November 12, 2021 - 7:00am
MPs earn fairly well: £82,000 a year, roughly the equivalent of professionals such as headteachers or senior doctors, albeit not very much compared to most senior lawyers. But, as we’ve been seeing in recent days, many of them top that salary up with second jobs which can lead to real or perceived conflicts of interest.
I idly wondered the other day whether paying MPs a lot more, but banning them from having second jobs, would be a good thing. This made a lot of people very angry. But I am interested in the question.
Banning second jobs seems the main thing, although no doubt there would be knock-on effects; but it’s the pay issue that interested me. Whether increasing MPs’ pay would “work” seems to me to be two questions: one, whether it would attract a higher-quality calibre of applicant; and two, whether it would reduce the level of corruption.
My cousin and co-author David Chivers, an economist, looked at the economic literature to see if there’s much support for the idea that higher wages for MPs would improve the situation in either of those ways. He was sceptical. On the “better-quality candidates” point, he notes that wages are probably not the main factor in people’s decision to go into electoral politics. Also, he says, it’s not just the salary but the risk — you are in danger of losing your job every four years or so, and if you leave a well-remunerated career like medicine or the law, a four-year break can really hit your earnings.
And in terms of reducing corruption, he says that depends on the nature of corruption, and adds that a lot of the problem is actually former MPs and ministers in a “revolving door” between politics and lobbying: they leave office and immediately go into some lobbying company which is keen to take advantage of their contacts.
I suspect he’s got a point, and others agree. But I also wonder: is it a bet worth taking anyway?
Owen Paterson, the MP whose suspension for lobbying started the whole row, was being paid by Randox, a healthcare company. Randox won government contracts for £500 million. We don’t know whether they would have won them anyway or how much of the money is wasted, but that’s the headline figure, and it’s down to the apparent corruption of one MP, out of 650.
Increasing the pay of all MPs by 50% would cost the state about £26,000,000, roughly one-20th of the value of the contracts awarded to Randox alone. If there’s even a remote chance that it might reduce corruption slightly, then the expected value is highly positive.
Similarly, if there’s even a small chance that increased pay would improve the calibre of MP candidates, then since MPs are responsible for decisions about the UK’s one-trillion-pound budget — 38,000 times as big as the sum required to raise their salary by 50% — then it seems like a decent bet. If improving MPs’ wages by that much raised GDP by 0.001% it would pay for itself. Or, in expected value terms, there was a 1% chance of it raising GDP by 0.1%, then it would be a worthwhile bet.
Of course, if you think there is no chance that increased salary would improve MP quality or reduce MP corruption, then you’d disagree that the bet is worthwhile. Or if you think that there is a moral quality to salaries, and that it is wrong to pay MPs so much when more obviously sympathetic figures like nurses are paid less, then you might reject the whole framing. But I think it’s worth at least thinking about.
(That said, there’s almost precisely zero chance that the public would go for it anyway, so maybe it isn’t.)
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SubscribeDo we really want to have only career politicians with no experience of working life outside of Westminster? Are Labour MP’s paid by the Unions any different from Tory MP’s paid by lobbing firms? Why compare MP salaries with nurses when it should be against the obscene levels paid by the BBC (funded by the public) to their reporters and management staff?
The BBC problem could be solved by Govt. mandating licence-payers’ participation in an online vote on every salary settlement above say £100, 000. The Beeb already have our addresses and details for online payments, so I see no problem with verification.
Who misses Chris Evans from the Beeb today? Who would miss Gary Lineker?
One problem with this argument is that MPs are not responsible for the one trillion pound budget. They are simply there to push through the government’s program in the voting lobby.
The fact that some make contacts that enable them to have the chance to lobby to benefit some outside body or interest ,whether they are paid or unpaid for this, is down to their contacts rather than their being MPs.
To pay more simply attracts more venal chancers it doesn’t address the problem.
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I’d like to recommend ‘Why we get the wrong politicians’ by Isabel Hardman.
It really is a terrible job. Big investment to buy-in; no power as a back bencher; no security.
The point that strikes me is that in most professions you only get sacked if you do something almost criminally bad. As an MP you get sacked by the voters if your party leader becomes unpopular, or the economy gets a chill, or something else you couldn’t have foreseen or controlled.
You’d be mad to want to do it.
No security? Are you kidding? Once elected they’re on a five year contract. Who else do you know who has one of those?
Furthermore, they get a final salary that accumulates at 1/40 i.e. 5 years’ service gets them a pension of 1/8 their final salary. Yes, serve one term and you get a pension of £10,000 a year indexed for life. How long would it take to earn that in a DC scheme?
Oh, and if they lose their seat they get redundancy. You read that right: at the end of a 5-year contract, if not renewed, they get about £30,000 as a payoff. Any contractors we know get that?
And if they retire early through illness they immediately get the entire pension they would have got had they served as an MP till the age of 65. So if elected at 35 and they then retire ill at 36, they’d get a pension of 30/40ths of their MP’s salary and they get it right away for life. If they recover and go back to work, they keep that pension.
So enough of this tripe about security. Look past the headline salary and at the racket they’ve constructed for themselves.
How often does a barrister, headteacher, doctor or chief constable get struck off or sacked? Do they ever get sacked because the head of their profession made a bad job of it?
Generally not – and most MPs don’t either.
However, some will have to consider more performance-managed employment until their next £500k meal ticket is allocated in 5 years time.
Absolutely – try getting a job in the private sector that virtually guarantees £500,000 however incompetent or unproductive you are over the next 5 years.
It appears that even threatening to throw “battery acid in someone’s face” allows you to keep claiming the rest of that £500k …
Quite. An MP who serves for 5 years collects a pension of £10,000 a year for probably about 20 years. That’s £200,000 of pension entitlement for five years’ service.
Add that £200,000 in indexed pension onto their MP’s salary over the five years that it took to earn it, and suddenly, they’re not on £82,000 a year, they’re on £122,000. Yes, Fiona Onasanya, Diane Abbott, Angela Rayner and Claudia Webbe are on that sort of money.
I can’t agree that someone as thick as pig5hit on a 5-year contract followed by either a new 5-year contract or a £30,000+ payoff is, somehow, hard done by on £122,000 a year for part time work.
Agree. And disagree. Most – over half – MPs are in safe seats. As long as they keep their noses clean, they can decide when to go. In theory the electorate has a choice, but in those seats the other parties don’t make an effort anyway.
That’s why we get idiots like Prescott and bores like Chris Chope, who never seem to go away!
I didn’t know a lot of that and up to this point considered their pay a little low considering their positions. I’m now re-evaluating this position!
edit: not, not now – unfortunate typo.
I was stunned when I heard of it too, Andrew. It came to light during the expenses scandal, and a very neat swerve was done by MPs whereby their property scam was given up, but the real juice was kept.
In fact, even the property scam soldiers on in a way. They no longer get their second mortgage paid, but instead, they get a rental allowance. Of course, what two chummy MPs can then do is each buy a flat and then let their flats to one another at whatever the rental allowance is.
It would appear that being an MP is a part-time job, judging by the amount of extra-curricular work that so many of them do. So rather than paying them more to do this one non-job, I suggest not paying them at all. This would remove the fear of losing your job every 4/5 years. The analogy is with lifeboatmen, or indeed local government councillors, who are mostly volunteers with a sense of civic duty and day jobs. As with lifeboatmen, MP’s employers will be pleased to give them time off occasionally to go into the House to vote on something.
That’s the least part of it. MPs do a lot of letter writing for constituents. A lot of it should be done by councillors, or solicitors, or even CAB.
The ambitious MP needs to serve on committees, lots of them, and they take time.
OK, let’s say the job description is flexible. Pay them pro-rata, ranging from zero (plus expenses) for occasional volunteers to, say, £100k for full-time saddoes who like to spend their lives on committees
It would be a terrible idea to pay £100,000 to those that served on Committees. It would give even more power to the party manages to reward reliable party apparatchiks by manoeuvring them on to committees and give incentive for them to tow the party line. It certainly wouldn’t be payment for any useful result.
The enormous sums made by Geoffrey Cox through his part time legal work suggests that to attract able people who wanted to replace what they could earn outside parliament with a decent parliamentary salary would involve paying more than £1 million a year which would, of course, be absurd for what an MP actually does. A lot of work they do is not essential to the job but simply taken on to enhance their prospect of re-election. In a safe seat the MPs concerned could probably safely avoid doing any of it.
A lower or no parliamentary salary might actually attract those who had already made money and wanted simply to do their bit for the common good.
They have an office staff allowance. Those staff (often their own family) are the ones who reply to the letters.
Being an MP is not a job in the sense that most of us have a job where we are expected to turn up between particular hours and produce something or provide a particular service that we have some expertise in for our employers. Geoffrey Cox’s service to his constituents is in no way diminished because he is earning extra money as a lawyer rather than sitting on the backbench looking at his iPhone while others drone on. As MPs are not expected to display any special professional skill why should they be paid a professional salary for what can and often is a part time occupation. The problem is that Ministers have to be drawn from the ranks of MPs and ideally we want capable Ministers who do have skills and intelligence but boosting payment to MPs is not going to solve the dearth of Ministerial talent.
Their salary should be 110% of whatever their salary previously was before they were an MP.
This will mean unequal pay but then again they don’t all do the same job. Some MPs are Rishi Sunak but others are Fiona Onasanya.
My proposal means they all get a pay rise and don’t fall behind versus their peers who aren’t MPs. It also ensures that pig5hit-thick bigots like Diane Abbott and Jeremy Khorbiyn get roughly the dole, which is all they’re worth.
*Fiona Prisonasanya.
Make the pay be a fixed multiple of the median salary in their constituency. Which would mean that to earn more they have to raise the economic well-being of the community they serve…
I would like three rates of pay for MPs depending on them working at least 20, 40 or 60 hours a week. Electors will then know the time they spend as an MP. The rates can be £50,000, £100,000 and £150,000 so that talented people are not put off. It can be funded by eliminating all extra pay for higher office. That would remove the party leaders’ power of patronage.
It’s low pay compared with many professional services careers. It attracts people who can earn elsewhere in addition (Tories) or who can’t and for whom it’s far better than they would make any where else (Labour).
So we end up with wealthy business Tories and mediocre labour MPs.
Which is why the Tories keep winning.
Political clout = power, power = leverage, leverage = money.
MPs should be paid more like lawyers than doctors because they have a risky job and lots of responsibility. Their skills should not be underestimated – how many of you would want to do what they do? However, bigger salaries will not diminish the “extras” that they can command – refer to my first sentence.
Too many of them are currently unsackable.
Good wages should be paid until a person clearly demonstrates obvious inability to execute what they were recruited to do.
Put a wage cap on parliament as a whole – and let the best take the most.
Some should be paid a lot – others like those listed above – should pay us for their inadequacies.
Lawyers are paid a lot because ordinary mortals need them to read the laws MPs pass. If you paid MPs more would they pass laws that ordinary people can follow and apply in agreements without lawyers or would they make them even more impenetrable (and ambiguous).