The Independent Parliamentary Standards Authority (Ipsa) just proposed a rise of MPs’ annual salary to £74,000, from the current £66,396.
This is a stupid idea. The MPs should be paid a lot more. In the private sector, and even in most NGOs, it’s well understood that if you want to attract high quality workers, you need to pay them higher salaries.
The UK government budget in 2012 was £682 billion. The UK civil service employs 6 million people. There are 650 MPs in total. So a crude estimate is that, on average, each MP controls a budget of over a billion pounds and directs nearly ten thousand people (of which a significant portion are heavily armed). They also vote on regulations that affect the whole country. Only in public service would it seem sensible to pay people with that kind of responsibility, that kind of salary.
Some might feel that increasing MPs salary may reduce their commitment to public service, or cut them off from the concerns of the people they serve. But £66,396 a year already cuts them off from most people, and I haven’t seen any evidence that their current lower salary is causing an irresistible stampede of public minded individuals to swarm parliament.
There are a few complicating factors that make being an MP still quite attractive- unlike most of the population, MPs can and apparently frequently do, have lucrative second jobs- eg Gordon Brown earned 1.7 million this way last year I believe. No doubt their experience as an MP enhances their earning power in these roles. Likewise, it is likely to set one up well for a future career in a number of fields.
Secondly, the figure under discussion is just the back bench rate. It’s not like the structure is that each MP is handed a portion of the country to run.Those who do actually manage the sums and people you mention above (ministers etc) earn more than the basic MP salary (£135k).
Thirdly, everyone always looks at the salaries of bankers and so on and feels hard done by but on objective measures like average salaries nationwide, backbench MPs don’t do too badly, see http://www.thisismoney.co.uk/money/article-2269520/Best-paid-jobs-2012-Official-figures-national-average-UK-salaries-400-occupations.html. Their current rate puts them above the average – ministers earn more than the average CEO according to this, and MPs more than other managers and directors
Finally, there is a bit of a stampede to get into parliament. People are actually working for free for MPs for months or years as graduates to try and get a foot in the door. Usually we pay more for jobs where there is either a) a shortage of people wanting to do it or b) other people who have the skills to do it have other options you need to match financially. I think we are looking at b). Given that parliament does include ex bankers, lawyers, Drs and businessmen, I suspect they are already getting something (possibly financial benefits in a broader sense) to entice them in (of course there are doubtless be some more out there who are put off, but given that we could never pay MPs a salary to match say being Philip Green or Richard Branson a balance has to be found somewhere).
Noone ever thinks they are being paid enough. But given that back bench MPs are basically employed to represent the people rather than to in any meaningful sense direct them, they probably are. Whether the economists etc who actually prepare the policies are is another matter.
Thanks for that analysis. I think you raise very valid points, and I’ll think them over; it is possible that, eg, the prestige of being an MP is a major incentive that isn’t captured in their salaries.
One thing I didn’t go into was the type of people MPs often socialise with (generally quite rich people), and whether the salary difference has an impact. I’m not thinking out and out corruption, but just the fact that MPs interact with jet-setting type people, and the only way for them to take part is to accept implicit or explicit gifts from these people.
Overall an excellent point. I also agree that there are perhaps other complicated incentives at play. I can’t help feel that our democracy would benefit if MPs were better remunerated and perhaps more restricted in terms of their engagement with other activities. This is a circumstance where we run into a conflict between what would benefit our political system and the deep (and often irrational) attachment humans have to perceived fairness. There is ample psychological evidence to suggest that we often act in what we perceived to be the interests of fairness (specifically as it relates to us) rather than in our own best interests. Sometimes the same thing but not always (e.g. experiments where people will harm their own financial interests to ensure a competitor doesn’t recieve what they see as an unfair advantage.
Re Parliament: I wonder about, as well as increasing salaries though, helping to restructure and revitalise things like staffing allowances might be useful. It’s not uncommon for MPs “research assistants” to be referred to in contemptuous tones. I tend to feel that having more such people though would generally benefit the capacity of MPs to monitor the executive. Many of our parliamentary committees seem a little toothless compared to some in the US. The Public Accounts committee an exception as a result of the backing/information it receives from the National Audit Office. Clearly though we struggle to see knowledge among our MPS as desirable! At least if we have to pay for it.
Surely the problem is that much of the middleclass and above are paid far too much. BBC head of HR £300k+, GPs 100k+, chief superintendents £88+, professors £60+, local authority CEOs £250k+, FTSE CEOs £2m to £15m+, bankers infinity+ ……the list is depressingly long. MPs should try to set an example and use their powers to halt this runaway inflation. For decades they have been fuelling it with the absurd ’incentervisation’ argument, or in other words, ‘how to pay someone far too much for doing their very enjoyable job.’ Given that the present state of the economy has much to do with failure of MPs from all parties to regulate and govern responsibly, I am at a loss why you think such incompetence should be rewarded with an even higher salary. High salaries have not improved performance in any other industry or profession (in most cases quite the opposite), so why not pay less and see what happens?
What about ‘performance-related’ pay, e.g. paying them some multiple (or fraction!) of the median income? Or perhaps giving bonuses if life expectancy goes up, or GDP or GDP per capita goes up, or the Gini coefficient goes down or national happiness goes up?
What also might be a good idea is some kind of optional or compulsory training in statistics, scientific method, etc. (http://www.bbc.co.uk/news/uk-19801666)
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