New charter suggests ways to boost wages for lowest paid workers

A new ‘charter for fair pay’ has been published, recommending several policies to boost wages and reduce inequality by creating a fairer pay system while reforming the workplace.

Based on research and discussions with experts, the abrdn Financial Fairness Trust and High Pay Centre’s charter focuses on closing the pre-tax gap between the highest and lowest paid workers.

Low- and middle-income earners stand to benefit the most if the recommendations are accepted.

The 24-page report builds on the 2024 employment rights bill by outlining practical steps for the government to take without major spending or tax hikes.

Employment rights

The charter suggests several measures to support workers while being more transparent. These include:

• New workers should be given clear info about their rights.
• Companies must be held accountable for undermining unions.
• Strengthen unions and works councils to give workers a real voice.
• Companies publish detailed pay info for high earners.
• Workers should know how their pay compares to others.

Workplace changes

Several changes in company management have also been proposed:

• balancing the needs of shareholders and stakeholders
• adding elected ‘worker directors’ to boards for better accountability
• capping the pay gap between CEOs of public service providers and average workers

Other suggestions

• introducing tax and procurement benefits for responsible businesses that pay fairly
• asking investors to explain how they account for their beneficiaries’ interests when making investments
• setting up a team to promote worker ownership and profit sharing, with optional goals for big companies

A fairer and more productive country

The report’s authors Paddy Goffey, Luke Hildyard and Chris Rees believe the suggested policies would help shift money from the wealthy to those in the middle and lower classes.

They also think these policies could boost overall wealth while making sure it’s shared more fairly – like having a bigger pie that's cut into more equal pieces.

They say: “A government implementing these policies would not only contribute towards a fairer and more equal country but also one more prosperous and productive.”

The authors also argue that the policies are practical and could bring significant changes, though admit that some are quite technical and will need thorough discussion beforehand.

Accompanied polling suggests the majority of people in the UK support the policies, the authors add.

When will we see any changes?

The employment rights bill is the first part of the government’s plan to make work pay by improving working conditions for millions.

The first consultations about the planned reforms are expected next year with the bill expected to become law by 2026 at the earliest.

This will also be the case if the government decides to apply these policies, so we’ve got a while to wait before we know exactly how our incomes could change.

If you’re looking for help sooner rather than later, help is at hand.

We’ve got lots of nifty ways to boost your income or save cash, or you can ask us for free and impartial debt advice too.