The High Pay Centre (HPC), a leading UK think tank, is facing imminent closure due to the abrupt termination of its primary funder, the Financial Fairness Trust. This development raises significant concerns over the future of independent social research funding in the UK and its impact on efforts to address income inequality.
Established in 2011 by former Guardian business editor Deborah Hargreaves, the HPC has been a vocal critic of excessive executive pay packages, highlighting the stark contrast between CEO remuneration and average employee earnings. Its annual reports have consistently underscored the significant disparity in UK company pay structures. For instance, this year's report revealed that the median FTSE 100 CEO earned what a median full-time employee makes in an entire year in less than two and a half days in January.
The HPC's research has also shed light on the UK's corporate governance system, which it argues contributes to income inequality. Notably, no FTSE 100 company has appointed a worker director to its board, unlike in 13 EU countries and Norway where employee representation is often mandated by law. This lack of employee voice at the top makes it easier for remuneration committees to approve substantial salaries and bonuses.
The Financial Fairness Trust, which supported a range of research organisations focused on improving financial security for lower-income households, was founded in 2016 with a £90 million windfall from unclaimed assets following Standard Life's demutualisation. The Trust's beneficiaries included respected institutions such as the Institute for Fiscal Studies (IFS), the Resolution Foundation, and the Child Poverty Action Group.
The demise of the Financial Fairness Trust and its primary beneficiary, the HPC, raises questions about the sustainability of independent social research funding in the UK. This development may have far-reaching implications for efforts to address income inequality and promote financial fairness for those on lower incomes.