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To rein in top pay, keep MPs poor and furious To rein in top pay, keep MPs poor and furious
(3 months later)
You know how it is. You are sitting with some friends round a table on which is stashed £60m. It comes from a poll tax on television sets, free of Treasury control, and you can do with it what you like. You can use it for better television programmes, give it to low-paid staff or even return it to the taxpayer. No one will know, except a bunch of toothless trustees.You know how it is. You are sitting with some friends round a table on which is stashed £60m. It comes from a poll tax on television sets, free of Treasury control, and you can do with it what you like. You can use it for better television programmes, give it to low-paid staff or even return it to the taxpayer. No one will know, except a bunch of toothless trustees.
So you smile nervously at one another, reach forward and pocket as much loot as you can grab, especially if you are on your way to pastures new. There might be a question or two from members of parliament or the press, but that is life. Any bother will blow over. According to Monday's National Audit Office report, three BBC executives took more than half a million pounds each and one, Mark Byford, took almost a million.So you smile nervously at one another, reach forward and pocket as much loot as you can grab, especially if you are on your way to pastures new. There might be a question or two from members of parliament or the press, but that is life. Any bother will blow over. According to Monday's National Audit Office report, three BBC executives took more than half a million pounds each and one, Mark Byford, took almost a million.
The BBC's bosses are not alone in roaming the gilded halls of the public sector. Down the road, legal aid lawyers have been lobbying fiercely to defend their £2.1bn budget, now six times the German rate per head and 17 times the American one. The government wants to cut it by 10%, and may yet cave in. Meanwhile, hospital consultants have won average salaries of almost £160,000, plus £200 an hour weekend overtime. Almost half of this sum is a £76,000 "clinical excellence" bonus.The BBC's bosses are not alone in roaming the gilded halls of the public sector. Down the road, legal aid lawyers have been lobbying fiercely to defend their £2.1bn budget, now six times the German rate per head and 17 times the American one. The government wants to cut it by 10%, and may yet cave in. Meanwhile, hospital consultants have won average salaries of almost £160,000, plus £200 an hour weekend overtime. Almost half of this sum is a £76,000 "clinical excellence" bonus.
These rewards are small beer alongside the titans of taxpayer largesse. The boss of Royal Mail, Moya Greene, is reported to be getting £1.5m, including bonuses. The managers of Network Rail have each received 17% bonuses this year, despite missing their targets. Their chief, Sir David Higgins, received £677,000. Even the benighted Care Quality Commission gave its head £440,000 last year.These rewards are small beer alongside the titans of taxpayer largesse. The boss of Royal Mail, Moya Greene, is reported to be getting £1.5m, including bonuses. The managers of Network Rail have each received 17% bonuses this year, despite missing their targets. Their chief, Sir David Higgins, received £677,000. Even the benighted Care Quality Commission gave its head £440,000 last year.
Almost all these people are paid a "bonus" on their pay (though no longer the BBC). The idea that such executives need financial incentives to do what they are paid to do is as meaningless as it is offensive to junior staff on whose work their bonus really depends.Almost all these people are paid a "bonus" on their pay (though no longer the BBC). The idea that such executives need financial incentives to do what they are paid to do is as meaningless as it is offensive to junior staff on whose work their bonus really depends.
Such corporate-style remuneration dates from the Blair era with its love of McKinsey consultants and their glorification of "high net-worth individuals" who could "think outside the box". It was an ethos that delivered Enron and RBS. With no shareholders or competitors, with tame remuneration committees and pay advisers, executives ended up with what JK Galbraith justly called "warm personal gestures by individuals to themselves".Such corporate-style remuneration dates from the Blair era with its love of McKinsey consultants and their glorification of "high net-worth individuals" who could "think outside the box". It was an ethos that delivered Enron and RBS. With no shareholders or competitors, with tame remuneration committees and pay advisers, executives ended up with what JK Galbraith justly called "warm personal gestures by individuals to themselves".
Which brings us to MPs. They were once paid from the same trough as the rest, dipping into it with gay abandon and avoiding scrutiny by concealing income as reimbursed expenditure. After the 2009 expenses scandal, the MPs did the right thing. They parked their pay "offshore" in a statutory arms-length quango, the Independent Parliamentary Standards Authority (Ipsa).Which brings us to MPs. They were once paid from the same trough as the rest, dipping into it with gay abandon and avoiding scrutiny by concealing income as reimbursed expenditure. After the 2009 expenses scandal, the MPs did the right thing. They parked their pay "offshore" in a statutory arms-length quango, the Independent Parliamentary Standards Authority (Ipsa).
This body incurred ridicule by making MPs fill in absurd forms and asking them how much they thought they should be paid. Most said more. Ipsa is expected to recommend a rise from £65,000 to roughly £70,000 after the next election. This increase parliament would be legally bound to accept.This body incurred ridicule by making MPs fill in absurd forms and asking them how much they thought they should be paid. Most said more. Ipsa is expected to recommend a rise from £65,000 to roughly £70,000 after the next election. This increase parliament would be legally bound to accept.
The increase is hardly outrageous, given what prevails elsewhere in the public sector. A BBC or Care Quality Commission executive would hardly get out of bed for just five figures. Yet the party leaders, who get double what ordinary MPs receive, are lining up to refuse it. While the MP for the Cities of London and Westminster, Mark Field, says they should "bite the bullet" of unpopularity and take the rise, the political consensus is that taxpayers (or the tabloids) are so outraged that a new law will have to be passed rejecting the sum.The increase is hardly outrageous, given what prevails elsewhere in the public sector. A BBC or Care Quality Commission executive would hardly get out of bed for just five figures. Yet the party leaders, who get double what ordinary MPs receive, are lining up to refuse it. While the MP for the Cities of London and Westminster, Mark Field, says they should "bite the bullet" of unpopularity and take the rise, the political consensus is that taxpayers (or the tabloids) are so outraged that a new law will have to be passed rejecting the sum.
Connoisseurs of accountability may be intrigued to note that those who pay the piper are most able to call the tunes when they are within earshot, like voters to MPs. When pipers are more distant, as are quangocrats, they play any tune they like. MPs may be lowly forms of life, but not five times lower than a broadcasting executive or four times lower than a quango chief. Their job security is minimal, and the hours rotten. MPs have set up a better way of fixing their pay. To chuck it at the first hurdle seems a concession to mob rule.Connoisseurs of accountability may be intrigued to note that those who pay the piper are most able to call the tunes when they are within earshot, like voters to MPs. When pipers are more distant, as are quangocrats, they play any tune they like. MPs may be lowly forms of life, but not five times lower than a broadcasting executive or four times lower than a quango chief. Their job security is minimal, and the hours rotten. MPs have set up a better way of fixing their pay. To chuck it at the first hurdle seems a concession to mob rule.
Such pay from the public purse was once subject to draconian Treasury control. That has collapsed. It is now MPs who monitor top pay in the public sector. Their Joan of Arc is the sainted Margaret Hodge and her public accounts committee. Hardly a week passes without Hodge's committee uncovering some new pay shocker that the Treasury has ignored. Already she has secured one penitent scalp. The former BBC executive, Roly Keating, has decided to give back a "seriously deficient" golden goodbye of £375,000 given him when he left to run the British Library. BBC salaries are apparently like Google taxes, a struggle between conscience and shame.Such pay from the public purse was once subject to draconian Treasury control. That has collapsed. It is now MPs who monitor top pay in the public sector. Their Joan of Arc is the sainted Margaret Hodge and her public accounts committee. Hardly a week passes without Hodge's committee uncovering some new pay shocker that the Treasury has ignored. Already she has secured one penitent scalp. The former BBC executive, Roly Keating, has decided to give back a "seriously deficient" golden goodbye of £375,000 given him when he left to run the British Library. BBC salaries are apparently like Google taxes, a struggle between conscience and shame.
Top pay in the state sector has followed the private in stretching the gulf between it and median incomes. MPs are commendably in the lead in their fury. But this suggests that they should remain poor. As long as MPs harbour a pay grievance against their public sector colleagues, they are more likely to guard the public purse. We must keep them lean, mean and angry.Top pay in the state sector has followed the private in stretching the gulf between it and median incomes. MPs are commendably in the lead in their fury. But this suggests that they should remain poor. As long as MPs harbour a pay grievance against their public sector colleagues, they are more likely to guard the public purse. We must keep them lean, mean and angry.
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