Fat Cats cut back on everything – but their own salaries

State-owned industry cuts back to save money. Sounds a bit retro, but that’s the ongoing story at the Post Office, one of our last state industries -  not counting Northern Rock, of course.

And all it’s our fault. I was responsible as a DTI minister for the Post Office back in the early ‘90s. We wanted to privatise it, but by then the Major government was so enervated it was all we could do to muster a single-figure majority most nights. So instead we blew a few hundred million on some long-forgotten Post Office/Social Security card scheme which had Ian Laing, the then secretary of state, and myself in fits of apoplectic rage but which – for political reasons – we were told could not be dropped. Of course eventually it was dropped by the Labour government a few year later - but not before a few hundred million more of our money was wasted.

Since then, the Royal Mail decided first to rebrand one of the best-known names in the world to Consignia, joining a ridiculous fashion for companies to give themselves funky new names  - usually just before they went bust.

At around the same time Anderson Consulting became Accenture and yes, very nearly went under – despite being nicely linked to the new Labour regime having given a juicy sinecure to Nanny Patricia Hewitt when in opposition. She had become their “director of research” in the early ‘90s. Accenture survived to win lots of tasty government contracts, including making a right muck up of the billion pound NHS database.

The Royal Mail/Post Office, meanwhile, dropped the Consignia name to hoots of derision - and a seven figure bill plopped onto their doormat for the privilege. Then they took on the services of one Adam Crozier as their chairman. His background was a reasonably successful one at Saatchis, followed by a stint as chairman of the FA. Not quite the CV of someone taking on a major service operation, but the young Adam was very well connected – and now very well rewarded. £1m a year at a time when his organisation is ramping up its prices, slashing jobs and branches.

Crozier was of course stoutly defended by one Alan Leighton, his chairman who is also well remunerated for his far from full-time Post Office job – Leighton is a sort of professional company director who has around a dozen under his belt, yielding him £750,000 a year before bonuses, options etc which reportedly add a further couple of mill or thereabouts. 

Which reminds me. Way back when I was at the DTI in 1994, there was an unholy row when the then chief exec. of British Gas – Cedric Brown – decided to pay himself £490,000 or so (around a million in today’s money). Needless to say Brown and Blair hammered the poor fellow, who had spent his life in the business, the tabloids branded him Cedric the Pig, the whole thing was worked up into an example of how greedy bosses were and how the evil Tories let them get away with it and Cedric was forced to leave his job a year early.

But I digress – it’s all very different now, isn’t it? PR kid takes over Post Office, sacks people, closes branches, jacks up prices, pays himself a million smackers a year. All fine in an era when the ex-PM’s wife can make more in a night’s speaking engagement than a cleaner gets in two years; and rakes in more for her book rights than many earn in a lifetime. Oh yes - and Nanny Patricia Hewitt has just joined the board of BT as a non-ex for £60,000 a year – in my day a Labour councillor had to resign for buying BT shares when they were privatised. Who said Thatcherism didn’t work? Blair and Brown in the ‘80s, I seem to remember. They were wrong, obviously.

OK – back to the Post Office. Here’s the deal. I don’t know all of the answers. I do know we should have got shot of the thing and liberalised the market in the ‘90s. We would have if we could have – believe me, but the politics was against us. And now, when belatedly the job is being done, I do think that more options should be examined than just letting a self-serving clique run the thing, paying themselves huge salaries while seemingly preparing the whole thing for a very profitable privatisation.

If Crozier and Leighton are restructuring the thing and asking staff to make sacrifices, they should show leadership by doing the same themselves. That way they would earn respect – worth more than a million pounds per annum, believe me. 

We were rightly criticised for letting such things happen in the ‘80s and ’90s – it is much, much worse now. And no better for happening on the watch of Blair and Brown who were so nasty to poor old Cedric the Pig. It’s all a bit Animal Farm, isn’t it? The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which. Snouts to the troughs, boys – and girls!        

Phillip Oppenheim