Don't pay MPs more

The news that MPs think they deserve a £20,000pa pay rise is neither surprising nor relevant. Not surprising, because we all think we're underpaid. And not relevant, because pay does not and should not depend upon desert. Instead, the question is: if we paid MPs more, would we get better governance? I'm not sure.

There are three ways in which higher pay can improve labour supply. And whilst they might apply to some politicians sometimes, I'm not sure they apply to MPs now.

1. "Higher pay would attract better candidates." Richard Murphy says that doctors, headteachers and other professionals have to take a big pay cut if they want to become an MP, and this deters talented people.

There are three problems with this. First, as Paul says, the job of being an MP doesn't require huge skill. You need to be a genius to obey the whips' orders. Secondly, do we really want good doctors and headteachers leaving their jobs to become humdrum backbenchers? Can't they do more good in their current jobs? Thirdly, there's a danger that paying MPs more will crowd out the intrinsic motive of "public service." Do we really want MPs who are only motivated by cold hard cash?

2. "Higher pay would make MPs work harder, as the pain of losing their job would be greater."

But there are few cases of MPs not trying as hard as possible to hold their seats now - not least because of non-monetary motives to be an MP. The exceptions to this hardly support the case for higher MPs pay; would political life really be better if Louise Mensch had remained MP for Corby? And even if MPs did work harder, it's not clear this would be a good thing. I suspect that, in recent years, we've needed less legislative activism and more scrutiny of legislation. Would higher pay really have elicited this?

3. "Higher pay generates good will, and so buys off fraudulent behaviour."

Generally speaking, this is an under-rated reason for high pay. But I'm not sure it's relevant now. I suspect that British MPs are, by global standards, relatively honest already; fiddling a few grand in housing expenses is low-level stuff. And cross-country comparisons suggest little negative correlation between politicians' pay and honesty; MPs are paid more (pdf) in Ireland and Italy than in the Nordic countries, for example.

So much for my hypotheses. What of the historical evidence? My chart shows MPs pay (pdf) relative to average earnings. This shows that their present pay - at 2.7x average earnings - is in line with the historic average. Except for a brief period when MPs' pay was introduced in 1911, the best time financially to be an MP was the 1960s. But were we really well-governed then? Given that MPs included Maudling, Stonehouse and Driberg then, it's not at all obvious.

Comments

[Roger]

I fairness to Richard Murphy he only supports a rise in MPs pay if it is linked to a ban on outside earnings.

My own solution would be a ban on outside earnings, the replacement of most expenses scams by offering MPs from outside of London a council flat and civil servant assistance and the pegging of MPs (and ministers) salaries to a simple multiplier of average household income before tax.

None of which will ever happen.

[shinsei67]

You really don't think that dealing with the myriad problems your constituents have involves any skill, hardworking or experience at all?

[Justin]

If there are any geniuses in the current parliament it would seem they are keeping their heads down and their mouths shut.

I'd argue that MPs don't deal with constituents' problems through the summoning of a higher IQ. Firstly they have staff. Then they have access to information and the ears of people us lower lifeforms don't. This access is a product of the prestige of being an MP not a genius.

Dorries, Duncan Smith, Mensch, Clegg - they got where they are via their connections not by emulating Stephen Hawking.

[John H]

Lurking in that graph are a couple of trends that may help explain both MPs' perception that they are hard done by, and the public perception that they are greedy grafters.

Looking at the graph, back in the late 1970s MPs' pay was only just over half average earnings. So MPs are a lot better off, relative to their constituents, than they were 30 years ago.

However, over the past 15 years MPs pay has declined slightly relative to average earnings, from over 3x the average to around 2.7x. So MPs - most of whom will only have been around for that time or less - probably feel a bit hard done by. This is especially the case given that they are more likely to compare themselves with richer people, whose incomes have (I would guess) increased by rather more than the average. Add to that the financial squeeze resulting from the expenses scandal, and the MPs' self-pity becomes more comprehensible...

[Metatone]

Big issue with MPs overall has been and continues to be a lack of skill with statistics and other methods of reasoning. Particular subject areas of concern are still (25 years after it was first being raised) science and technology.

Now it's hard to fix this looking at individuals, but maybe higher pay after you pass some statistics and reasoning classes? Michael Gove should be first to take the course.

[Robert]

I largely agree with you, but I have concerns about this:

Thirdly, there's a danger that paying MPs more will crowd out the intrinsic motive of "public service." Do we really want MPs who are only motivated by cold hard cash?

Try that again but replace "MPs" with "teachers", "nurses", "social workers", etc. This line of argument is frequently used to put downward pressure on their wages. "You should be doing it for the love," they're told—but love don't pay the rent.

[Rahul]

Here is a question for discussion: would we get more independent candidates (and possibly MPs) with higher salaries? And given centralisation of power will it matter for either legislative performance or executive scrutiny? My hypothesis is "yes" and "no".

[rogerh]

I agree they are not worth more. Parliament seems an extremely inefficient zero-sum game. Legislation and regulation is of risible quality, defects remain unfixed for decades. Time-wasting game-playing is rife, progress? is glacial.

Parliament is not like a normal business, the idea of hiring real talent is laughable - what executives worth £200K/y+ would go near the place, their talent would be wasted entirely. No, leave it to numpties - until a chainsaw is taken to the entire political system from the top down. But, be careful what you wish for...

[guthrie]

Did new labour not try recruiting various ex-finance and other such folk to work in government? I thought most of them left after a year or two. I don't know exactly why, but given that most were already rich from previous activities it probably wasn't the lack of money. Maybe they found that seeing how the sausage is made isn't there thing, or that they couldn't have the power they were used to in their own field of business?
Therefore merely paying MP's more would be fairly pointless.

I would support increased wages if you banned outside work.