The privatisation porkers have grown even fatter since the days of Cedric the Pig

In 1994 the chief executive of British Gas, Cedric Brown, was awarded a 75 per cent pay rise in a single year, taking his remuneration to £475,000.

At the time,this seemed an extraordinary sum for the boss of what had, relatively recently, been a nationalised industry. Uproar ensued.Brown, dubbed “Cedric the pig” by trade unions, become a symbol of post-privatisation boardroom excess.

So what would £475,000 be worth in today’s money? The answer is around £750,000.Yet that’s a mere drop in the trough by today’s standards. The pigs have fattened up over the last quarter century.

In 2017, Iain Conn, the new boss of Centrica (parent company of British Gas), enjoyed a total remuneration package – including share bonus schemes –worth £1.7m. But that was modest relative to the £4m (including a £1.4m “recruitment award”) he was awarded the year before.

Whatever else those union protests back in 1994 achieved, they didn’t manage to put a brake on executive remuneration.

Last week, pay awards at a more recently privatised company created an upset in the business farmyard.The total remuneration of Rico Black, the incoming head of the Royal Mail, is set to be up to £2.7m, while its outgoing chief executive, Moya Green, is receiving a £900,000 “golden parachute” payment.

This prompted a 70 per cent Royal Mail shareholder revolt at its annual general meeting. But the vote was only “advisory”. And unlike with the Brexit referendum result –another technically advisory vote –the Royal Mail board is showing every indication of treating it as such.

What could upset things, though, is Jeremy Corbyn’s Labour Party winning power and carrying out its manifesto promise to renationalise the Royal Mail, three years after it was sold off by the coalition. The top paid member of a public sector company is the boss of Network Rail, on £750,000.

It’s difficult to see Corbyn and the shadow chancellor John McDonnell cheerfully agreeing to raise this ceiling.

Polls show that Royal Mail renationalisation is popular; even more people want to bring it back into the public ownership than approve of the renationalisation of rail and water.

Debates about the public’s appetite for nationalisation have tended to focus on issues of service quality and value extraction by shareholders. The issue of bosses’ pay is a piggy that hasn’t really squeaked.

This is perhaps surprising, considering its lubricating role in the privatisation process. As John Kay, who has written extensively about the history of nationalisation, notes, the resistance of managers to the Conservative Party’s public sector sell-offs in the 1980s crumbled when they realised they could personally profit through higher salaries and share options.

Whether or not anyone else gains from privatisation, bosses of privatised industries certainly do.

Before British Gas was privatised in 1986, its chief executive was paid £50,000 a year. In today’s money, that is roughly £110,000 –at least 15 times less than what the Centrica boss gets today.

In 2005, a decade before its privation, the chief executive of the Royal Mail was paid £704,000. That’s £1m in today’s money, or less than half of what Rico Black is likely to accrue in a year.

Needless to say, the real-terms pay of the average British Gas engineer has not risen 15 times since 1986,nor has the pay of a postal worker doubled since 2005.

We see the same pattern in rail, in water, in infrastructure: privatisation results in an explosion of pay at the top of an organisation relative to the rest of the workforce.

Company boards and their remuneration committees insist that these business have become far more complex, that they are merely paying a market rate for managerial talent, that their executives really are worth it.

Yet evidence of an explosion of personal productivity from these bosses, or a surge in the quality of the service offered, is elusive. What seems to happen is that excesses in pay at the top of the rest of the private sector drag up the rewards of the former utility bosses, as remuneration committees worry about how it would look if they paid their executives less than the sector average. Thus a rising tide of greed lifts all bosses’ boats.

Whether or not the renationalisation of utilities is an economically progressive agenda, it certainly holds the possibility of sealing off the money trough from some hungry mouths.