Should MPs vote for above-inflation pay increases?

This morning's FT reports that Gordon Brown and David Cameron are both urging their MPs to reject above-inflation pay increases for themselves.  If previous research is to be believed then Conservative MPs are the least likely to be accommodating.

There seem to be a number of issues here (in no particular order):

• The recommendation of higher pay comes from an independent review body.  Shouldn't that body's advice be accepted?
• If MPs vote for above-inflation pay increases, where does that leave the Government's attempts to restrict wider public sector pay settlements?
• Over the years MPs' pay has fallen behind the pay of public sector employees that they were once ranked alongside.
• MPs' pensions are widely regarded as amongst the best in the world.
• There is no shortage of people wanting to be MPs but are we attracting MPs of sufficient quality?
• Only one-third of ex-MPs are able to secure higher salaries for themselves.
• Tory MPs, in particular, have many outside paid interests.  Would these interests continue if pay was increased significantly or would they continue on the same scale?
• Should a new pay settlement be part of a wider reconsideration of MPs' allowances?
• Should MPs be allowed to employ members of their families?
• Should MPs be voting on their own pay at all?

Comments

[Man in a Shed]

There is a problem with MPs voting their own pay.

But also watch the details - the row is over this year - but if i heard right they are planning an RPI + £650 /year increase for the two years to follow.

Given that CPI (currently bout 2%) is used when Gordon Brown argues about public sector pay yet they use RPI (currently c 4% ) for their own pay.

Could the truth be that the government and politicians are forcing a 2% pay cut on the public services ? ( The private sector thinks so with current average pay increases at 4% ).

Don't get me wrong - it may be time to cut back public sector pay ( why would all those foreign Doctors be flocking here if it wasn't for the spectacular pay on offer here ) - but Labour should have the courage to be honest.

But as we all know they are cowards and spin merchants.

[Tony Makara]

Government should set the lead when it comes to brokering public sector pay settlements. Any above inflation pay increase would play into the hands of the unions, but even more importantly would, in the public eye, paint a picture of politicians as self-serving hypocrites.

On the question of quality MPs. This is something that has troubled me since 1997. There seems to be a distinct lack of quality, particularly among backbenchers. I ask anyone to compare the composition of parliament from thirty years ago with that of today. Since the TV cameras entered parliament we have seen the rise of the career-politician and a severe decline in politicians of substance. These days it seems the ability to be articulate is considered of more value than anything else. The average backbencher is of very poor quality intellectually and is completely unable to come up with any degree of independent thought. Most are akin to poll-parrots chirping out the party line in the hope that one day they might achieve celebrity status in cabinet. The standard of MPs has become ever more diluted with each passing election.

[London Tory]

MPs should have their pay pegged back to below inflation levels. It is interesting to note that some of the MPs on our side who are demanding the increase have actually got more than one, and in many cases, several 'other' jobs. No doubt they will claim it is giving them "experience of the outside world" , as if sitting in the boardrooms of top level companies and merchant banks teaches you how to live on a can of baked beans each day.

[a-tracy]

Is the Independent Review Body a group of people not earning from the public purse?

Do MP's have to be degree educated or hold similar vocational qualifications e.g. NVQ level 4/5's, HND's etc?

Could we reduce their numbers and then ask for increased quality and educational requirements of those MP's remaining, those without degrees could undertake their NVQ's whilst working at their own expense?

Could we ask them to take a pension from the general pensions savings scheme they propose for the majority of us after 2012, then it would be in the MP's interests to look after all our compulsory pensions savings accounts. They could top up additional private pensions if they want them and then take the extra pay they would like in the here and now.

[London Tory]

I agree about the poor calibre of current MPs. The decline in quality is even worse on the Labour side. The 1997 intake was the worst since the War. Many Labour MPs were ill equipped for public office, and were standing to gain experience, only to find themselves swept in on the Blair tide. Between 1945 and 1983, many MPs had served with the forces during the War, and their experiences and opinions were moulded by this, and the post war austerity.
I had no time politically for the likes of Foot, Benn and Jenkins, but they were proper people who could debate in the chamber, and think on their feet.
On our side we had people like Keith Joseph, Angus Maude and Enoch Powell. What a contrast to today !

[Michael Rutherford]

In response to:

"There is no shortage of people wanting to be MPs but are we attracting MPs of sufficient quality?" and "Tory MPs, in particular, have many outside paid interests. Would these interests continue if pay was increased significantly or would they continue on the same scale?"

Increasing the wages of MPs will not improve the quality. If you're suggesting that directors of FTSE100 companies will come if there is a higher wage, the wages would have to go up by a ridiculous amount. Equally, the likes of William Hague can pick up hundreds of thousands in outside interests, the taxpayer can't possibly match that.

Normally I'd say that they should accept the suggestions of the independent body, but when the government is refusing to accept that for police officers, it surely can't accept the recommendation for MPs.

[Malcolm Dunn]

I'd be very interested to see if anyone will argue in support of above inflation rises. Frankly I very much doubt it.

[Alex Swanson]

I'd be very interested to see if anyone will argue in support of above inflation rises.

OK, I'll bite. I think everybody in the economy should have above-inflation pay increases if the economy is growing. I was under the impression that we-must-keep-inflation-down-by-restricting-pay had gone out in 1979.

The proper thing to do is to increase productivity in the public sector by enough to fund above-inflation pay increases for public servants. To want to restrict pay rises is a tacit admission that this has not and indeed can not be done by the current administration, but the solution to that is, as in the private sector, new management.

As for MPs being poor quality, I think this is true, but restricting pay is not the answer. And I can't agree that the current lot is worse than the ones who over decades brought us to near economic meltdown in the 1970s, or who - on all sides - fought tooth and nail against Thatcherite reforms during the 1980s.

[Sally Roberts]

I do not see, frankly, why MPs should not be able to employ members of their own families. After all, family businesses exist everywhere and no one seeks to outlaw them!

[Tony Makara]

London Tory, very good point about the Blair tide. As you say many of these people were not even expected to win by the Labour party and were just making up the numbers. So what we ended up with was a mass of compliant MPs who wouldn't dare to stand up and criticize government policy. I feel that the bankbenchers have a duty to hold the cabinet to account, particularly when government has a large majority. As you say the likes of Jenkins and Joseph were on a different planet compared to the lightweights of today.

All political parties need to look at their selection process and ask not only whether a candidate is capable of being elected but whether that person is capable of actually making a telling contribution in parliament, rather than just being a backbench functionary.

[Graham Checker]

"Should MPs vote for above-inflation pay increases?"

Given that Gordon Brown is CLEARLY trying to use this vote as a weapon to batter the Tories with, the answer should obviously be a firm; "No."

Long-term, however, I don't believe MPs should be able to vote on their own salaries.

If you could vote on your own salary rise, what would you do?

It's too political. An independent salary board should set a basic "civil service" salary for all MPs.

In addition, the independent salary board could incorporate some "scales and benefits" into the salaries set. Maybe for length of service, extra responsibilites, or something, that is forfeited by taking any outside interests which take away more than "X" number of hours (maybe 15??) out of their working week.

[London Tory]

Tony, the most damning put down from one MP to another in the Chamber over the years has been "it says here", in other words someone who gets on his hind legs and reads parrott fashion from a script (normally handed out by the Whips Office). I could name you 20-30 Labour MPs, almost all of whom were elected since 1997, to whom this heckle is regularly applied.

They do not see their role as an MP as one in which they are duty bound to challenge the Executive. Party political loyalty always comes first. Just look on their websites to see how they have tried to have it both ways on police and nurses pay.

[Patsy Sergeant]

The answer is quite straightforward - NO, NO, NO. As Michael Rutherford says @ 10.26 - 'Increasing the wages of MP's will NOT improve the quality!!

[Beligerent of Bracknell]

Let them vote to have higher salaries. But in common with industry expect higher productivity. The only measure for that would be to reduce their numbers. The Chamber is severely overcrowded when they are all there so perhaps we should only have 450 (including Mr Speaker) MPs. This means as a side effect that constituency boundaries would need to be redrawn and perhaps get more equity of representation. The MPs who didn't get new seats could then retire on the exorbitant pensions we have to pay for, or go into local governmnet and perhaps restore some of its credibility and power.

[Gricer]

The salary in itself is not the primary issue; the problem is their absurd pension arrangements and generous, unchecked, 'expenses'.
Give them say £K75, but a pension scheme no more generous than that of a civil service clerical officer, and make them account for their expenses to Revenue and Customs in the same way the rest of us have to.

[Malcolm Dunn]

Nice try Alex, your heart's not in it though is it?

[Tony Makara]

"unchecked, 'expenses'."

Gricer, something should be done about career-councillors who can get elected on a 15% turnout and can rake in considerable amounts by way of expenses. A future Conservative government must look at gravy-train councillors who milk the political process at local level.

[Alex Swanson]

Nice try Alex, your heart's not in it though is it?

;-)

[TimC]

In the private sector, employees performance would be linked to the overall performance of their company.

Maybe MPs pay should be linked to an independent measure of growth of the economy, improving recognition of educational standards provided by the uk, reduction in income tax etc?

The only thing is that applying such a formula would probably lead to MPs having to take a pay cut.

[Dontmakemelaugh]

"The recommendation of higher pay comes from an independent review body. Shouldn't that body's advice be accepted?"

How "independent" is the review body?
At most the dreamers, inept, snouters and democracy deniers(Broon & Co) should receive 1.9% - the same award they have given to police (Scottism MP's should, of course receive the full amount).
As commented before, most of the legislation is now dictated by the democracy deniers in Brussels (read today's Times or the EUReferendum blog), therefore MP's having little responsibility (and now only work part-time) for what happens to Britaim should be awarded a pay cut. I am sure MP's will see sense - don't you?
Ask Peter Hain - he will know what's fair.

[Evan Price]

The problem with MPs' salaries is difficult to grapple with. On the one hand we all bemoan the apparent increase in the number of professional politicians and on the other we seek experienced, well qualified people to stand for Parliament.

The interesting thing about the current debate is that an independent review body has made a recommendation that Gordon Brown seeks to overturn when the vote is taken.

If we are to attract some of the brightest and best, we need to ensure that the pay is competitive ... and that probably means paying MPs more than many constituents would think necessary. The problem with doing this is that we also attract people who view politics as a profession. Interesting dilemma; how would you persuade some of our best doctors to consider a period in Parliament when it means a reduction in pay for them? What about lawyers or bankers, for whom the reduction would be startling? Do we want to return to a day when only people who are supported or who can afford to enter the race to become MPs?

Parties are now selecting candidates for a general election that is probably 2 years' away. In that 2 years, the candidates are not being paid for the work that they do; many will have to have sympathetic employers and families to be able to take the time to campaign. The election comes and they may be in Parliament for only one term ... do we want them to retain their outside interests, professions and occupations so to keep them close to the opinions of people outside Westminster?

Personally, the pay is probably sufficient, but it needs to keep up with inflation. I would prefer to see no premium for ministerial post at all - so no financial incentive to become a minister.

The compactness of the house was deliberate in the rebuild after the War. It was to ensure a 'hothouse' according to Churchill.

[Paul Kennedy]

No....to the question. And maybe an MP's salary should be fixed for the entire term of a Parliament. In advance of an election the rate for the job is advised, those who feel it is not enough need not bother standing. The pension scheme should be altered to an accrual rate of 1/60 or 1/80 and based on the average salary drawn over the period of them being an MP and not their final salary.

[Paul Oakley]

I agree that there are many MPs who are of low quality but this factor should not be allowed to skew discussion of the bigger issue. Not all MPs are wealthy through private means or profession and it was for this reason that the Chartists rightly demanded that they be paid a salary in the first place to ensure that there would be reflective representation. Current remuneration is not excessive, particularly for those who do not represent seats in London or the South East.

The present proposals for a pay rise are unwise but only as a consequence of Labour's parsimonious approach to the Police pay award. It is quite right that public sector pay should be kept under control. However, the runaway costs are not those of frontline workers such as the police, firemen or nurses. The government should instead be concentrating on the fat salaries of the "top" civil servants which was highlighted in the Taxpayers' Alliance pre-Christmas report. Better still, send out swathes of P45s. The general public would much prefer to pay 3 coppers £40K than one quangocrat £120K.

[Dontmakemelaugh]

"Parties are now selecting candidates for a general election that is probably 2 years' away. In that 2 years, the candidates are not being paid for the work that they do; many will have to have sympathetic employers and families to be able to take the time to campaign".

I have never seen or been visited by a "candidate". What do candidates do apart from their names appearing on leaflets?

" The election comes and they may be in Parliament for only one term ... do we want them to retain their outside interests, professions and occupations so to keep them close to the opinions of people outside Westminster? "

We do want them to retain there outside interests. In fact we want them to have outside interests before they enter parliament and not more-or-less straight from student union posts. To enter Parliament should be an honour and should suit those that have already achieved something. It should not be treated as a nice little earner or get rich quick scheme for those with the gift of the gab.
It should not be forgotten the perks MP's receive on top of their salary; subsidised mortgages, in certain cases; meals and drinks; free travel; index linked pension (which I believe also applies to those serving just one term in Parliament; and no receipt needed for expenses under £250) plus £10,000 for postage and probable employment of spouse as secretary or tea maker. Finally, there is always the chance of winning the lottery jackpot and be sent to Brussels (where you can completely ignore the interests of the voters at your leisure)
Where do I apply?

[James]

It seems to me there are two possible solutions:

1. The EU has now agreed that MEPs' salaries should be linked to that of an EU judge. We could do something similar. Pick another public sector job that should be broadly equivalent, then tie MPs' salaries to that. Eg, police chief, high court judge....

2. Allow MPs to continue to vote as they do now, but they should vote BEFORE they know what the Independent Review Body's recommendation will be. Eg, at the start of each Parliament, there should be a fomrality vote that MPs will agree to the Review Body's recommendations later that year, whatever they will be. Then make sure the review body is genuinely independent (make it up of former judges etc) and has clear guidelines for how it should be making it's decision.

It's not rocket science. Either of the above methods should remove this unedifying annual argument.

One of the problems today is exactly the same as a similar argument I remember 8 or 10 years ago. MPs exercised 'wage restraint' for several years, awarding themselves below average pay rises...then suddenly declared themselves to have fallen behind and made up the difference with one large rise (I think it was 22% then?). What a silly, boom and bust way of doing it.

[Jhn]

Remeber politicians ( just want the priviledge to serve ) so the answer is NO.

[Londoner]

A few percent here or there on the base salary is not really that material, except in terms of PR. What IS material, and is a scandal, is the continuing accrual of their extremely generous (unfunded) Defined Benefit (i.e. final salary) pensions (as referred to by the Editor). This is a problem with regard to much of the public sector, but there is zero chance of it being tackled by any Government until MPs and Ministers are no longer part of it.

David Cameron should get the Parliamentary Party to agree that the manifesto will promise legislation that there will be no further accrual of MP's or Ministerial DB pensions from the date of the next General Election. In return MPs should get a money purchase/stakebuilder employer contribution from the taxpayer, based on the generous end of private sector scales for such pensions.

He should also introduce legislation that at the start of the Parliament the top pay review board sets the base salary at a fixed flat cash amount FOR THE WHOLE OF THAT PARLIAMENT. That way every MP and Minister has a vested interest in using their influence to keep inflation as low as possible. For the Parliament after next, the review body could be asked to decide the pay in advance, i.e., say, three years into the next Parliament. That way every candidate standing in the election will know what the deal is and they can take it or leave it.

Further Cameron should say that unless the Government supports his proposals, the Party will not support 3 year pay deals for other public sector workers who have much less influence on the economic policies prevailing over an extended period ahead than MPs do.

[John Scott]

Of course MPs should not vote for their own pay increases. I would be in favour of giving MPs a 2.8% pay increase if they closed their final salary pension scheme and contributed to money purchase schemes like the rest of the country. The activity of MPs should also be independently scrutinised. There are too many dead beats on all sides who never scrutinise legislation or campaign for their constituents.

It is about time MPs started acting like the public sector workers they really are, and started showing respect to those of us working in the private sector, creating the wealth to pay their salaries.

[Prentiz]

I have never seen or been visited by a "candidate". What do candidates do apart from their names appearing on leaflets?

Then, if you're a Conservative, you should get off your hind legs and ask your association why they keep selecting such lazy candidates. I've worked with various candidates in the past, and whilst some of them do little work, there also usually the ones that don't get elected. Of the candidates I can think of now, several give up at least one working day a week, as well as their weekends to work politically.

This issue is always difficult - and clearly now Brown is using it as a political battering ram. In future, it does seem sensible for the process to be transparent and properly independent. But, if it is, don't be surprised if it reccomends big pay rises. MPs are ON THE WHOLE a pretty talented and hard working bunch. MPs doing their job properly in important positions or in marginal seats work ridiculous hours, and often come from jobs which pay much more. To put it in context, some graduate trainees in the city get paid more than MPs £50k actually salary. Even third tier officers at councils will earn more than this (rightly or wrongly).

[John Scott]

Prentiz - perhaps, but they don't receive £130K expenses and £20K a year towards the mortgage! lol

[James]

We on ConHome should be better informed than the average man on the Clapham Omnibus (not because we're smarter, but because we're political asnoraks who take a close interest in such things).

So we should not be peddling the silly line about MPs pocketing £130k in expenses.

This is not part of their salary and should not be treated as such. It's used to pay for staff, offices etc. In no other job is the cost of an individual's secretary, office equipment etc considered to be part of their salary.

MP's earn £60,675 a year.

There is potentially an issue over housing allowance, because MPs can benefit from rising house prices if they buy a property when they are elected and sell when they lose their seat during a time of rising house prices. However, it is also possible for an MP to buy a property in London at peak property prices (like the 2005 entry), and sell it when losing their seat after a crash (such as around the time of the next election!!) and lose money. Should they be compensated by the taxpayer?

The housing allowance causes resentment, but you can;t really expect an MP on £60k a year to maintan a home in their constituency and in London without any help.

[James]

(that should read 'anorak')

[Dontmakemelaugh]

The housing allowance causes resentment, but you can;t really expect an MP on £60k a year to maintan a home in their constituency and in London without any help.

Posted by: James | January 10, 2008 at 17:32

Of course not James and I expect all the profit made on the sale of the home is returned to the taxpayer. I would imagine that trying to find an MP who had sustained a loss on such a property would be like trying to find a needle in a haystack - do we know of any?

[Machiavelli's Understudy]

As with virtually any other employee, pay rises should be set by the employer...

Perhaps an option at the ballot box for each election, across the board for all elected representatives?

[James]

Dontmakemelaugh @ 1921

Quite happy with that, as long as the hypothetical MP who loses money on his London house is compensated. It does and can happen.

The rules must be fair both ways.

[barry]

You get what you pay for. Thats why, in general, our MPs (of ALL parties) are of such low calibre. Without exception, there are a small minority of MPs that are dedicated public servants, completely unmotivated by money - but they a rare gems. The performance of most other MPs is directly collerated to thier compensation.

So, should we increase MPs salary by above inflation - damn it we should.....we should triple MPs compensation, so that in the next election we can attract smart people from industry and beyond that will see being an MP as a real alternative.

You get what you for. Anyone who thinks otherwise is fooling themselves.

[John Scott]

Don't forget that MPs use their positions (and taxpayer funded salaries and pensions) to get media and consultancy work. This is Diane Abbott's entry in the Register of Members' Interests - over £30K of media and lecturing work directly as a result of her position as an MP.

2005/6 Arcadia Lectures for School of Oriental and African Studies, London. (Actual £1,200) (Up to £5,000)
November-December 2006, weekly, fees for articles in Evening Standard, ongoing. (Actual £3,200) (Up to £5,000) (Registered 22 January 2007)
November-December 2006, bi-weekly fees for article in The Voice newspaper, ongoing. (Actual £600) (Up to £5,000) (Registered 22 January 2007)
Television programmes, as a presenter for BBC One's weekly programme "This Week" from November 2006, ongoing. (Actual £5,600) (£5,001-£10,000) (Registered 22 January 2007)
January 2007, weekly, fees for articles in Evening Standard, final. (Actual £1,600) (Up to £5,000) (Registered 20 March 2007)
January-March 2007, bi-weekly fees for article in The Voice newspaper, ongoing. (Actual £600) (Up to £5,000) (Registered 20 March 2007)
Television programmes, as a presenter for BBC One's weekly programme "This Week", from January 2007, ongoing. (Actual £8,800) (£5,001-£10,000) (Registered 20 March 2007)
Pre-production fee for BBC's "Play It Again". (Actual £14,326) (£10,001-£15,000) (Registered 20 March 2007)
January 2007, lecture fees, Arcadia University. (Actual £400) (Up to £5,000) (Registered 20 March 2007)
April-July 2007, bi-weekly fees for article in The Voice newspaper, ongoing. (Actual £600) (Up to £5,000) (Registered 27 July 2007)

[Jake]

"I would be in favour of giving MPs a 2.8% pay increase if they closed their final salary pension scheme and contributed to money purchase schemes like the rest of the country "

Now this IS a good idea . No messing around at the edges of the MP's pension scheme -
just abolish it altogether and let them grapple with the same reality that all those who have to feed their money purchase schemes have to go through .
Such a douche of cold reality ( and equality ) might restore a bit of their credibility .

Are you listening Mr Cameron .

How about incorporating this into into the next Conservative manifesto ?

[Richard Baxter]

Oh, come on. Even before you start to look at benefits, a basic salary of £60K is hardly peanuts. There are plenty of "smart people from industry and beyond" who perform miracles for FAR less than an MP's wage... teachers, scientists, engineers, academics, many others. Why aren't they flocking to stand for Parliament?

The problem isn't that MPs are paid too little (they aren't) but that the role is not seen as either respectable or worthwhile. Hence, it attracts people who are neither.

[Richard Baxter]

Also consider Cameron's recent comments that "parliament needed more MPs with backgrounds in small business and in the voluntary sector" - for the majority of people in these sectors, £60K is more like a Lottery win than an annual salary! Once again, it's not the salary that's the problem.