Monday 27 April 2009

Who are the real fatcats?

According to this story today, if they win the election, the Tories will be publishing a list of all public servants who earn more than £150,000 a year – so that we can all see "whether they're worth the money".

But why stop at the public sector? Why not a list of all the bankers and speculators who earn more than £150,000 a year, so that we can consider whether they're worth it too?

Cameron argued that it isn't the top managers who give value for money, it's the frontline workers. But isn't that equally true for private industry?

He said that the high paid public sector workers are "getting rich at the taxpayer's expense". As opposed to the high paid private sector bosses, presumably – so at whose expense exactly are they getting rich?

As citizens, we receive goods and services from a range of organisations – some of which happen to be in the public sector, and others in the private sector. Ultimately, as customers of private companies we pay their salaries too, just as we pay public sector salaries through taxes.

They won't include the private sector of course. But the way the idea was floated tells us that these are the same old Tories at core. Private sector good, public sector bad is a central part of their belief system, and they simply can't help expressing that.

There's certainly an argument for trying to value what people do, and look at what they're getting paid for it; but it doesn't start and end with public sector employees.


Adam S. Margetts Esq.BA said...

Can we start hearing some more about the Third Sector, maybe even having some investment within!?

While the public and private sectors are both valuable commodities and powerful players - the third sector (voluntary/comunity/charity etc), tends to be left off the picklist.

Despite the report entitled: Making a Difference,(2007), Wales Cooperative Centre. Which refers directly to the benefits of Community and Social Enterprise. The last great investment in Social Enterprise (to my knowledge) closed last year. Amman Valley Enterprise. Remember?

No-one in CCC has ever got back in touch with me after my correspondence in the weeks following the sudden closure.
What ever did happen to the European Objective One funding allocations? and the ICT equipment, fixtures and fittings etc
And why/how is Mountain Gate still operating?

So, as for fatcats? someone is! but it is not me.

kairdiff West Kid said...

Presumably the answer to your question is this: said very rich people have been donating to the tories for years and to Labour too, so the prospect of kiling their golden geese doesn't appeal to these cynical demagogues in Liebour and Conservative parties.
Civil servants are an easy target. A tory government will go back to Thatcherite habits of demonising the public sector. Their cranky hard-right supporters at the Daily Mail are already doing it, telling us that public sector is effectively a communist fifth column.

Adam Higgitt said...

The Conservative Party can speak for itself, but I'd imagine the answer to the question "why stop at the public sector?" is that the public sector spends our money while the private sector spends its own and that of its shareholders and investors.

If, as you suggest, private sector managers offer poor value for money, a mechanism already existed to deal with them - at least in listed companies. Shareholders can replace the management or dispose of their shares. Neither option is available to those served by a very wide range of public sector organisations.

You suggest that we pay the salaries of private sector leaders as well as those in the public sector, and this is true up to a point. But the big difference, I'd suggest is that we can stop these payments if we wish. Doing something similar in the public sector is called tax avoidance, and you can go to prison for it.

John Dixon said...


Outside the institutional investors, I don't think that 'shareholders and investors' have any real power, whatever company law might nominally say. And the institutional investors are generally run by, and represented by, the sort of people who are part of the same culture as the managers of the companies in which they invest.

In the case of some goods and services which we buy from the private sector, we can, of course, simply stop buying them. But there are plenty of others (and I think particularly, though not exclusively, of the formerly nationalised companies, or the banks) where the 'choice' consists only of swapping to another company run in the same way by the same sort of people.

I don't have a real problem with the idea that we should be able to judge the 'worth' of those who are responsible for providing services to us; but my underlying point is why that should be considered a good thing when it applies to, say, the health service, but a bad thing when it applies to, say, banks?

It seems to me that Cameron is, to some extent, attacking 'excessive' (and there's a good argument to be had about what is 'excessive'!) pay in the public sector as a response to the economic crisis, whilst 'excessive' pay in the sector which actually caused the collapse goes unaddressed.

Anonymous said...

It seems to me that Cameron is, to some extent, attacking 'excessive' (and there's a good argument to be had about what is 'excessive'!) pay in the public sector as a response to the economic crisis, whilst 'excessive' pay in the sector which actually caused the collapse goes unaddressed.Excessive pay in the private sector did not cause the economic crisis and Cameron is not advocating his suggestion as a response to the crisis either. The point of Cameron's push is for civil servants be more transparent to the people who provide their wages. It is not a reaction to the global downturn, it's common sense.

kairdiff West Kid said...

Adam - not sure about that: in a world where both Nu Liebour and the tories are getting more and more private companies to do public sector work, hiving off eerything from hospitals to royal mint, and often paying them sweeteners form the public purse to do so, it's extremely relevant to know how much private company senior staff are getting paid.

Owain said...

"... but my underlying point is why that should be considered a good thing when it applies to, say, the health service, but a bad thing when it applies to, say, banks?"

Until recently it was not money taken with a threat of force being spent by banks but money handed over willingly by customers. Customers can choose to take their money elsewhere. So can shareholders by selling their shares.

"... whilst 'excessive' pay in the sector which actually caused the collapse goes unaddressed."

Had the banks been allowed to fail it would have been addressed admirably. As would the political interferences...

A leopard cannot change its spots. Investment bankers did as investment bankers do. The FSA was there to regulate them and failed as it was too pig headed to bother learning what the investment banks were doing - which was basically funnelling money borrowed from the money markets through high street banks to create credit products which could be sold back to the money markets. Nothing more than a Ponzi scheme and the FSA failed to notice.

Taxpayer revenue is not your money and we cannot take our money to some other service provider, so you have a duty to spend it wisely.

John Dixon said...


'excessive pay in the public sector did not cause the economic crisis'I'm not sure that it's as black and white as that. Greed, both corporate and individual (in terms of chasing large bonuses) and a very short term outlook was surely a contributory factor, in that excessive and foolish risk-taking was directly rewarded with large remuneration packages, wasn't it?

Actually, I wouldn't argue with Cameron if he wanted public services to be more open and accountable in what they do - especially the civil service. I just don't think that publishing a salary list helps that. It's more likely to lead to the public pillorying of individuals by the tabloids for how much they earn - which, from an anti-public sector attitude (such as the Tories display) is always likely to be too much.


I agree that taxpayers' money has to be spent wisely, of course. I've never suggested otherwise. And it should be subject to proper scrutiny. But publishing the salaries of individual public servants doesn't do that.

I notice that the Cynical Dragon also takes issue with me on the question.

He suggests that "the vast majority of people in the private sector have the right to privacy when it comes to their wages". Fair enough - it's an opinion. But if the individual's salary (as opposed to, say wage scales in a generic form) is a matter covererd by the 'right to privacy', why wouldn't the same right apply to someone who happens to work in a field where he or she is providing a public service, rather than only where they're trying to make profits at our expense?

To return to the basic point from which I started - the underlying attitude being displayed by Cameron and the Tories on this is basically one of antipathy - nay, outright hostility - to the public sector, and those who work in it. Concentrating on the salaries of individuals is simply personalising the very serious issue of ensuring value for money - and focussing attention on a very small element of public exenditure to boot.

Spirit of BME said...

Mr Higgitt`s remarks are well made- well done that man.
Mr Dixon your observation on institional investers ,I fear also strikes home.
The lesson is to beef up shareholder power so they understand their responsibility of what running a company is all about rather that investing in it just to take out the money. Pension Funds were the most guilty- Lurkers