Politics: riding the tiger

By Richard North - July 29, 2022

In common with most of the the nation, I have limited tolerance for the Tory party hustings meetings, the first of which was held in Elland Road in Leeds last night. In all, there are to be about a dozen.

The Telegraph’s view is that Miss Trussed came out well ahead. With the more general indications from a number of polls, it is beginning to look as if we will shortly be seeing a third female prime minister.

One thing that did emerge from the Elland Road hustings that was of interest was a question put to Sushi, in the so-called “quick-fire” round. “Should water firm executives who pollute to unsafe levels go to jail?”, he was asked, which elicited the following response:

I’m not going to give you a yes or no answer to making a criminal offence in the middle of a leadership offence… I don’t know enough to know that is the right course of action.

At least that was an honest response, and it is rather a pity that the same question does not appear to have been put to Miss Trussed for her response to be revisited when or if she takes over No.10.

There is certainly a view abroad that the current sanctions imposed on water companies do not have sufficient impact, as the people most responsible escape without any personal penalties.

As with health and safety offences in the private sector, where CEOs can be prosecuted for corporate manslaughter, it seems entirely appropriate that water company officials should be held criminally liable for their failures.

But it seems to me that the principle of personal liability for those in high office needs to be revisited more widely, particularly in the context of the rash of strikes that we are experiencing, escalating to the point where a general strike is being discussed.

In the earlier times, before Thatcher famously tamed the unions, government intervention in major strikes was the norm. But what characterises the current round of strikes – and in particular the rail strike – is the hands-off stance of government. Ministers are refusing to get involved: there is to be no beer and sandwiches at No.10, the famous legacy of the Wilson and Callaghan regimes.

One reason why that could never be is that, when it comes to calls for restraint and appeals to heed the greater public interest, the government is hopelessly compromised by the proliferation of fat-cat salaries paid to officials.

This is referred to in a recent piece in The Times to which I briefly alluded in an earlier piece, which picked up on the £100,000 bonus paid to Sir Simon Bollom, chief executive of Defence Equipment and Support (DE&S), on top of his salary in the range of £275-280,000, despite the quango’s lacklustre performance in the field of military procurement.

It gets worse when one sees that Adrian Baguley, Bollom’s deputy (salary: £150,000, approximately) was paid a bonus in the region of £50,000. Other DE&S senior staff received similar top-ups, despite a series of scandals including the £5.5 billion Ajax light armoured vehicles programme.

DE&S has failed to produce a single deployable Ajax 12 years after the programme began, says The Times. The public accounts committee has rightly described defence procurement as broken and criticised the waste of public money as well as a departmental culture resistant to change. The latest bonuses, the paper says, do nothing to instil confidence that the MoD is learning lessons.

But we are also invited to consider the same story of largesse at the tax office and the DVLA. Daljit Rehal, chief digital and information officer at HM Revenue & Customs (salary approximately £200,000), received a bonus in the region of £40,000 despite delays to its programme of digitising tax returns.

Five senior DVLA staff received bonuses despite a recent investigation by The Times documenting the huge delays and poor service for people trying to get a driving licence.

Something has gone very badly wrong with the ethos of public service, says writer Jawad Iqbal. Civil servants used to accept lower pay in exchange for better conditions and good pensions. Now they’re pursuing commercial levels of reward but with none of the accountability or consequences if they fail.

On that basis, it is hard to justify big pay packets and ballooning bonuses as the price of attracting top talent when so many departments are failing. Bonuses, if they are to be paid at all, says Iqbal, should be confined to cases of genuine excellence. “Otherwise, especially at a time of falling living standards and tight public spending, these bumper payouts are an insult to those whose taxes pay for them. We cannot afford to bankroll failure”.

There is, however, far more to it than that. As the Mirror pointed out as recently as February in a headline: “Fat cat water firm bosses earn £15m as amount of raw sewage dumped in rivers rockets”.

This paper pointed out that the average wage for “bosses at the water and sewage companies” in England was nearly £1.7 million and their standard salary rise was 27percent. The nine companies made nearly £2.8 billion in profits in 2020/21 and four paid £776 million in dividends to shareholders.

More recently, the ultra left-wing paper, the Morning Star reported that bonuses paid to “fat-cat city bosses” had hit a record high. In March alone, it said, “finance chiefs in London” had shared £5.9 billion in bonuses “as more than 16 million people in Britain face poverty and desperation”.

The figures were the fruit of research by the TUC, based on figures from the Office for National Statistics, which revealed that over the last year bonuses in the financial and insurance sector had rocketed by 27.9 percent. By contrast, workers’ wages went up by only 4.2 percent.

Bringing us right up to date, we see recorded in today’s Guardian (and elsewhere) the news of “soaring profits” at two of the UK’s biggest energy companies.

One of the duo, Shell, posted record earnings of $11.4 billion (nearly £10 billion) for the three-month period from April to June and promised to give shareholders payouts worth £6.5 billion. At the same time, Centrica, the owner of British Gas, reinstated its dividend, handing investors £59m, after reporting operating profits of £1.3bn during the first half of 2022.

The paper headlines its report: “‘Insult to millions’: Shell and Centrica profits cause outrage as energy bills soar”, with the sub-heading: “News of billion-pound profits comes after UK households warned average annual bill could hit £3,850 by 2023”.

Whatever the details behind these reports, the optics are appalling and we haven’t heard the last of this. As people are forced to make real financial sacrifices to meet the eye-watering increases in energy charges, resentment can only build.

Predictably, Frances O’Grady, the general secretary of the Trades Union Congress, says: “These eye-watering profits are an insult to the millions of working people struggling to get by because of soaring energy bills”.

Not least of the effects of this growing divide is probably to rule out Sushi as prime minister. A head of government who boasts a multi-million family fortune simply lacks the moral authority to unify this increasingly fractured nation, and any call for us all to “pull together” from this man would simply inflame public feelings.

But, whether Miss Trussed or Sushi, any new prime minister has a serious problem. After decades of financial self-indulgence from the “bosses” and those in high office, there is going to be little tolerance for the belt-tightening that is being imposed.

And it is hard to justify calls for restraint from the unions when their masters are living high on the hog and getting richer by the day. Would that they know it, the politicians are riding a tiger and the outcome could be more savage than they could possibly dream.