Put a salary cap on the council bosses

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He will probably never talk to me again but I think his £160,000 salary should be cut, as should the salaries of the chief executives of Wandsworth (£240,000), Westminster (£230,000), Kensington and Chelsea (£220,000) and all the other councils where public service has become a path to riches.

They might accuse me of "gesture politics". What difference would it make to the taxpayers funding Westminster council's overall expenditure of £945million if its chief executive's pay went down? Practically there would be no effect but psychologically it would matter enormously. The current crisis is so severe it feels like wartime. People expect equality of sacrifice. As unemployment rises and the demands on the taxes of those in work go up, those at the top must lead by example.

Although I admire the Government's determination to protect the economy, politically Labour has blundered by not responding to popular anger at what the speculators have done. Gordon Brown and Alistair Darling should have been on TV thundering that they would stop any bank taking public money from paying a penny in bonuses. MPs should have imitated the US Congress, hauled in CEOs and shamed them. The Serious Fraud Squad should have gone into the City.

What applies to the private sector applies equally to the public. Council tax will rise by three times inflation this year, after all but doubling under Labour. Councils will struggle to meet the cost of social breakdown. To maintain support they need to assure their residents that they will watch taxpayers' money with puritan fanaticism.

The junkets and non-jobs must be scrapped and resources concentrated on front-line services. So must the pay packages that give municipal functionaries higher salaries than the prime minister. In banks, Whitehall or town halls, anything goes in good times. As long as the money is still flowing, few care about extravagance. When the climate turns colder, everyone cares - and private gain at public expense becomes intolerable.