Friday, May 08, 2009

Nobody Does It To Get Rich

Houghton Hall - built on the proceeds of Robert Walpole's efforts not to get rich in public service

On this day of trough name and shame, Tyler has heard many MPs saying "I can assure you - nobody comes into politics to get rich... we become MPs to serve the public".

Set aside that last point, and resist the temptation to scream "I most certainly don't want you servicing me!" What are the facts about them getting rich?

As things stand, MPs get a salary of £64,766 pa. But in addition, they can claim £100 grand pa to employ other members of their family to watch porn films (the so-called "staffing allowance"), £22 grand pa for "incidental expenses", £24 grand pa for "additional costs", £10 grand pa for "communication", 20p per mile for riding a bike, and various other tens of thousands for sundries.

Not forgetting, of course, membership of the most generous final salary pension scheme in Britain.

Tot it all up, and you're looking at a package well north of £200 grand pa.

So how does that stack up against the rest of the population?

According to the latest official ONS stats (the 2008 Annual Survey of Hours and Earnings), the median gross pay for full-time workers is £25 grand pa. Most workers get no additional allowances, and no pension to speak of.

So relative to the median, MPs get something like ten times as much.

What about relative to higher earners?

Across the whole economy, top decile full-time earnings are £50 grand pa (ie only 10% of workers get more than £50 grand pa).

So MPs do considerably better even than our top 10% of earners (most of whom will not get anything like the same additional allowances and pension).

The ONS don't publish the data on earnings above the top decile, but a combination of data from the IFS and Tyler's trusty fag packet says that MPs are actually in the top 2-3% of the income distribution.

They may not have become MPs to get rich, but once they've made it, they seem to do just fine.

*Footnote - the original version of this post quoted a figure of £63,291 pa for MPs' salary. This was incorrect - Tyler made the mistake of trusting the official House of Commons Information Office Factsheet M5. The correct figure is £64,766. Many apologies - accounting never was Parliament's strong suit.

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