In 1994 the chief executive of British Gas, Cedric Brown, was awarded a 75 per cent pay rise in a single year, taking his remuneration to £475,000. At the time,this seemed an extraordinary sum for the boss of what had, relatively recently, been a nationalised industry. Uproar ensued.Brown, dubbed “Cedric the pig” by trade unions, become a symbol of post-privatisation boardroom excess. So what would £475,000 be worth in today’s money? The answer is around £750,000.Yet that’s a
Last year Thames Water was hit with a £20m fine for polluting the waterways of Oxfordshire and Buckinghamshire with a billion and a half litres of raw sewage between 2012 and 2014. The judge cited a “failure to report incidents” and a “history of non-compliance” by the company. Equipment was unmaintained. Warnings from employees went unheeded by management. Thames’s conduct was branded “disgraceful”, justifying the largest financial penalty for pollution in UK corporate histo
Psychologists have identified a phenomenon they call “confirmation bias”. This is the tendency for people to interpret new information in a way that simply confirms their pre-existing beliefs. We’ve seen quite a lot of confirmation bias in the wake of Carillion’s belly flop into liquidation this week. For some on the left this is all confirmation that privatisation of the provision of public services has been a disaster. It shows that corporate fat cats can walk away with pro
As I wearily forked out for my monthly rail travelcard this morning I felt the pain of hundreds of thousands of other commuters around the country over the latest round of price increases. Does it have to be this way? Labour has been touting its promise of train company nationalisations as the solution to this miserable January ritual. Alas, nationalisation would not, in itself, be a free lunch for passengers and commuters. The UK railway – its maintenance, refurbishment and
Jean Tirole throws his head back and laughs. “You’re kidding!” he exclaims. I’m not kidding, I insist. It’s true. I explain to him, once again, that when proposals for regulatory price caps on energy bills are floated, politicians and respectable commentators in Britain tend to start discussing Marxism.
Tirole’s incredulity is significant. The 64-year-old Frenchman won the Nobel memorial prize in economics in 2014 for his pioneering theoretical work on how utilities ought to
For Labour it’s the glad confident morning of 1945 all over again. “Rail, water, energy, Royal Mail – we’re taking them back,” John McDonnell declared at the party’s conference on Monday, reaffirming Labour’s manifesto pledge to renationalise a swathe of industries and topping it off with new pledge to take public finance initiative contracts back “in-house”. Cementing the analogy, the Shadow Chancellor cited the post-war Attlee government, which “built a new society from the