Pay Up

One of big stories of the past few days has been that of the pay of MPs. IPSA, the independent QANGO that looks after MPs pay and expenses, has recommended that MPs receive an extra £6,000 extra a year, culminating in a 9% increase after the 2015 General Election. I would like to say for clarity that MPs themselves have not recommended that they receive a pay increase and there is also a 1% pay rise, in line with all public servants, next year and the one after.  IPSA has got this one completely wrong however though as there is no particular reason for a change the amount MPs get paid. But redistribution of the total pay of MPs, their salary, expenses and pension, is needed to try boost representation of the public.

Pay rises should always be related to performance and thus, as there is no real fair measure that could be easily done on individual MPs that would not cost the Earth, we should judge MPs as a group of people and their improved performance across the ages. If you have a look at the chart below you can see that the pay of MPs has risen three times since the 1970s. The question thus is are MPs three times as good as they were in the 1970s? I think a good case can be made that they are better but three times is probably too much. on that basis MPs should have their pay frozen because their performance is at best equal to their pay.

One argument for the rise has been to attract members of the public who have a better ability to become MPs. By raising the salary those who a most able will come to the job. Ronald Reagan once said "the best minds are not in government. If any were, business would hire them away." There is no way that MPs salaries could compete monetary wise with the best in business because the best of the best don't get paid £72,000. They get almost double that and for the real best of the best we need to double that again. A rise such as astronomical as this could never be tolerable in relation to performance and even if we were to do it market forces that business responds to would offer a better deal.

But more importantly there is another problem with this argument and this that MPs aren't, or rather shouldn't be in some cases, in the job for the money but public service. People want to be MPs to serve, there are plenty of people willing to do this. People line up across the country to be MPs we are in no short supply of competent and willing people so we have no need to attract those in business.

Another wise quote is "There is No such thing as Public Money. There is only Taxpayers’ Money." Perhaps this should be more respected. 

But there is one issue that has come to light from the problems over MPs pay that does need solving. One of the arguments against a pay rise is that MPs are already millionaires and therefore should not get any more. However, I don't want all my MPs to be millionaires because we want people who in their 2nd life come from all levels of income, not just the super wealthy. The problem is that the less money MPs have in their pockets does effect the attraction of wealth levels as costs in being an MP do generally run over income.

There is however a solution to this situation and that is to pay MPs more but slash the amount that can be claimed in expenses and the amount given as a pension. This does not increase the overall cost of being an MP but allows them to have more money at hand. Consequently we are likely to get less Etonians or Duchesses, like Harriet Harpaerson, into Parliament. The IPSA proposals do contain some of this action but not enough to address this key problem.

Let's make sure that our representative democracy is just that.

IPSA has got their ideas very wrong on increasing MPs pay. If this were a business where everyday logic and reason applied and not the public sector, where there is an unwritten law of smash and grab as much money as you can from the taxpayer, this would not be happening. The greatest injustice of this situation is that IPSA's recommendations are seemingly binding. We'd have to be rid of IPSA to be rid of an increase. But IPSA have somewhat unknowingly stumbled into a situation where they could improve parliamentary representation in the country if only they cut expenses and gold plated pensions more.

Sir Ian Kennedy, head of IPSA, like many other civil servants has the wrong ideas on pay.

Weekly Poll Lowdown

Well this is all very interesting because there is such a wide range of opinion on this issue. A plurality of people would like MPs salaries to be raised although there is no consensus to what level. The option most voted for however was for things to stay the same. Interestingly a significant minority of people thought MPs deserve a pay cut.

Should MPs expenses be got rid of and the salaries of MPs be raised?

Yes, to £150 K per year.	8%
Yes, to £100 K per year.	15%
Yes, to £80 K per year.	23%
No things should stay the same.	31%
MPs should get a pay cut.	23%

Total votes: 25

So what do I think? Well I do think that MPs salaries should be raised to around £100,000 if expenses are cut.

We have a potential problem which may affect our democracy. We have right up to 2010 been building a better representation of  MPs from all socio economic backgrounds. It is obviously easy for millionaires to get into Parliament than those who are more like the public because millionaires have more money. But since the expenses scandal the pockets are MPs are on the squeeze. Rightly so they can no longer claim for duck houses and gravel drives but the new expenses system can also be too rigid in not allowing basic office equipment sometimes. Even going through the process of IPSA puts off many MPs for claiming for the basic things.

Duck Houses are rightly out.

For the poorest of MPs, this can be a big problem. Who wants to do a job when you're going backwards on the real pay you get? Where is the incentive for the best people to run the country rather than those who are a modern day version of a Georgian fop? We could liberalise benefits again as some MPs want, but some will just want to start fiddling which is not good. So raising their salary is a good idea as we don't necessarily change the amount spent on MPs by the public by doing this, but we give a higher amount to MPs. That way we may have less scandals although the genuinely greedy will stop at nothing.

IPSA is not amazing at its job and has put off many people from continuing or becoming MPs, not great for democracy. 

But should this happen? Probably not, it would a PR disaster. No government could be able enough to avoid the media storm of raising MPs salaries in a time of austerity. The public would not easily understand it and Labour would spin this so hard that it would seriously effect the government in polling. Perhaps this should be looked at when times are better, common sense however stipulates that things should stay the same.

Please vote in the next poll.