Gove’s speech at Water UK’s City conference last March was political theatre at its best from Westminster’s arch performer and provided the perfect opportunity for gleeful sub-editors to dust off another “fat-cat bosses” headline.
But it was also far from original. Utility-bashing had long-established itself as a spectator sport. The financial models of privatised monopoly companies, including how much water and energy network executives were taking home in pay and bonuses, were already providing a field day for page-one puns, from “rivers of gold” to “griddy guts”.
Nevertheless, the secretary of state’s salvo raised the stakes. And it highlighted the growing popular groundswell of dismay over economic disparity in the UK, along with the Opposition’s determination to make political capital from it.
While Gove no doubt intended it as a wake-up call – not that those running water, or network companies for that matter, needed it – it reinforced the message that now was the time for monopoly utilities to get their act together, especially with the looming spectre of renationalisation should Labour form the next government.
Paid more than the prime minister…
Certainly, one particularly toe-curling passage of Gove’s delivery seemed to hit a nerve. Listing the impressive salaries of some water company bosses, he dramatically declared the salary of one delegate in the audience as being “five times that of the prime minister”.
“You must realise that in the public eye you are very handsomely remunerated,” he continued, like an exasperated headmaster. “At least, one might hope, companies making such big profits, paying such big dividends and supporting such generous executive salaries would be big contributors to the Exchequer through their tax bill. Well some are, and others are not. Very much not.’
Regardless of how well his delivery went down with the assembled throng of water chiefs, the moment drove home the importance of public perception about the value for money of those leading our monopoly utilities and their individual track records – a key theme of Utility Week’s New Deal for Utilities campaign, which aims to help strike a better social contract between the public, utilities and policymakers.
But how do you measure the market worth of those in water and energy’s top jobs? Are their salaries justified and what is a fair rate? And should we not strive to attract the very best to run our lifeline services?
Well, Labour had a stab at it, see Labour’s limit.