There is no such thing as a just reward. Salaries and wages are partly a reflection of effort and ability, but they depend also on plain dumb luck. Most of all, they depend on market demand for the job done. That is a cruel principle for workers who have been trained throughout their lives to do a job for which there is no longer any demand. But the market works like that. It makes more sense to spend public money on retraining than on subsidising wages for declining occupations.
In the public sector those disciplines do not apply. That is why it feels instinctively wrong that more than 800 people in public sector roles earned at least £150,000 in the past financial year. Of those, 30 are bank employees in the newly nationalised parts of the financial sector.
You can make a pragmatic case that, after all the economic disasters that banking failure has produced, it is important to attract talent to sort out the awesome mismanagement of the sector. But the bankers have only a marginal impact on the average remuneration of top earners in the public sector. The highest earner of the lot is Adam Crozier of Royal Mail, who was paid £1,309,000 last year. Royal Mail is an institution that has proved itself unable to do the job for which it is retained — delivering letters and parcels — without engendering industrial disputes. It is an inefficient company. By contrast, executive directors in the private sector earn on average significantly less than £100,000.
The inequity is not in reward, for it is not the role of government to intervene in wage-setting. It is, rather, in the relative risks that top people in the private and public sectors take on. Through no fault of their own, private sector businesses are suffering a collapse of demand. Failure in the financial system has fed into tight credit conditions in the corporate and personal sectors.
The public sector has grown as a result of that failure. When the private sector is being squeezed, taxpayers face fiscal tightening, and government departments face adhering to strict budgetary discipline, big rewards in the public sphere are hard to stomach.