Major defends bosses' 1,000% rise in pay

Cedric Brown fields Commons questions as Labour accuses privatised indu stries' chiefs of `playing National Lottery' in the boardroom

John Major was yesterday forced into his most aggressive defence yet of privatised boardroom excesses as Labour turned the spotlight on the £1m pay packets of two electricity chiefs.

Ordinary people struggling to pay their bills were "fed up with the same small group playing the boardroom equivalent of the National Lottery", Tony Blair, the Labour leader, declared.

According to a dossier prepared by Gordon Brown, the shadow Chancellor, Edmund Wallis and John Baker, chief executives of PowerGen and National Power, have received pay rises of 1,000 per cent since privatisation of the industry in 1988-89, while many other utility bosses have secured increases of more than 400 per cent.

Payments to the boards of the two companies and the National Grid totalled more than £5.3m, compared with £600,000 to the old Central Electricity Generating Board, Mr Brown said. Labour research showed that Mr Wallis of PowerGen received nearly £1.3m last year in pay and income from executive share options, and Mr Baker of National Power more than £1.1m, he said. The old Central Electricity Generating Board paid its highest director £106,000.

Mr Baker and Mr Wallis have the opportunity to make another £1m this year. Mr Brown said: "The directors of these companies are year-on-year millionaires at the expense of millions of consumers." Additionally, the board of National Power had awarded itself an increase in remuneration of 25 per cent, while employees collected just 4.25 per cent. The Government retains a 40 per cent shareholding in both companies.

Elected remuneration committees and specific shareholder approval of directors' pay should be a feature in all publicly quoted companies, Mr Brown said. But the privatised utilities - often effective monopolies able to pass pay-rise costs on to customers- called for additional action in the form of new powers for regulators to penalise excessive awards by cutting prices. Labour's commitment to tax executive share options as income was also reaffirmed yesterday. A document produced by Mr Brown said thattax relief on discretionary options was "totally discredited" and chairmen and senior executives of the privatised utilities showed "the most outrageous examples of how share-price management and executive share options can be combined to produce risk-free fortunes".

In the Commons, Mr Major firmly ruled out intervention, despite the Government's remaining 40 per cent holding in the two electricity supply companies. During heated exchanges in Prime Minister's Questions, he told Mr Blair: "Having put the companies in private hands we are not going to retain control over detailed decisions . . . What you and your colleagues have been about recently sounds very much like the beginning of a pay policy."

Kenneth Clarke, the Chancellor, emphasised yesterday that the management of British Gas had cut the real price of the fuel by 20 per cent since the industry was sold off. He left little doubt, however, of the Government's desire for the private sector toput its own house in order.

It was inevitable that when companies performed spectactularly some individuals would earn spectacular rewards, he said. It was up to shareholders to ensure that pay and perks were kept within bounds.

Mr Clarke later met the Institute of Directors as it unveiled proposals for full disclosure of salaries and benefits in companies' annual reports.

Inside Parliament, page 5

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Recruitment Genius: General Factory Operatives

£18000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee