Cap organisation pay ratios at 10:1

Binding cap

The estimate models an economy-wide legal cap, not the existing quoted-company disclosure regime.

• Current law requires disclosure, not a cap.
• FTSE 100 CEO pay gives only a scale check.
• Avoidance risk is very high.

Core trade-offs

Lowest-paid workers may gain if firms lift the floor. Senior workers, shareholders, customers and taxpayers may bear costs. Firms may also outsource low-paid roles.

• Low-paid workers may gain.
• High earners lose taxable pay.
• Firms may restructure around the cap.

Illustrative fiscal impact

-GBP 0.5bn to +GBP 5.0bn. Central estimate: +GBP 1.2bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• Gross costs are separated from tax, NI and benefit offsets.
• Private business costs are not automatically fiscal costs.
• Behavioural responses widen the range materially.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: Likely negative at the margin if firms outsource, split entities or relocate senior roles.
• Wages: Could lift bottom pay, cut top pay, or both; incidence is uncertain.
• Prices: Some firms may raise prices if they increase bottom pay.
• GDP / productivity: Likely negative under a strict economy-wide cap; talent and restructuring risks are material.

Assessment

This is not a normal labour-market regulation. A binding 10:1 cap would change remuneration design, outsourcing incentives and executive location choices. The fiscal range is deliberately wide because the taxable remuneration above the threshold is not public.

Confidence: Low. The missing quantity is taxable remuneration above each organisation-specific 10:1 threshold.

Main risks

• Avoidance design: Firms can shift pay into contractors, partnerships, shares, overseas roles or separate entities.
• Tax-base loss: Cut high PAYE remuneration can reduce tax receipts unless profits or low pay rise.
• Output risk: Rigid pay compression may reduce senior-role location or firm productivity.

Safeguards

• Define total remuneration comprehensively.
• Include contractors and group entities.
• Require HMRC/Companies House audit data.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for cap organisation pay ratios at 10:1 Internal - PolicyLens, 2026
• The Companies (Miscellaneous Reporting) Regulations 2018: Q&A UK government guidance - BEIS, 2018
• Fat Cat Day 2026 Research briefing - High Pay Centre, 2026
• Rates and thresholds for employers 2026 to 2027 UK government guidance - HMRC, 2026
• Unions and Inequality Over the Twentieth Century Academic article - Farber, Herbst, Kuziemko and Naidu, Quarterly Journal of Economics, 2021
• Labor Market Institutions and the Distribution of Wages, 1973-1992 Academic article - DiNardo, Fortin and Lemieux, Econometrica, 1996
• Workers' Charter 2026 Party policy source - Green Party of England and Wales, 2026

Other Green policies

• Raise the minimum wage to £15
• Index public-sector pay to inflation
• Add public-pay restoration premiums
• Raise low-paid public-sector wages
• Protect pay in transition schemes
• Create a single worker status
• Equal terms for outsourced workers
• Raise statutory holiday to 35 days