Posted by Jake on Sunday, February 13, 2011 with 5 comments | Categories: Article, MP, pay, politicians, taxation
Having been knocked back by public outrage over many of their brethren’s fraudulent expense claims over the years, Members of Parliament have just come up with a new tactic to justify cutting the strings of the public purse. Their spokesman has stated that they should be more liberally provided for to help the poor, those who have to care for relatives, and to fight child neglect.
"It would be a tragedy if the implementation of an expenses scheme were to have the effect of inadvertently and unnecessarily limiting access to the role of MP for those with young families, caring responsibilities or other challenging personal circumstances."
They argue that to encourage all these people in these "challenging personal circumstances" to become MPs, all MPs' expenses regardless of circumstances should be more liberally forked out.
While Britain has seen shortages in teachers, nurses, policemen, scientists and engineers, never in the recorded history of these islands has there been a shortage of politicians. However, in a profession where supply is wildly greater than demand, as can be seen by the unseemly scrabble first to get selected by a constituency party and then to get voted in by the electorate, MPs have over the last two decades persuaded us that they deserve more money. Not that they wouldn’t do what they do without it, because they do what they do because of their public spirit, but they just plainly and simply deserve the cash. And that it would be unseemly, and would be a national embarrassment on the international stage, if the rulers of the United Kingdom had to live a less than well padded lifestyle.
The objections to all this are not simply based on a certain queasiness at the MPs helping themselves more and more liberally to public funds, but on the more basic reason of what MPs are for. MPs arguing for better pay, and their sympathisers, are forgetting that MPs are not our rulers but are our representatives.
There was a time when MPs were men of substance, who like a country squire would look down on the populace and decide what is best for them. But those were men emerging from centuries of feudal rule. Their ‘substance’ was not earned by plying their parliamentary trade in Westminster, though in many cases it would have been augmented there. Today, it is not the MPs purpose to sit at the high table as one of the masters looking down at the masses. It is his purpose to sit at the high table representing the masses. The masters and the masses treat him with respect because of what is in his vote bank, not his bank account. The MP shouldn't be there to merely sympathise with the interests of his constituents, but to have the same interests as the voters who sent him there. The impact of Parliament’s decisions should affect the MPs in the same way as it does the population.
Which, of course, means that in financial terms some MPs should live like nurses, some like GPs, and a few like CEOs. But if all MPs get a standard salary, how would this income disparity arise? Well, MPs are absolutely allowed to supplement their parliamentary incomes, and by their talents earn extra money to make that difference. The MPs register of interests shows their remunerated positions.
Looking back a few years, from the April 2008 register, members’ interests include
- BLUNKETT, Rt. Hon. David (Sheffield, Brightside)
- Weekly column for The Sun newspaper commencing 3 August 2007 (renewal of contract). (£101,000-£105,000)
- CABORN, Rt. Hon. Richard (Sheffield Central)
- Consultant to AMEC; construction in the nuclear industry. (£70,001-£75,000)
- Consultant to Fitness Industry Association; trade association for fitness industry. (£10,001–£15,000)
To their credit, Blunkett and Caborn are among the MPs who actually state how much they make from their remunerated interests. There are others who were more coy about how much they are paid for their hobbies.
- CLARKE, Rt. Hon. Kenneth (Rushcliffe)
- Deputy Chairman (non-executive) of British American Tobacco PLC.
- Director (non-executive) of Independent News and Media (UK). Independent News and Media plc.
- HEWITT, Rt. Hon. Patricia (Leicester West)
- BT Group plc (non-executive)
- Special consultant, Alliance Boots Ltd. (£45,001-£50,000)
- Senor Adviser, Cinven. (£55,001-£60,000)
However, a quick look at the annual reports of these companies provides an insight.
- The BAT annual report for 2007 reveals that “with effect from 1 January 2007 as follows: Deputy Chairman (also the Senior Independent Director) [was paid] £165,000”.
- The 2007 Independent News and Media annual report states that “K Clarke (appointed to the Board on 14 June 2007) received total remuneration of €65,000 for 2007.” Having been appointed mid-year this presumably represents something like half what he would receive in full years.
- The BT Group annual report for 2008 reveals “The basic fee for non-executive directors is £60,000 per year.”
So long as they declare the interests that pay them, MPs are fully allowed to take money – and many of them openly and enthusiastically do. The argument is not that we should pay MPs well enough that they don’t need to take money from special interest groups, because they are allowed to take such money in any case. Banning this would mean money would move from over the table to under it, where conflicted interests would be more difficult to spot. The argument is that allowing this enables MPs to occupy the income brackets all the way to the most elevated, providing a truer cross-section of the electorate.
Regardless of their paid hobbies, which suggest they have more free time than many of them claim, MP’s basic salaries have grown vigorously over the decades. The strategy seems to have been to take the pain, or more accurately the gain, in occasional bucketloads. For most years, salaries go up at around inflation – sometimes a little more, sometimes a little less. But every now and then a major payrise is slipped through. And there is a certain correlation with changes of government – perhaps to cement members’ loyalty, and perhaps to give the losers’ generous final salary pensions a little filip.
- In 1979, when the Labour government fell, MP’s salaries went up by 37% when the retail price index (RPI) measure of inflation was 13.4%.
- In 1996, the year before the fall of the Tory government, MP’s salaries went up by 29.6% when the RPI was 2.4%
If an MP’s 1975 salary, of £5,750, had simply matched the RPI inflation, then in 2007 it would be £34,801 rather than the actual £60,675.
But in terms of vigorous growth the MP’s salaries have been far outstripped by their allowances. An MP’s allowances in 1975, of £3,200, would have risen by 2007 to £19,367 if RPI inflation had been applied – while the actual 2007 figure is £90,505.
The purpose of the MPs salary is to ensure that even those sectors of society who are unable to fund their representation will still have it. MPs should be paid a salary for their employment as an MP, which should be set to the national average wage – something around £25,000 a year. MPs are already allowed to supplement these salaries by other remunerated roles, as can be seen from the register of interests. As for their other costs, MPs are by no means in an unusual position having to work away from home and run offices. Tens of thousands of people working in the private sector are posted away from their homes – be they travelling salesmen or company executives. The mechanism for supplying such people is well established, well proved, and vigorously policed by the taxman – nothing like what is offered to MPs.
Does an MP’s salary need to be raised because there is an insufficient number of people wanting the job? Clearly not, as supply has always exceeded demand. Or else, does it need to be raised because the calibre of people who do apply is to low? In 1993 an MP’s basic salary was £30,854. This was about the same as a 1993 mid level ordinary teacher’s salary on ‘spine point 23’ (the teacher’s scale ran from spine point 1, £22,404, up to spine point 51, £50,682). In 2008 MP’s basic salary was £61,820 – off the ordinary teachers scale entirely. I leave it to the reader to judge whether our current batch of MPs are ‘off the scale’ in terms of quality compared to those of 20 years ago and before.
When MPs salaries were first introduced in 1911, Lloyd-George made clear what its purpose was. "When we offer £400 a year as payment of Members of Parliament it is not a recognition of the magnitude of the service, it is not a remuneration, it is not a recompense, it is not even a salary. It is just an allowance, and I think the minimum allowance, to enable men to come here, men who would render incalculable service to the State, and whom it is an incalculable loss to the State not to have here, but who cannot be here because their means do not allow it.”
The great majority of MPs already do little more than vote according to their party’s instructions. According to The Public Whip website, which keeps track of such things, the number of MPs who voted against their party more than 5% of the time was as follows
· Labour - 0 out of 254
· Conservative - 25 out of 305
· LibDem - 7 out of 57
Figures for the previous parliament, 2005-2010, show that the few rebels tend to be in whichever party is in power
· Labour - 31 out of 349
· Conservative - 5 out of 193
· LibDem - 0 out of 63
The obedience of our MPs is currently held by the honour of belonging to the most exclusive club in Europe, and for some by the hope of promotion into ministerial office – both of which are in the gift of their party. The voting figures show that it is a very rare MP whose courage will rise to risk these honours. If their obedience was also held for fear of their party taking away their pay and perks, by deselecting them, then we will have surely arrived at a bought and paid for democracy. Effectively a feudal system, no different to medieval kings granting lands and revenues to their nobility – confiscating and reallocating at the party leader’s whim. And there is perhaps no greater rip-off than that abuse of democratic trust.