The Spectator

Public-sector fat cats

Jean-Pierre Garnier should have worked in the public sector not for GlaxoSmithKline

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Anyone organising a protest against fat-cat pay should bear in mind the experience of a group of gas customers who recently attempted to take a 40-stone sow called Winnie to the AGM of energy company Centrica in Birmingham. She was to sit on the pavement before the press cameras and be fed a bucket of swill to symbolise the supposed corporate greed which has pushed up gas prices by 12 per cent in two years.

What the organisers had failed to take into account was the bureaucracy now involved in handling a pig. First, the protesters were made to apply for an animal-movement licence. That hurdle overcome, it then transpired that they also required something called an 'animal-welfare licence'. After some consideration, Birmingham City Council decided that the criteria for this licence could not be met, and the stunt had to be called off.

The story poses the question: who is the real drain on the public – a small group of corporate fat cats who have helped themselves to a generous slice of their companies' profits, or the vast and growing army of state functionaries paid, at taxpayers' expense, to enforce petty rules? To read the commentary of the past few days, there is no contest. The angry GlaxoSmithKline shareholders who voted down a pay package proposed for the company's chief executive, Jean-Pierre Garnier, were warmly applauded on all sides.

The Secretary of State for Trade and Industry, Patricia Hewitt, described the shareholders' actions as 'justified fury'. Brendan Barber, general secretary-elect of the TUC, thundered that 'Britain's boardrooms are on notice, but there is no guarantee that they will act unless the government changes the law to ban payments for failure'. Even Neil Collins, City editor of the Daily Telegraph, appeared to be ready to haul Monsieur Garnier off to the Bastille.

That shareholders have the right to vote against their board, and if they so desire sack the boss, is undeniable. They do, after all, own the company. Whether the wider public has any reason to be upset by Mr Garnier's pay packet is another matter. In a rare case of wise judgment, Ms Hewitt has rejected demands that the government take it upon itself to decide how much the leaders of private-sector companies be paid. But some of the suggestions being put forward, many of which are being considered by the government, are equally absurd. The Amicus union has demanded that a workers' representative be put on the remuneration committee of every company. Not even the Tolpuddle Martyrs saw it as their business to decide how many bushels of corn a Dorset yeoman should be entitled to; their concern was limited to their own pay and conditions.

It is a bit rich that the war against executive pay should be coming from the pensions industry, whose own bosses have an unparalleled record for helping themselves to their customers' money by means of devious charges. It has to be wondered whether their attack on corporate fat cats is motivated by a desire to shift blame for their own dismal record at investing their customers' money.

Before Britain's executives are driven to seek work in America, where corporate pay is even higher, yet whose shareholders have enjoyed far bigger returns than ours over the past dozen years, the baying mobs gathering outside company AGMs might just consider whether there is a better target for their ire. Anyone disgusted by a chief executive's pay can sell their shares and invest elsewhere. The same choice does not extend to taxpayers who are being forced to finance the salaries and pensions of public-sector fat cats.

Last week Bradford City Council advertised for a new chief executive at a salary of £200,000; more than the Prime Minister is paid and three times as much as was, until very recently, considered the going rate for a local government chief. The money, needless to say, will come straight from the pockets of the city's council-tax payers and, via a complex system of cross-subsidies, from the pockets of taxpayers in the South-east. It is a similar story throughout the public sector: the more money that is being lavished upon it, the bigger the slice disappearing straight into the pockets of staff employed in ever-more meaningless non-jobs. Fancy an annual salary of £75,000 plus final-salary pension paid by the taxpayer? Then apply for something called the Head of Task Force Secretariat (ethnic minorities and the labour market) at the Department for Work and Pensions. Or how about £70,000 for being Director of Talent Strategy and Organisational Effectiveness at Ealing Borough Council?

Much has been made of a clause which would award Jean-Pierre Garnier £22 million in the event of his being sacked. Yet there is no end of public servants on similar deals. When Gurbux Singh, former chairman of the Commission for Racial Equality, was forced to resign in shame after threatening policemen at Lord's cricket ground, his payoff exceeded £100,000. The protesters against corporate greed have had their day of fun at GlaxoSmithKline. They should now go and camp outside the offices of our ministries, borough councils and assorted quangos and record a protest against public-sector greed.