Sunday, March 08, 2009

Prescott Approved 32% Fat Cat Bonuses As DPM

What a difference nine years make. John Prescott has been railing against bankers' bonuses and says the government should ignore the terms of Sir Fred Goodwin's contract and cancel his pension entitlement. Yet it was Prescott, who, nine years ago approved 32% bonuses for senior executives from the Civil Aviation Authority. Here's the extract from 19 June 2000 from Chris Mullins' diary...

A meeting with JP to discuss the huge bonuses awarded to the board of the Civil Aviation Authority on the basis of some not very exacting performance targets. JP was in belligerent mode. 'Do you agree with this?' he growled. 'No', said I... 'I don't like it any more than you do, but I don't see that there's anything we can do. It's in their contracts. That's the system we've signed up to.' 'I thought we were supposed to be in politics to change systems.' At which JP turned his fire on the officials. What were the workers getting, he demanded. No one knew, but it was probably in the region of 3.5% (as opposed to bonuses of between 28 and 32% for the top brass). Gus MacDonald (who takes JP seriously) said that bonuses of 35% were not uncommon in the industry and that, in any case, the CAA salaries were not large by the standards of the private sector.... Suddenly JP mellowed. He even resisted a suggestion that we should trim. If that's what was in their contracts, so be it.


So, one rule for CAA fat cats, another for Sir Fred. Isn't it strange what being out of power does to one's memory? Or indeed one's interpretation of the law of contract.

8 comments:

Colin said...

I heard the other day that when Prescott was Deputy PM, he wasn't allowed to take lunch breaks.

It took too long to retrain him...

Dave H said...

"Gus MacDonald (who takes JP seriously)..."

I think we get the message.

From the moment of his appointment as an initially powerful DPM he was progressively stripped of power and influence as the true extent of his blustering ineptitude became obvious. He left office a national joke.

In the name of justice can we strip down Prescott's pension to the national average?

Anonymous said...

Prescott is a fool - Like Brown he cannot take responsibility for his actions or ever apologise: The man who whilst standing in for Blair at one of his last PMQ's just blaimed the Tories, despite them not being in office for over 10 years. Pathetic - uterly pathetic.

Oldrightie said...

Don't forget those same CAA employees had been Public Servants. That scandal readily slipped (pun warning) under the radar.

Chris Paul said...

The key to this may be in two facts that you conveniently ignore:

1. In the extract. Is that they're not paid that much basic.

2. That they haven't stuffed up.

32% represents not only a relatively low amount of cash but also is lower than many bankers' enjoy. By a factor of three or much more in some cases.

But 1 and 2 are significant differences. It's the old apples and bananas category error.

Doubting Richard said...

It's OK for you, though, you don't pay their wages. I do.

The CAA is self-funding, in fact it is required to budget on making a small surplus each year from all the fees. That is probably why Prescott doesn't care, because it is people he imagines are wealthy (and who mostly would never vote Labour) who pay. Of course most of them are not wealthy at all, and the fees just make it too expensive for some people to choose flying as a career. Equality and life-long learning, eh?

The fees are utterly extortionate. Just to get my licence reissued every 5 years, a case of printing off a few pages and putting them in a small plastic wallet costs £126. Until 2000 the licence didn't need to be reissued, it ran indefinitely.

To sit in a classroom with between 20 and 100 others and take an exam, then have it marked by a computer is £63; most commercial pilots sit 14 exams, so that's $882 plus any resits. Four days of exams with one invigilator (who needs no skill or qualification) for every 20-30 people for £882. To compare with the private sector, the actual training to take the exams in an approved school, in a classroom with average classes of around 12 students to one instructor cost well under £200 a week.

To actually have a CAA chap come and test you for a commercial licence or instrument rating, a process that takes half a day, is now £729. No, that doesn't include the aircraft hire, and if your school is not at an airport with examiners you have to go to them, not cheap at £360 per hour in a twin-piston.

That's OK, on the odd occasion we need to go to the Belgrano (as their Gatwick office is known) we can use their subsidised canteen, which is very cheap. They use it every day at our expense of course, an untaxed perk.

Doubting Richard said...

P.S. In 2000 when that was written I was doing my commercial ground training. The whole training system for flight-crew training was falling apart. It had just changed to a European system in January 2000, and was an utter farce.

The first two months of ground exams no-one in any of the four countries that were involved passed all the exams they sat; many passed none or only a couple. The system is still not right, but it took more than 18 months to stabilise, as it was still not right when I started teaching the course in mid 2001.

The fact that the people who presided over that got any bonus for such failure is dreadful.

belgranoan said...

As someone who has worked in the Belgrano for many a long year I can confirm Richard's comment about the staff canteen being very cheap. It's also very good; they do a lovely curry on Thursdays.

Recently it was proposed that visitors as well as staff be given the canteen subsidy, but this was rejected as the Authority is desperately trying to find ways of cutting costs.

I can't find the exact figure for 2000, but I believe us workers got less than a 3.5% wage increase that year, though I could be wrong.

I do know that bonuses of any description are long gone, at least at pleb level. There are rumours that our pay will be frozen next time round. At least, again, at pleb level...