Exclusive: State Bank Chief Salary Revealed
The banker recruited to help set up a new Government-backed business lender is to be paid more than the majority of Cabinet ministers, Sky News has learnt.
Keith Morgan, who has spent the last three years working for the body that manages the taxpayer's stakes in Britain's bailed-out banks, will receive a salary of £120,000 for working a three-and-a-half day week. Members of David Cameron's Cabinet are paid a basic salary, including their parliamentary wage as MPs, of £145,492.
The disclosure of his six-figure salary by an insider at the Department for Business, Innovation and Skills (BIS) risks fuelling the ongoing debate about the remuneration of public and civil servants at a time when many public sector workers are entering another year of pay freezes.
Mr Morgan, who stepped down as a director of UK Financial Investments (UKFI) earlier this year, will be charged with "leading the design work" for the Government's new business bank, which will attempt to tackle a logjam in the supply of credit to small and medium-sized companies (SMEs).
Mr Morgan will effectively be taking a pay cut to oversee the new project, insiders pointed out. UKFI's most recent annual report said that he was paid a full-year equivalent salary of £200,000 prior to his departure. His pay in previous years was not disclosed because he was not a member of the UKFI board.
Former colleagues of Mr Morgan praised him as "an exceptional banker" who was instrumental in achieving a respectable price for the taxpayer when Northern Rock was sold to Virgin Money last year.
His pay deal will also pale by comparison with the £1m-plus package awarded to Mark Carney, who will become Governor of the Bank of England next year.
Vince Cable, the Business Secretary, confirmed on Thursday that the advisory board that will oversee the establishment of the new business bank will be chaired by Sir Peter Burt, the former chief executive of Bank of Scotland.
Mr Cable said: "Small and medium sized business are the lifeblood of the British economy but they are currently struggling to accrue the long term capital they need to grow. This is an important gap in their growth cycle which the business bank will plug by offering new sources of finance.
"To help deliver this, the Government will be advised by a talented panel of experts, led by Sir Peter Burt. It is important we get the development of the bank right. This is a long term, durable institution, not a quick-fix gimmick, and I'm confident that we are on track to deliver this help."
Mr Morgan's work will focus on the design and structure of the new business bank, which will attempt to provide more diverse sources of funding for credit-starved SMEs.
A former Abbey National banker, Mr Morgan could not be reached for comment.