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WHEN you’ve got a mere three MPs, and only ever intend to stand in 40 constituencies why bother to do an “alternative Queen’s Speech”? That’s a question for Plaid Cymru to answer. But each year they do one, and each year they get some column inches out of it.

This year is no different, and with the new proposal for a maximum ratio in wage levels between company chief executives and their staff, it is no surprise. Anyone interested in reducing inequality ought to be interested in this idea. But even if you agree with the objective, you might have concerns about whether it can work or could have unforeseen consequences.

Chief among these is what the ratio is to be. The Guardian estimates, for example, that the ratio between Tesco CEO Terry Leahy’s pay and the average (nb. not lowest) wage of his workforce is 907:1. Halving this would see Sir Terry’s pay fall to a shade over £4 million (or less plausibly, the average wage would surge to £22k – lets rule out that as a means to close the ratio). Despite being a very radical move, that would still leave a multiple of over 400. Surely Plaid would not sanction, and thereby tacitly approve, such inequality? 100:1 looks at the outer edge of fair, but that sees poor old Sir Terry taking a whopping 90% pay cut. Are we to believe that the market has overvalued his services by such a huge margin?*

All good fun, but you see the point. To meet the objective of really closing the pay gap, as opposed to merely tinkering, the state would end up introducing some fairly major corrections in the executive pay market. And at the end of it all it would, in effect, approve the notion that a boardroom fat cat is worth 100 times or more that of his or her cleaner. Then there is the question of top footballers, artists etc which cannot surely be dodged by arguing that “creatives” are different and hence should be excepted. All in all, it just doesn’t feel that egalitarian.

Perhaps a better idea is that advanced by the authors of The Spirit Level (a book discussed here) of democratic employee ownership, or workers’ control. As the splendid Chris Dillow points out here, workers are not only best placed to determine if their bosses are good or bad, they have an incentive to distinguish the one from the other. A really exceptional boss might be worth 900 times the pay of his staff in some instances for all we know. Provided they are happy to remunerate him or her accordingly, what right does the state have to say workers are wrong to direct their own company’s resources in such a way? Worker control provides a mechanism for valuing senior executives’ true worth, and will probably have the effect of reducing the gross disparities that currently exist.

And there is another reason why Plaid in particular ought to think about this method instead. A centrally selected ratio represents awfully big state socialism. As a party of decentralist socialism, surely worker control is the way forward. Adam Price once observed that his party’s socialism owed more to the Miners’ next step than to Labour’s corporatist ideals. Now is a chance to demonstrate it.

* We might, in fact. The OECD recently found that senior executives merely have excessive bargaining power (see OECD, “Income inequalities in the age of financial globilization“, World of Work Report 2009).