internet made it quicker than paperwork, so Norway now has a delightful rule: you get an e-mail telling you exactly who has been looking at your return. The media still collect and publish, of course, but journalists only bother if you are interesting for some other reason, good or bad.
Some Scandinavian citizens hate the openness- though it has been going on for many decades- but it certainly flattens and democratises society. Job advertisements name a salary rather than murmuring about “competitive rates”, and the public nature of all incomes leads to a flatter pay structure.
One Norwegian wrote about his 2015 form to explain how it works. His income before deductions was 707,154 NOK and tax payment 197,402 NOK, or 27.9 per cent. His net worth, he said, was recorded as “zero” because your home is listed as 30 per cent of its real value and mortgage debt is deducted. He added: “It might strike some people as radical. And I guess it is. But it’s a deliberate choice; we believe that making both public financing and public spending public, as far as possible, helps reduce opportunities for corruption and get unfairness fixed.” In Sweden, the tax agency is the most respected of state institutions.
“In Sweden, the tax agency is the most respected of state institutions”
No, I don’t think any British government would have the bottle to enforce such openness. But, just as a thought-experiment, consider the effect it could have. Agony, at first, then crippling embarrassment, either because you earn less than you pretend, or so much that you feel obscene compared to the acquaintances who you know to be better, more useful human beings. But gradually we would get used to it, and start to unshackle wealth from deeper notions of merit.
Also, these are tax returns remind us that the rich have their uses. In Finland, the revelation that two game designers paid €54 million each into the public purse one year provoked admiration. Last month Lord Sugar indignantly tweeted a picture of his latest cheque to HMRC: £58,646,024.44, and we know that he paid for about a quarter of NHS cataract operations, or six Routemaster-loads of head teachers.
Publishing tax returns would not only remove the ability of organisations to obfuscate over differentials but correct certain tiresome public preconceptions. Because bestselling authors turn up on rich lists, much of the public vaguely assumes that being published makes you rich. Hollow laughs: professional author’s average earnings are less than £12,000. Similarly musicians, actors or athletes who have been household names are airily presumed to be affluent and secure for life. Stage actors particularly suffer from this, as do those with the odd character part on television; many will be gritting their teeth over Derek Thomson (Nurse Charlie from Casualty) who earns nearly £400,000 for playing the same role endlessly, in the manner of an amiable plank. He’s not typical.
I theorise that making incomes visible would be a deterrent to those who- egged on by agents on commission- keep asking for more. We’ve heard much huffing about people’s failure to “lean in” and “demand their worth”. I would respectfully turn that around and suggest that there are many people who have a woeful problem of greed and insecurity, valuing themselves only in terms of cash.
“Making incomes visible would be a deterrent to those who- egged on by agents on commission- keep asking for more”
Maybe with Scandi openness more of them would behave like Kevin Whately, ITV’s Inspector Lewis. In 2008 he refused a pay rise with the words: “They pay me royally. I’m not interested in more money for the sake of it. You’re very aware that if you’re nicking all the budget, somebody else is getting threepence ha’penny or the production values aren’t going to be so high.”
We might see more of that in my utopian Scandi dream.
Libby Purves is a columnist for The Times