REAR WINDOW: FAT CATS The man who was paid pounds 24,000 a year
Sunday 30 July 1995
Beeching was not a man to be trifled with: even Barbara Castle, as Minister of Transport, would feel intimidated by "his cold logic against which emotional protests had little effect". To a whole generation, of course, this cold logic made itself felt through his infamous axeing of railway lines.
But despite the high salary this was no precursor of 1990s corporate greed in the utilities; in fact, here was a "fat cat" skinned by the tax structure of the time. Today, between a third and one half of the gross salaries of top executives such as the British Gas chief, Cedric Brown, goes to the tax man; Beeching, however, was left with just pounds 6,500 of that pounds 24,000 after tax.
And it was this surtax (10 shillings in the pound on top of normal income tax) that drove away all kinds of rich and about-to-be-rich folk - ranging from nuclear scientists to pop stars - to tax havens such as Jersey or America.
Beeching stayed put and spent the rest of his career in this country grappling with ways in which the economy's long-term interests could be reconciled with the population's short-term desires. He did this not only at the Rail Board, but subsequently as a member (fittingly) of the top salaries review body as well as taking on other public appointments such as the Young Enterprise scheme.
But he never became popular; that salary, and that axe, hung around his neck for good.
When first approached for the BR post, Beeching didn't simply pluck the pounds 24,000 figure out of the air: it was what he was then earning at ICI. If nationalised industries wanted private sector management expertise, he reasoned, they must pay private sector rates. Whatever the logic, politically it was a disaster.
His "Himalayan" pay - as Labour MPs dubbed it - drew the attention of ambitious executives to what they saw as a punitive tax structure which required chairmen to be paid 35 times as much as their workers in order to earn 10 times more after tax.
On the other hand, footplatemen took the salary as an insult, and all the more so when they learnt how little Beeching knew about railways.
Certainly, he had a big job to do. When he took over at BR, the rail industry's deficit was pounds 158m and growing. There was far less coal and coke to be carried; rail had to face fierce, some said unfair, competition from a partly de-nationalised road-haulage industry boosted by the new motorway age, while the rapid growth in private car ownership had made many rural lines unviable. But this was the kind of problem Richard Beeching was trained to address.
Educated as a physicist, he had worked in armaments development during the war, before joining ICI. He first encountered the problem of public sector pay rates in 1950 when he was offered the job of deputy chief of Britain's atom bomb project. He turned it down because the pounds 2,750 salary he requested (based on his short-term prospects at ICI) was outside the civil service scales.
Within two years of being seconded from ICI to British Rail (for a five- year term) he had proposed closing more than 2,000 stations and 5,000 miles of track, with the loss of 70,000 jobs. "All I cut off were twigs with no sap in them," he explained at the time. Yet because some of these "twigs" were also socially vital branch lines, his unpopularity with the public remained. One day, on the wall of a station lavatory he noticed two bits of graffiti: one proclaimed, "Beeching is a Prat"; underneath in neater handwriting the other retorted, "No, I'm not". By the time Labour replaced the Tories in office in late 1964, "Beeching Must Go" was almost a national war cry.
In the end he was not openly sacked, but neither was he openly backed, even though senior government ministers including Mrs Castle and even the Prime Minister, Harold Wilson, privately agreed with his prognosis for Britain's transport network.
His position soon became untenable and he returned to ICI in 1965 - the year in which he was also given a life peerage. The motto that Lord Beeching - who died in 1986 aged 71 - chose for his coat of arms was, "Straight Down the Middle". His successor at BR, Stanley Raymond, accepted a pre- Beeching sized salary.
Earlier this summer, British Rail's recently retired chairman, Sir Bob Reid, was given a profit-related bonus of pounds 75,000, which brought his 1994/95 salary to more than pounds 200,000.
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