LibLink: Stephen Williams on MPs’ pay

MPs’ pay is in the news today with suggestions that IPSA may agree a 10% or even a £10,000 increase, while other public sector pay remains frozen. Stephen Williams writes

IPSA was created in the aftermath of the furore over MPs’ expenses four years ago. It sets the terms of Parliamentary pay, pensions, budgets for staff and office costs and MPs’ personal employment expenses such as travel and accommodation. We MPs have absolutely no say in any aspect of the regime, including our salary. So MPs (nor meddling party leaders) cannot instruct IPSA to set MP pay at any particular level.

I suspect however, that even if MPs have no say in any increase, they will still be blamed for it. And is that completely unfair? MPs are, after all ultimately for everything government does. Giving the pay decision to an independent body is surely far better, more honest and transparent than voting on it yourself, but you will still be blamed when that independent body makes an unpopular decision.

What’s to be done? If IPSA award say a 10% pay rise, MPs will be in a very awkward spot. No doubt the three party leaders will demand that that IPSA is ignored. But that would destroy the case for an independent body. Personally, if my pay rises by more than the rest of the public sector, I will donate the difference to charities.

But if I could make a suggestion to my IPSA paymasters it would be this – don’t make any substantial changes until the day after the next general election. There’s never a good time to change MPs’s pay but immediately after an election removes any hint of vested interest. Pay could be set for the entire 2015 – 2020 Parliament and not changed again for 5 years.

Nick Clegg has called the expected increase “impossible to explain“.

Here’s the problem. There is clearly plenty of competition to be an MP. Elections are contested. Selections are contested. This would probably still be true if MPs were paid nothing. In any other field an employer could argue that if there are plenty of capable candidates, then pay is high enough, or too high. When it is argued (correctly) that we would not want a situation where only the independently wealthy could be MPs, this is arguing for MPs’ pay to be set according to a different standard to that of everybody else in a competitive economy.

* Joe Otten was the candidate for Sheffield Heeley in June 2017, is a councillor in Sheffield and is Tuesday editor of Liberal Democrat Voice.

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36 Comments

  • Russel McPhate 1st Jul '13 - 4:14pm

    For years M.P.’s pay was artificially supressed in order to curry favour with the electorate but with the knock-on effect that expenses claims were inflated to make up the difference. It was therefore inevitable that, at least in the short term, an independent body would see the role as worth considerably more than was being paid. It is. This is infinitely preferable to paying by the back door through dubious expenses claims. M.P.s must now take care not to undermine that system.

  • “For years M.P.’s pay was artificially supressed …”

    £66,000 doesn’t seem too bad for a job with no set hours – traditionally treated as part-time by many – and no formal qualifications required.

  • David Wilkinson 1st Jul '13 - 5:21pm

    We could always stop their pay for the 1st seven days of being an MP

  • “For years M.P.’s pay was artificially supressed …”

    That’s simply not true. Before the expenses scandal broke MPs salaries had risen significantly beyond the rate of inflation in the previous years. If you think that 66k per annum is a suppressed salary then I’m afraid you’re living in a bubble that has no connection to ~95% of the population (£68.5k is currently the 95th percentile of UK income – MPs of course end up getting more than the 66k thanks to their ‘expenses’).

    Can anyone explain to me why an MP already gets paid twice as much as a teacher at the top of their salary scale (or what was the salary scale before it just got abolished) given their job is far less stressful, time-consuming and taxing?

  • David – LOL.

    An excellent idea. Because the first seven days of being an MP should be spent serving your constituents not filling in forms to claim money.

    (Though having set up an MPs office if you only spent 7 days trying to get basic things sorted out it would be good. I think we were two weeks without fixed phone lines and broadband and running everything of the staffs mobiles and internet dongles! It’s as much populist bollocks as George Osbourne saying the same thing)

  • Most employers are unable to pay people what they are worth at this time and employees are having to settle for what the employer can afford. MPs should be no different to the rest of the public sector and should be limited to 1%

  • Change their terms of employment to limit moonlighting. Lack of proper representation and a political class captured by corporate and union interests is the real scandal.

  • Well said Steve Way. Who couldn’t argue that many paid from the public purse don’t deserve more? why should MPs be the only ones to be the beneficaries of setting salaries under such considerations? I dare say that nurses and firefighters might make the case that we should be fair to them too…

  • So this is a cunning plan to massively increase the pay differential between MPs and their staff. That’ll make for happy offices then won’t it?

  • Re MP’s wages They are already paid well and often upon leaving and some whilst a MP earn big £ for consultancy or role on boards of company. So if MP a proper Job No second Job should be allowed might help convince people to accept a rise. My view is wages of those at the top in business an public service are madly out of kilter My answer would be ALL Wages should drop and no one earn more than say 100K no matter the position they hold the poor are set £5.75 a hour MP wage increase adds up to a years money of someone at bottom that’s madness and a MP wage now is 5 or 6 times greater all madness. Ill give example I know someone in greater Manchester employed by the council on 70K plus and by his status’s on FaceBook takes 4 + holidays a year madness

  • Andrew Suffield 2nd Jul '13 - 12:06am

    £66,000 doesn’t seem too bad for a job with no set hours – traditionally treated as part-time by many – and no formal qualifications required.

    As a rule, any MP could earn twice as much in private industry (even the incompetent ones). The good MPs could earn hundreds of times as much, and often go on to do exactly that.

    You’re making the mistake that most people make with jobs like this. You’re asking whether the money is “fair compensation” for the work put in. That is not how the job market ever has worked or ever can work. Nobody is – or can be, in a relatively free-market society – paid on the basis of how hard it is for them to do the job. People are paid on the basis of how much it takes to keep them from finding a new job with somebody who will pay them more. It is, in simple terms, a market. That’s also why this “median wage” stuff is nonsense – it’s an arbitrary calculation that somebody’s concocted to justify the answer.

    We pay MPs massively less than they could get in private industry. They mostly continue doing the jobs they are doing. That tells us that we’re not in any urgent need of increasing how much we pay them, and we’ve probably got it fairly close to the right amount. If we never allow it to increase as the job market shifts, then eventually (probably decades into the future) it will be very hard to convince anybody to take a job as an MP. So some modest level of regular increase is justifiable. Getting the numbers right is hard. Overall, the amount that we pay MPs is objectively inconsequential to the general public because it is a tiny tiny fraction of the national budget – the obsession with MP’s pay is irrational, as with so many other things in politics. We should spent less time talking about it and more time talking about where we’re spending the health, education, and benefits budgets.

    (There is one other possibility – that there is a massively more capable group of people out there who could do the job of our MPs with far more ability, but which have never been willing to go into politics because the money’s lousy compared to almost anything else. I don’t think this is the case, but I can’t prove it’s not.)

  • Matthew Huntbach 2nd Jul '13 - 12:18am

    Chris

    £66,000 doesn’t seem too bad for a job with no set hours – traditionally treated as part-time by many – and no formal qualifications required.

    Well, it’s about half as much again as I get paid, but I regard the salary as a serious disincentive to considering it. I wouldn’t want to throw away my career for a job that might be taken away from me by my employers (i.e., the electorate) five years later, and the unsocial hours and sheer amount of work of an MP’s job, if done properly, is very offputting. I’ve had a taste of it through being a councillor, and I know just how much time is taken up by the paperwork, as well as constituents’ case-work. If I were to do the job, I would certainly want to spend a lot of time on reading and research and gathering evidence. Anyone who think all MPs do is turn up occasionally in the main chamber is wrong.

  • A Social Liberal 2nd Jul '13 - 12:58am

    Mathew Huntbach

    ” I wouldn’t want to throw away my career for a job that might be taken away from me by my employers (i.e., the electorate) five years later”

    . . . . . and yet those same MPs in the coalition have condemned thousands of public sector workers to exactly that fate, making them redundant and forcing them into a workplace where all too often the only jobs available are low paid, contract, part time or zero hours contracts.

  • Eddie Sammon 2nd Jul '13 - 2:50am

    We need to be discussing the value of remuneration packages, not overly simplistic “pay”. Ed Miliband is right on this one – they should receive a 1% rise in line with the rest of the public sector. IPSA should be scrapped – there is no such thing as “independent bodies”, because ultimately they are put in place by politicians and the managers are also recruited by them.

  • It is disappointing to read so many contributions reflecting the increasing spirit of meanness in our nation. It has become axiomatic that everyone else’s increase in salaried income is undeserved. What has happened to us?
    I don’t know how many contributors actually know what an MP does for the £66k but working away from Home often until 10pm for 4 days , returning for the weekend surgeries, visiting facilities in the constituency and discussing means of promoting the local economy, attending party & public functions etc etc doesn’t leave much family time at weekends. Thank goodness for Matthew Huntbach.

  • MPs are public servants.

    Why should MPs get a pay rise when Osborne and the rest of the coalition ministers, including lib dems, are cutting pay in real terms for all other civil servants?

    It looks terrible.

    Funnily enough though, the arguments put forward by the independent commission are strong and fair, and clearly apolitical.

    Should all public servant pay be set by independent commission so as to prevent politicians unfairly using public servants pay as a scapegoat?

  • Andrew Suffield

    “As a rule, any MP could earn twice as much in private industry (even the incompetent ones). The good MPs could earn hundreds of times as much, and often go on to do exactly that.”

    I could earn more working for the private sector, probably with shorter hours, but. I hope you support a 10% payrise for research academics like me, rather than current below inflation increases.

  • @Andrew Suffield
    “As a rule, any MP could earn twice as much in private industry (even the incompetent ones). ”

    Really??? Have you ever worked in the private sector? Do you have any experience of it? In my industry, people who are vastly more qualified and experienced than MPs earn a fraction of that amount despite the jobs being mostly located in the higher-wage/higher cost region of the south east.

    Some of the comments above are just absurd. We’re being mean-spirited when criticising MPs for a pay award over ten times greater than other public servants who already get paid a fraction of their wages! I’m the only person in this debate who has actually put forward figures for where MPs salaries sit on the national incomes scale. To argue that someone already above the 95th percentile of income deserves a 10% pay rise at a time when millions of other hard-working individuals are living on the margins is deluded. Nothing more, nothing less.

  • Matthew Huntbach 2nd Jul '13 - 10:03am

    A Social Liberal

    . . . . . and yet those same MPs in the coalition have condemned thousands of public sector workers to exactly that fate, making them redundant and forcing them into a workplace where all too often the only jobs available are low paid, contract, part time or zero hours contracts

    And your point is? How does this relate to what I wrote? Is it supposed to be an attack on me based on the assumption that I am a supporter of Clegg and the Cleggies? Have I not said enough elsewhere to suggest I am not?

  • Dave G Fawcett 2nd Jul '13 - 10:04am

    Matthew Huntbach. ‘there (may be) a massively more capable group of people out there who could do the job of our MPs with far more ability, but which have never been willing to go into politics because the money’s lousy compared to almost anything else. ‘ True or not this appears to me to be a valid point. Surely MP’s are, in effect, the board of directors of Great Britain PLC and should be paid accordingly but no perks or expenses. After all if you pay peanuts you get monkeys!

  • “As a rule, any MP could earn twice as much in private industry (even the incompetent ones).”

    What a strange statement. What is the special quality of MPs that makes you think they could earn £130k in “industry” even if they’re incompetent? (I’m presuming you don’t think that of the population as a whole!)

  • Matthew Huntbach 2nd Jul '13 - 10:11am

    Andrew Suffield

    As a rule, any MP could earn twice as much in private industry (even the incompetent ones). The good MPs could earn hundreds of times as much, and often go on to do exactly that.

    They could? Where are those jobs paying £120,000+ you are claiming anyone who has the ability to become an MP could walk into? I spent twelve years as a London Borough councillors, six of them as leader of the opposition. Is this enough to qualify me to be an incompetent MP? If so, please tell me where some of the jobs you claim I could walk into are. I really would like to be earning that much, it is about three times what I earn as a university lecturer. Or, if being a successful leader of the opposition in a London Borough is not enough to qualify one as an MP, what is?

  • jenny barnes 2nd Jul '13 - 10:22am

    I doubt they could earn twice as much. They might get paid that – quid pro quo for favours received while in office doncha know… Exactly what is the market for ex Eton / Oxford PPE degree holders? It’s not exactly a STEM subject.

  • “As a rule, any MP could earn twice as much in private industry (even the incompetent ones). The good MPs could earn hundreds of times as much, and often go on to do exactly that.”

    If you look at the professional backgrounds of MP’s it is obvious this isn’t true. For instance 12% come from teaching or lecturing. For a significant proportion of MP’s £66k a year is a career high salary. As to their earning potential after politics while there are undoubtedly some former MP’s of great ability all too often we see people simply profiteering off the back of their “public” service, selling political contacts and insider knowledge, and getting payback for favours done in government.

  • “Surely MP’s are, in effect, the board of directors of Great Britain PLC ”

    Show me a board of directors that consists of 650 people. If your going to make an analogy to the business world then the cabinet might be described as the board of directors, but that’s all.

  • @Steve chooses the national income scale. What has that got to do with it? How about the comparative remuneration for Deputies in France, Germany USA etc? That is the only meaningful comparator. It would be interesting to calculate the rate/hour of an MP. But hey they are a good target aren’t they?

  • @BrianD
    “chooses the national income scale. What has that got to do with it?”

    So, you think that making a comparison of MPs salaries based on a comparison of their qualification, experience, and ability relative to other UK workers is meaningless, but comparing their salaries to equivalents in other countries is valid. Good luck trying to convince the electorate of that one, given German workers don’t pay MPs salaries, etc.

    Even from the point of view of neo-liberal market worship I can’t see the relevance of comparing salaries with officials in other countries. I don’t see many British people leaving the country to take up posts as German politicians because the pay and conditions are better. The only valid comparison is with British taxpayers as that is (a) exclusively who pays for MPs and (b) where MPs are exclusively recruited from.

  • Matthew Huntbach 2nd Jul '13 - 2:09pm

    Dave G Fawcett

    Matthew Huntbach. ‘there (may be) a massively more capable group of people out there who could do the job of our MPs with far more ability, but which have never been willing to go into politics because the money’s lousy compared to almost anything else. ‘

    It was Andrew Suffield who wrote that, not me.

    As a university lecturer, if I were to become an MP it would involve giving up my career. If I were to lose my seat, it would be very difficult to get back into my old job, things change quickly in my field, I would be out of date. As I have already said, the combination of job insecurity, pay not that much more than I already get, and unsocial working hours means I’m not interested in putting myself forward as a potential MP. Whether I could do a better job than existing MPs, I leave it to others to decide. On top of this, in our party at least, prospective parliamentary candidates are expected to put in huge amounts of voluntary work. Well, I couldn’t do that on top of my day job. My career has already been very seriously damaged by the years where I put my surplus energy into being a councillor rather than in the extra work which a university lecturer has to do to get on these days. I always worked my full contracted hours
    as a lecturer, but you have to work many hours on top of that to get the research done which is now essential in the academic world. Having been warned that my job was in danger because I was “research inactive”, I’m not even planning to be a councillor again. In financial terms, the money gained in councillor’s allowance has been far outweighed by loss of earnings and pension potential due to lack of career advancement.

  • “How about the comparative remuneration for Deputies in France, Germany USA etc?”

    Germany and the US are federal states with a lot of legislation decided at state level – so there not directly comparable in role with MPs

  • @Steve Whatever has qualifications (whatever you mean by that) got to do with it? It is another irrelevant point. Parliamentary candidates aren’t selected by their party based on whatever you mean by qualifications and the electorate who select them certainly don’t. MPs arrive via a variety of routes. We hope that they represent the population therefor the ‘qualification’ is surely that of the whole.

  • “Whatever has qualifications (whatever you mean by that) got to do with it? ”

    Not hard to explain really. I’ll give it a go since you appear not to possess a dictionary. Academic qualifications demonstrate competency as does experience in the work place. Such qualifications demonstrate the skill level of an MP and, as such, give good grounds to compare their salary with other workers. The electorate certainly do select which candidate to vote for based on their qualifications, but that is not the point we are discussing here.

    “It is another irrelevant point. ”

    A sound argument indeed, However, the last time you pointed out my argument was ‘irrelevant’ I comprehensively shot it down.

  • Andrew Suffield 6th Jul '13 - 12:28am

    I could earn more working for the private sector, probably with shorter hours, but. I hope you support a 10% payrise for research academics like me, rather than current below inflation increases.

    I don’t recall endorsing a 10% figure at any point – but yes, I am a long-standing supporter of greater funding for research.

    Or, if being a successful leader of the opposition in a London Borough is not enough to qualify one as an MP, what is?

    Oddly enough, winning an election is the qualifying criterion. It’s got very little to do with knowledge or skills. There’s no pool of jobs available for anybody who is as “smart” as an MP. There is one available for people who have actually been MPs.

    I doubt they could earn twice as much. They might get paid that

    You appear to be under the misconception that there is some objective definition of “earn” other than what you get paid. My point was precisely that no such thing exists in our society. Jobs do not and never have worked that way.

    For a significant proportion of MP’s £66k a year is a career high salary. As to their earning potential after politics while there are undoubtedly some former MP’s of great ability all too often we see people simply profiteering off the back of their “public” service, selling political contacts and insider knowledge, and getting payback for favours done in government.

    Same confusion here – earnings before being an MP are irrelevant, and “contacts and insider knowledge” are what we also called practical job experience and are the primary things that every experienced professional in corporate management is offering their employer. It is irrelevant whether you think that MPs should acquire contacts and insider knowledge during their term in office and then use that experience for personal gain later in life. They will do so regardless of whether you think it should happen or not, unless we start shooting MPs who lose their seats, which does not sound like a very good idea to me. The only point that matters here is: how much money do we have to pay them to make them willing to keep being MPs and not run off to private industry as fast as they can?

    (The answer appears to be “roughly what we currently pay them”)

  • Matthew Huntbach 6th Jul '13 - 9:03am

    Andrew Suffield:

    OK, but I took what you were saying as suggesting that anyone who has whatever it takes to become an MP could easily earn twice an MP’s salary doing something else. That, after all, was what we were arguing about – that the low salary of MPs could put off people from attempting to become one. So that is why I was trying to get you to say what it is that makes someone a person capable of being an MP, because your argument seemed to be all around there being this special sort of person who could become an MP, that sort of person also being the sort of person who could walk in to a job with £130,000 salary. Now you seem to be making an entirely different point, which is that once someone has been an MP they could move into a very high paid job afterwards. But that point is not relevant to the original argument.

  • “Now you seem to be making an entirely different point, which is that once someone has been an MP they could move into a very high paid job afterwards. But that point is not relevant to the original argument.”

    Actually, if that is the point he’s making, I think it’s highly relevant, because it implies that being elected an MP is effectively a licence to print money in your subsequent career. If time spent as an MP really opens the door to huge earnings thereafter, then that knocks on the head any idea that people will be unwilling to become MPs unless the MPs’ salary is £70k plus.

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