Redwood attacks gas cuts

John Redwood, a leading Thatcherite in the Government, yesterday broke Cabinet ranks with a thinly veiled attack on the management of British Gas for cutting the pay of more than 2,600 employees after a 75 per cent pay increase for its chief exec utive, writes Colin Brown.

In contrast to the line adopted by John Major, the Secretary of State for Wales made it clear he regarded the pay cuts as insensitive and badly managed.

The Prime Minister ridiculed the Labour leader Tony Blair in the Commons on Thursday for condemning the rise in salary to £475,000 for Cedric Brown, chief executive of British Gas. But Mr Redwood clearly sympathised with public outrage over the pay rise."If you wish to lead a cost-cutting drive there should be some effort to control costs at the top as well.

"A good officer does not expect his men to suffer privations or dangers in action that he himself would not face.''

Mr Redwood's remarks may embarrass the Prime Minister, who accused Mr Blair and Gordon Brown, the shadow Chancellor, of confusion on the issue.

"Running a large public company is a privilege as well as a responsibility,'' Mr Redwood said. "It requires qualities of leadership that go beyond a good head for figures or a sharp eye for a market opportunity.

"It requires a recognition that making people compulsorily redundant is a failure of planning, not a triumph of strategy. It requires an understanding of the fickleness of the market place and some sensitivity to the opinions of shareholders and customers.'' Mr Redwood said the best regulator was competition, which was "sorely needed'' in the gas industry.