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11 January 2013updated 26 Sep 2015 1:01pm

MPs can ask for higher wages, but they can’t appeal to the market to get them

Parliamentarians' wages aren't set by the free market, so it's no use appealing to it for a raise.

By Alex Hern

MPs wages are not subject to the normal vagaries of the labour market.

Despite the fact that when people think of their own salaries, they think in terms of experience and skills – “I’m doing a difficult job, I should be paid more” – in fact the bulk of a wage is made up of the far simpler criteria of supply and demand. You can be as experienced as you like, but if a hundred other people with similar experience would do your job for less pay, the wage is going to decrease.

There are always people who would be an MP for no pay. In fact, there were, for two hundred years. The in-kind benefits of being an MP – the power, the authority, the membership of an elite club – were enough to convince people that it was worth their time. So too, of course, were the ample opportunities it gave to make money in less salubrious ways.

The problem is that if you pay nothing for a job, then you only get people who have a source of income on the side. That was fine while politics was a rich person’s game, but with the rise of working-class representation, it became more problematic. Early Labour MPs were often paid for by trade unions, but by 1911, the first salaries had been introduced.

In a way, these salaries were there to attract the best talent, it’s true. But the decision wasn’t one of labour economics. It was more a question of democratic morality: assuming we want people without an independent income to be MPs, what standard of living do we want to provide for them?

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That is still the question which we ask today. For all that MPs like to compare their salaries to other jobs – they earn less than senior civil servants, or than the best head-teachers, or footballs – their salaries are not set by the same process. If they were, they’d be due a wage cut, not an increase.

It’s hard to tell exactly, given that voters have to elect someone every election, but there certainly seems to be an oversupply of potential MPs. Every marginal seat apparently contains at least two people who would be good MPs, for instance. If we were to run parliament like a business, that oversupply of eligible candidates would suggest that the wage was too high, not too low.

There is, however, the problem of corruption. The lower an MP is paid, the more open they are to advances from people who earn more than them. That’s not just corruption in the form of bribes and kickbacks; it’s also the more subtle corruption that comes from wanting to please someone who can take you out for a meal which costs more than your rent, or split a bottle of wine older than you.

Of course, if MPs want to argue that that’s the reason they should have a pay rise, good luck to them. It will be interesting to see the first person who stands up in front of the cameras and admits to being corrupt because they aren’t paid enough – and even more interesting to see their first re-election campaign.

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