Wednesday, 25 August 2010

Curbing senior pay at County Hall

In the last two weeks the West Briton has questioned senior executive pay at Cornwall Council and the “golden parachute” deals paid to senior staff in some cases. This week, Alec Robertson, the Leader of the Council, returned from holiday and took immediate action to tackle the issue. All credit to him for taking a lead.

Getting to grips with the financial mess left by the last government requires some painful decisions on public spending. We need to make sure the pain is shared and I believe that any cuts must start at the top.

It is not a problem limited to Cornwall. Across the country senior pay in local authorities has got out of control. Some people say that council chief executives manage large budgets and so should be on a salary comparable with those in major companies. But there is a big difference. The Chief Executive of a large company has to make money whereas a Council Chief Executive only has to spend money and we all understand that it is easier to spend money than make it.

Then there is the fact that the really big decisions in a council are taken by the Council Leader and his cabinet, not by the Chief Executive whereas the boss of a large private company has to take the major decisions himself.

I think the civil service provides a better guide to the right salary for local authority chief executives. The Permanent Secretary of a typical government department is around £150,000. There is no logical reason why the pay of a council chief should be more than this. But across the country they are regularly paid £100,000 a year more than the Prime Minister. How can that be right? Such high levels of pay are not driven by the market, it is more the case that a high pay culture has been allowed to develop over the last decade and this must now be quashed.

Kevin Lavery is a talented Chief Executive of Cornwall Council and I rate him. I have also met many of the directors of service who have impressed me too but I don’t think we can duck the issue of pay any longer. Some say that you can’t change someone’s contract of employment but just this week I met a woman who works for Cornwall Council who has been asked to consider a 5 percent pay cut as part of a consultation. If it’s ok for the junior ranks to take a cut, it’s ok for those at the top to do the same.

I don’t like to see people at the very top of organisations seeking refuge in arbitrary employment contracts. People who are worth their salt in such positions are guided by what is right not by some piece of paper. They should lead by example and always be the first to make a sacrifice and we should give them credit if they recognise this.

Thursday, 12 August 2010

Getting the banks under control

Last week the major high street banks between them announced combined bumper profits of over £8 billion for the first six months of this year. A different statistic showed the other side of the equation. Four thousand businesses were forced into liquidation in just three months as the banks horded the money for their own bonuses rather than lending it to hard pressed businesses trying to generate real wealth for the country.

This can’t go on. The banks have got to learn that they can’t just go back to the way they behaved before the financial crisis. The bonuses they were paying themselves were totally out of control and divorced from reality. So much so that they had to be bailed out by the taxpayer because all of them had become “too big to fail.” So a first step is to look at ways of breaking them all up again so they are smaller and could just go bust without anyone really bothering. That way, you encourage some much needed responsibility in this wayward industry.

Second, if we want to rebalance our economy away from banking towards wealth creating industries, then we must also rebalance the law. There is only one way out of this recession and that is through enterprise. We need talented individuals to have a go, take risks and try to turn new ideas into industry and business. But an integral part of enterprise is risk and how the law regards risk is important.

Earlier this summer I was one of the twenty MPs to be given a chance to introduce a Private Member’s Bill. Private Members Bills are a way of introducing legislation through parliament but outside of the government agenda. Individual MPs draft their own laws on issues they think are important and must then win support for them from across the political spectrum.

My Private Member’s Bill has the not so catchy title of the “Secured Lending Reform Bill.” At its heart is a simple premise. If an individual or business offers a bank a charge over their assets, then they have a special right to expect that bank to behave honourably. Among those four thousand businesses shut down by the banks in the last three months will be cases where hard working, conscientious people had offered their home as security to a bank in order to secure support. But having made this extraordinarily generous gesture they currently have no real protection under the law. Banks can and do enforce their security recklessly and prematurely, without regard for either the entrepreneur or their other unsecured creditors.

So my Private Member’s Bill would rebalance the law, making it harder for banks to enforce their security and throw people out of their homes. It will encourage and reward real enterprise and might well mean that the banks have a little less money left to waste on their Ferraris which is no bad thing.

Friday, 6 August 2010

Reasons to be cheerful

As Parliament enters recess for the month of August, we end term on a much brighter note.

Last year Britain spent some 150 billion pounds more than it raised in taxes which is completely unsustainable. So there has been much talk of cuts in recent months, whether the suspension of capital building in schools or delays in match funding for major redevelopment projects until after the Comprehensive Spending Review is completed in the autumn.

But last week we managed to get money flowing on a whole range of projects which are important to Cornwall and which are dependent on tight time scales in order to draw down public grants managed by the EU.

All projects funded under the European Regional Development Fund which don't require government match funding have now been given the green light. That means that all but two of the 49 projects that looked in doubt two weeks ago are now ready to go without further delay.

This week the government also agreed to inject £5 million into the regeneration of Hayle harbour, which is at a crucial stage. The investment will help repair the harbour walls along the north quay and put in place the infrastructure to support the new Wave Hub project which is the first of its kind in the world and really puts this part of Cornwall in a world beating position to develop this new technology.

But as well as putting in place the infrastructure, we also needed to support the small firms that are developing the technology. So further technology grants to drive development have been made available to ensure that wave power developers choose to come to Hayle.

Three projects at the new Combined Universities for Cornwall at Tremough have also been given the green light this week which means we can continue to develop our academic lead in Cornwall in sustainable energy and the digital and creative industries.

So there is a lot more to be optimistic about than there was a month ago, but much more to do. As a former student, I was incredibly disappointed not to have been able to get Cornwall College access to funding to refurbish the campus at Pool. They do some great work there and have built strong links with business. We need to look for other options to try to take some of their plans forward.

There are other important projects still on hold until after the Spending Review in October including the East-West road link at Pool and some other businesses are still waiting to hear whether their grants will go ahead. Finally, I want to make sure that those schools who are not now going to get funding under the old, rather bureaucratic "building schools for the future" programme, are at least prioritised when it comes to allocating the capital spending that is made available for schools after the spending review. So my in tray will be full when parliament comes back in September.

But August will also an important month because we are in the process of putting together plans to replace the Regional Development Agency with a new Local Enterprise Partnership covering Cornwall and the Isles of Scilly. Making sure that the business community decide the shape and form of that LEP is a key priority,because if we don't get it right, we will not succeed in accessing the newly created Regional Growth Fund.

But my main focus in August will be getting around the constituency and meeting as many people as possible. Have a good summer.