Hypocrite Humphrys’ bonus bunk

John Humphrys was sounding pleased with himself on the Today Programme the other day. Nothing unusual there, you might say. He was attempting to skewer a minister because civil service managers at the UK Border Agency were being paid a bonus.

At first hearing it seemed as though they were each getting in excess of £300,000 for doing their own job. It was only on careful hearing that it became apparent that the figure was the total bonus pool and that the bonuses amounted to little more than £10,000 a piece.

The justification for the payments was that they were clearing up the chaos of immigration files left by predecessor organisations. The proper line of questioning was: why did the Government manage its affairs so poorly? But the thrust of the interview was that here were public servants pulling one over on the taxpayer.

The hypocrisy is breathtaking. Today Programme celebrities can pull in that sort of money in a few – probably very few – speaking engagements. Their celebrity status has been earned at the licence payers’ expense. Their employer, the BBC, has itself become notorious for excessive salaries to senior managers who work in an organisation largely protected from commercial risk. It also blows millions on Ross dross TV.

The tests, surely, of whether bonuses or large salaries are acceptable are: (1) is the activity being rewarded desirable and (2) are the salaries determined in a free labour market?

Apply these tests to the UK border agency and the answer is that they bonuses are probably reasonable. If we apply them, by contrast, to the salaries of Chief Executives of councils then there is an element of doubt.

The tabloid press (itself prone to pay some very large salaries) suggests that no public servant should be paid more than the Prime Minister. This is superficially attractive until you remember that the majority of a prime minister’s earnings come after he or she leaves office. Blair, despite or because of his treachery over the Iraq War, is earning millions. So the comparison is disingenuous.

Apply the tests: is it desirable to have competent people running councils? Yes: a badly run council can literally kill people. Is it a free market? Probably not free enough. Councillors who set these salaries check what their main rivals are paying. Their main rivals will then do the same when they in turn come to set salaries and so remuneration levels tend to get bidded up.

And bankers? Apply the tests again. Desirable activity? Definitely not: by all means spend all your time in a casino but don’t come and demand a subsidy from me when you lose all your chips.

Is the market free? The bankers’ bonuses are affordable all and only because of state intervention. So letting them keep even 25% of their 2009 bonuses is far too generous.

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8 Comments

  • This piece is downright offensive. Are you seriously suggesting anyone at this border agency deserved a penny in bonus of any kind? What for – imprisoning innocent children in inhuman circumstances maybe? Whatever you think of John Humphrys, you can’t possibly expect to use him to justify the obscenity of the way the UKBA is being congratulated.

  • I’m not usually given to using invective on here, but John Humphreys deserved a bonus for his skewering of that oily little twerp Phil Woolas in the interview in question.

  • Dene Bebbington 14th Dec '09 - 6:12pm

    It’s a shame we don’t get to find out how much Humphrys is paid so we can know if we’re getting good value from him.

  • Matthew Huntbach 15th Dec '09 - 9:02am

    I agree with Chris White. In the newspapers recently there have been articles, sometimes next to each other, one telling us we must pay senior bankers these huge amounts because it is necessary to attract talent, the other expressing outrage at the amounts paid to senior staff in public service – which are a fraction of what the bankers are getting.

    If we are to believe what the bankers say, then surely paying public servants such amounts must mean these jobs are filled only with incompetent people. Why do the bankers feel that their jobs must be the ones filled by the most competent people and other jobs left to the rest? Are there no cases where putting a really competent person – the sort of person the bankers say must be paid in the millions to be got to do a good job – would, if placed in public service, more than earn his or her keep by finding ways to allocate resources more efficiently just as those top bankers do when they make their investment decisions? So, by the very argument the bankers use, should we not tax those bankers more in order to pay public servants more in order to even out the talent distribution? By the very argument the bankers use, in the long run this attraction of talent will save money, allowing us to reduce taxation on those bankers.

    Regarding Mr Ootam, as he was a “consultant”, this means he is not a public servant, but someone in the private sector. So, by the very arguments people like the bankers use, he must have this magical “private sector know how”, and must be so much better than someone earning smaller amounts doing the same job on a government salary.

    Regarding the Borders Agency, more competent staff there would reduce all those sad cases where people have been here illegally for years and are finally caught up with. The great problem here is that there are hundreds of millions of people across the world who live horrible lives, and yes many of them are children or have children, who would lead much more pleasant lives if they were living here. So should we invite all of them to come and live here? Many of them would be better and more hard working than many resident British citizens. So, is it the main job of the British government to safeguard British citizens, or is it the main job to make life better for people across the world, and to provide the bankers based here with whoever it is across the world will do the menial service jobs required by the banking industry most competently at lowest cost?

    I have asked this last question many times now of people here who argue we should have few or no immigration controls and have yet to get a straight answer. I did not mean the question to be rhetorical.

  • Mr Huntbach, which part of the article do you specifically agree with? Clearing backlogs would seem to be part of people’s job, not something extra deserving a special bonus. With Gordon Brown refusing to answer questions in PMQ after PMQ, I am glad we have some like Mr Humphrys prepared to ask the difficult questions.

    I just wish we had politicians prepared to answer questions. Perhaps we would have less disasters in the political world.

    When McCain was rising, he was attracting followers because of his straight-forward approach. Later he got sucked into the party machine and mindless attacks.

  • Matthew Huntbach 18th Dec '09 - 1:55pm

    Voter


    Mr Huntbach, which part of the article do you specifically agree with? Clearing backlogs would seem to be part of people’s job, not something extra deserving a special bonus.

    Yes, and choosing the best place to invest money would seem to be part of an investment banker’s job, not something deserving a special bonus. So should there not be a call for all of those City people getting bonuses to say exactly what it is they did over and above their normal job that leads to them deserving such things?

    My point, I think, is reasonably clear. There seems to be a huge discrepancy between what we are told on paying people who do bureaucratic jobs administering where resources go in the private sector (which is essentially what bankers do) and those doing bureaucratic jobs administering where resources go on the public sector. With one lot, we are told they must be paid huge amounts and bonuses almost as a standard, otherwise we will lose talent and we will all suffer. With the other lot, we are told it is outrageous that they are paid much smaller amounts, and the amounts they are paid should be cut.

    Now, you will probably reply, the public sector is paid from taxes and the private sector is paid voluntarily by those who choose to use them and pay their fees, so there is no comparison. It seems to me, however, that the distinction is becoming increasingly artificial. Government is becoming more and more hemmed in as to what it can do because of the power of global finance. It is just not possible to opt out of it. The infrastructure we live in means the basics of life must go through these City financiers. So the way they rule us and make us pay for their services is no so different from the way government does.

    So why the big discrepancy in the way the two sectors are treated? Why is so much media commentary so sided to the idea the private sector lot must be paid more and more and the public sector lot less and less? Because the private sector lot control the media? And, since they are now the major source of funding for all political parties, control those who run the public sector lot as well?

    I am increasingly coming to see that to make the big distinction, to baah “private sector good, public sector bad” as the so-called economic liberals do, is to make a distinction which is largely artificial. The City of London financiers are as much “the state” as the Westminster government. We rely on both because things are tied up in that way, and our ability to influence both is very limited.

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