By Dale Street
Only days after the Tories’ ‘emergency budget’, in which benefits cuts and a pay freeze for public sector workers were announced, the Network Rail (NWR) remunerations committee approved bonus payments amounting to £2.4 millions for just six NWR executives.
The biggest winner in this bonus bonanza giveaway was NWR Chief Executive Iain Coucher, who had announced his resignation only shortly before the bonus payments were made public. Coucher was awarded a bonus of £641,000, on top of his annual salary of over £613,000.
Coucher will be walking away from NWR after having been paid over £7 millions in just eight years. This figure does not include the fee which he was paid for organising the creation of NWR in 2002, following the collapse of Railtrack a year earlier.
For the first five of those eight years Coucher was not even classified as a NWR employee but as a ‘freelance’ hired out to NWR by his own company, Coucher Pender Ltd. This meant that instead of Coucher being paid a salary (which would have been subject to tax and National Insurance), a ‘fee’ was paid to Coucher Pender Ltd.
(The Pender in Coucher Pender Ltd. is Victoria Pender, who heads NWR’s Corporate Affairs Department and is paid £215,000 a year. Like her business partner, Pender has profited from the benefits of being a ‘freelance’ rather than employee.)
Apart from walking away with a very large amount of money, Coucher will also be leaving as the owner of a Scottish estate. Bought for nearly £1 million during his tenure at NWR, the estate covers 173 acres and includes a very large house, a boathouse, a jetty, two small islands, and access to deer-stalking and fishing rights.
When NWR was set up in 2002 Gordon Brown, at that time Chancellor of the Exchequer, wanted to keep its £20 billions of debts off the public books. As a disciple of New Labour, Brown also wanted to avoid (unfounded) accusations that he was setting about re-nationalising the railways.
Nominally, therefore, NWR was set up as a private company - despite the fact that 90% of its funding, amounting to £4 billions a year, is provided by public funding. In an e-mail sent to government ministers at the time of NWR’s creation one of Brown’s advisers explained that NWR’s organisation would be so complex that none of the tabloids would be able to understand it.
The result was a virtually entirely publicly funded company in which the public (in the form of the government) had no say. The government cannot, for example, instruct NWR to scrap paying its bosses sky-high bonuses. Nor can it instruct NWR what salaries it should be paying its bosses.
(By 2008 Coucher was already the highest-paid public official in Britain, being paid four times as much as the Prime Minister.)
But because NWR is not really a private company, there is no shareholder scrutiny of rates of pay and bonus payments either (insofar as ‘shareholder scrutiny‘ can be regarded as any kind of meaningful scrutiny).
In other words, the government threw billions of pounds at NWR every year while Coucher and his acolytes had a virtually free hand in deciding how much of it they would help themselves to.
For ordinary NWR employees (i.e. those whose annual pay is rather less than a seven-figure sum), Coucher’s period as Assistant Chief Executive and then Chief Executive has been one of sustained attack on staffing levels, pay, and terms and conditions of employment.
Coucher had an essentially disdainful attitude towards the NWR workforce, whom he divvied up and dealt with on the basis of their presumed newspaper loyalties:
“There are 17,000 or so maintenance staff in orange jackets who tend to read ‘The Sun‘.; 9,000 signal box and control room staff wearing NWR fleeces and jeans who may be ‘Telegraph’ readers; and the professional services people who wear business attire and may get their opinions from ‘The Times’. … I read each of their newspapers, as well as the FT, every day.”
Not surprisingly, Coucher was anti-union. When he described NWR as an organisation “where all but about 40 people are part of a collective bargaining group”, he certainly did not intend that as a compliment to the level of trade union organisation in NWR.
Coucher - correctly - saw unions and collective bargaining as an obstacle to pushing through his agenda for NWR. One personnel journalist summed up Coucher’s attitude as being that the “key challenge“ in his job was “coping with often change-averse dynasties of workers whose families have been in the job for generations.”
When NWR was faced with the prospect of strike action by maintenance staff earlier this year over its latest re-organisation - the history of NWR under Coucher was one of one ‘re-organisation’ after another - Coucher did not hesitate to use the courts to win an injunction against the RMT on the most spurious of grounds.
The dominant culture in NWR with Coucher at the helm was one of bullying and intimidation. Frontline staff were scapegoated for organisational failings. Critically minded managers were ‘managed out’ of the organisation. And millions of pounds were paid out in ‘compromise agreements’ to buy employees’ silence after they had been driven to resign from NWR.
Coucher may, or may not, be followed by someone who does not see the NWR Chief Executive’s post as a ticket to join the ranks of the landed gentry. But whoever fills the post will continue with Coucher’s attack on staffing levels, pay and working conditions.
NWR’s funding is decided in five-yearly ‘control periods’. In the current control period, running from 2009 to 2014, NWR needs to reduce its spending by over 21%. Further cuts for the 2014-2019 control period are virtually guaranteed, given the Tories’ squeeze on public spending.
The rail unions need to be prepared and organised to defeat those attacks.