Are MPs underpaid? The key numbers

MPs' current salary of £66,396 puts them in the top 5 per cent of earners but they are paid significantly less than parliamentarians in other countries.

In a proposal seemingly drawn from the Louis XVI school of public relations, the Independent Parliamentary Standards Authority (IPSA) will recommend today that MPs receive a pay rise of around 11 per cent (£8,604) to £75,000 after 2015. The increase will be tempered by the replacement of MPs' final salary pension scheme with one based on a career average, cuts to evening meal allowances (a payment of up to £15 when the Commons sits beyond 7:30pm) and transport expenses, and lower "resttlement grants" or "golden goodbyes" (currently worth up to £33,000) for MPs who retire or lose their seat, but will still represent a net gain. 

While few are likely to publicly defend the salary increase, at a time when public sector pay rises have been capped at 1 per cent until 2015-16 (following a two-year pay freeze), most MPs do believe they are underpaid. A survey of 100 MPs conducted by YouGov on IPSA's behalf found that 69 per cent thought they were underpaid, with an average salary of £86,250 proposed. On average, Tory MPs proposed a salary of £96,740, the Lib Dems £78,361 and Labour £77,322. A fifth suggested that they should be paid £95,000 or more. But are they right to believe they get a raw deal? Here are some of the key metrics for answering that question. 

Do they earn more than the average wage?

Yes, the median full-time salary is £26,500, so MPs' current pay of £66,396 puts them comfortably in the top 5 per cent of earners. 

Are they paid less than other major professions?

Yes, council chief executives (£134,528), GPs (£88,920), senior civil servants (£88,000), army colonels (£85,359), headteachers (£78,298) and police chief superintendents (£72,649) all earn significantly more. 

Do they earn less now than in the past?

No, by historical standards, the current regime is generous. In 1979, MPs were paid £9,450, the equivalent of £40,490 in real terms. Their pay has since risen by more than 50 per cent, compared to an average increase of 37 per cent.

Are they poorly paid for the hours they work?

Here, MPs are on a stronger footing. A survey by The Hansard Society found that new MPs work an average of 69 hours a week, excluding travel, with constituency casework representing the largest share of their time (28 per cent), followed by constituency meetings and events (21 per cent) and debates in the Commons Chamber (21 per cent).

The poll also found that more than half (56 per cent) took a salary cut on entering parliament. 

Are they paid less than parliamentarians in other countries?

In short, yes. 

Japan £165,945

Australia £120,875

Italy £112,898

US £108,032

Canada £99,322

EU MEPs £75,114

Ireland £74,495

Germany £73,953

UK £66,396

France £53,186

Spain £27,130

Do the public think they should be paid more?

Unsurprisingly, they do not. A YouGov survey found that 17 per cent believe MPs should receive the proposed pay rise of around £10,000, with 68 per cent opposed.

Fifty per cent believe thay are paid too much already, 35 per cent that their pay is "about right" and 9 per cent that they are paid too little. 

Some of the 232 new MPs pose after the 2010 general election in Westminster Hall. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.