As a voter, and the ultimate paymaster, how much would you pay your MP? In political circles, first responses to the watchdog’s recommendation have covered the spectrum. At one end are those who think a £6,000 rise is too little (and are reluctant to break cover); at the other are those who think it is too much (and are happy to shout about it); then there are those who think that the Independent Parliamentary Standards Authority got it just about right.
On one point, though, most people can agree, and this is that an almost 10 per cent rise for MPs at a time when pay in the public sector is mostly frozen and many of those in the private sector have suffered a pay cut in real terms is awkward, to put it mildly. And this in turn has produced new divisions between those calling for the rise not to be implemented, those who say it should be accepted but delayed, and those who say it should go ahead, but that they personally – and, by implication, any MP worth his salt – will make a big fuss about forgoing it.
Sir Ian Kennedy, chairman of Ipsa, and the front man for the recommendation, deserves some sympathy. The whole point of delegating the power to set MPs’ pay and pensions to the regulator was to remove it from the political fray. As Sir Ian himself stressed this week, there is no provision for a parliamentary vote, or for the Government “to pick and choose”. Whatever Ipsa decided was supposed to be final. That in practice this appears not to be so – David Cameron insisted the recommendation was “not a pay rise, it’s a proposal” – casts doubt over the whole exercise. In which case dissolving Ipsa and going back to the drawing board might be the best idea.
While a pay increase to £74,000 a year was the inevitable headline, some of Ipsa’s other recommendations make a lot of sense. They include higher pension contributions and some reductions in perks. Most useful for the future is the suggestion that MPs’ pay should be adjusted up or down according to average annual pay. That would be a nod in the direction of being “all in it together”, albeit from a rather elevated baseline.
The abiding question, though, is what that baseline should be. There was a time when MPs’ pay was pegged to that of a principal in the Civil Service, which seemed an appropriate benchmark. This also aligned MPs’ pay roughly with that of other professionals: a bit above senior teachers, a bit below doctors and lawyers. In principle, that feels about right, in terms both of money and status: not so low as to discourage qualified individuals or foster corruption; not so high as to place MPs in a class of their own.
The problem was that such a peg presupposed a stability in the wider pay pecking order that is now gone. It is not only in banking that many traditional constraints on pay have been abandoned over the past 20 years or so. Hospital doctors and GPs have benefited from big pay rises compared with other professions, while NHS consultants enjoy merit pay and whatever they earn from private practice. In universities, vice-chancellors’ salaries have been in overdrive, in recognition, so they say, of their new business and fundraising responsibilities.
Teachers’ pay has also risen across the board, but the arrival of the “super-head” has added a whole new category at the top of the profession, with salaries easily into six figures. A similar spinning apart can be observed in the law and the media, where superstars command stratospheric rewards, while pay for the majority has barely moved. Even in the stolid old Civil Service, what used to be a rigid grade structure with standardised pay has been disfigured by the pernicious addition of “performance” bonuses that should have no place in the public sector.
The upshot is that the spread of pay anywhere in the professions is now too wide for MPs’ salary to be reliably pegged to any one part of it. That London has pulled even further away from the rest of the country in pay terms may also have given MPs an unrealistic idea of their place in the national pay spectrum. At just over £66,000 a year, their current salary, they are in the top 5 per cent of UK earners – and their emoluments, even under the leaner, post-scandal expenses regime, place them still higher.
For many, probably a majority, this is roughly what they would be able to earn as professionals or managers outside Parliament. On the international scale, UK MPs are somewhere in the middle; above France and Spain, a little below Germany and quite a bit below the United States – where the spread of professional salaries is far wider even than it is in Britain. The proposed rise would place British MPs on a par with their German counterparts, but would not significantly change the UK’s place in the league table.
Whatever happens next, this furore about a pay rise for MPs might best be seen as the latest stage in the long and often painful evolution of the UK Parliament from gentlemen’s club to modern legislature. There are still too many MPs who combine their responsibilities as elected representatives with other jobs – and it is no good Cameron and others defending such practices as enriching; more mobility between Parliament and the real world is desirable, but should be consecutive, not concurrent.
A salary of £66,000, plus MPs’ expenses, is already enough to enjoy a decent middle-class lifestyle without taking on other work. In recognition of this, any pay rise should be linked to a permanent change to Parliament’s hours to a regular 9-5 and an expectation that our elected representatives will take a full part in the legislative process.
In the end, though, I doubt whether even a 10 per cent pay rise will attract more people to stand for Parliament or a pay freeze cause resignations in droves – the job is a privilege as well as a responsibility. But if it does, there is a remedy: cut the numbers, and see if fewer means better and more committed MPs.