UNION leaders and local MPs today condemned a 21 per cent pay rise awarded to the boss of the combined Norweb and North West Water utility giant.

Sir Desmond Pitcher, chairman of United Utilities, was dubbed the new "king of the fatcats" after being paid a massive 21 per cent pay rise, taking his earnings to £346,000 despite the company announcing 1,800 job losses earlier this year.

He will be paid a basic salary of £310,000 this year compared to £255,000 in the last financial year.

Sir Desmond also received bonus payments of £76,700 last year and taxable benefits of £13,900, both increased on the previous year. But he insisted that his bonus should be limited to 30 per cent of his salary although he was entitled to 40 per cent.

Chief executive Brian Staples is also being given a huge salary rise from £235,000 in the last financial year to £300,000 in the current year.

His total remuneration was £380,700 in the last financial year compared to £311,400 in 1994/95, it is disclosed in the company's annual report.

United Utilities, formed last November when North West Water took over its neighbouring power company Norweb for £1.8 billion, is cutting 1,800 jobs by integrating the two operations.

The company, which paid its staff rises of between 3 per cent and 4.5 per cent last year, said the salary boost for the two executives reflected the increased responsibility of their jobs following the merger.

Blackburn MP and Shadow Home Secretary Jack Straw stormed: "These increases are no longer a surprise but they are wholly insensitive given the large number of people losing their jobs because of the merger.

"The directors are going to reap a whirlwind eventually from treating their staff and consumers with contempt."

Rossendale and Darwen Labour MP Janet Anderson said: "These rises are scandalous and appalling. The directors have absolutely no concern for consumers or staff.

"There is no evidence that service standards have improved so they are just lining their pockets without any justification."

The firm said that salaries of some directors had been adjusted to "reflect increased reponsibilities in the enlarged United Utilities Group".

It said it was proposing to introduce a new remuneration scheme heavily linked to performance.

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