Talk is cheap, envy is expensive

Whether in the public or private sector there is an unarguable case for paying people what they are worth, says Steve Norris – however unpopular it might be with the press and public.

Talking about money is often considered to be bad taste. But I am going to anyway, because these days the way we treat pay and wealth is unhealthy and dangerous.

When I retired from the Commons I said I wanted to spend more time with my money. While it was a throwaway line, I admit it was also close to the mark. I had built a business before coming into the House and spent the next 14 years living off it. By the time I retired there was precious little left. I knew the only way I could enjoy the standard of living I aspired to was to go back to the private sector. I have been lucky enough to do so in the 14 years since.

The truth is we have to talk about pay in a much more grown-up way. We are indeed all in this together. The only fair way to approach serious spending cuts is to ensure that at every level of income, some pain is felt.

So I do not argue with a 50 per cent tax rate on income over £150,000 at least for the present. I agree that some, although by no means all, bankers are overpaid, spoilt brats.

I agree that some, but again by no means all, people in the public sector earn well and deliver very little. But the politics of envy are the most corrosive politics of all. We surely know by now that we don’t make the poor richer by making the rich poorer.

When David Cameron became prime minister, he announced a five per cent pay cut for all ministers and a freeze for five years. He took a salary of £142,500 a year. It is impossible to compare his job with any other, but if I assert that the prime minister is ludicrously underpaid by the standards of private business, I doubt many will disagree

The only reaction most sensible people in industry have to the number of people who earn more than the prime minister is how clearly it demonstrates that we still don’t have the intellectual confidence to pay the prime minister properly.

Senior private sector pay is more generous because this is a competitive market in which top talent is increasingly mobile, and not just within the UK. If footballer Fernando Torres is worth £50m, it is because someone, somewhere, thinks he is worth it.

The same is true of the City. If we could agree a truly effective global ban on bank bonuses, we might think again. Banks themselves would be delighted. But we patently can’t.

Whether we like it or not, that is the world we live in. £142,500 is certainly more than 95 per cent of the country earns in a year, but the blunt truth is that while it may not play to the tabloids, if we want to recruit top quality people to manage the extraordinarily complicated business that is the average local authority, we need to pay the going rate. Not to do so is to condemn every citizen of that authority to inferior service.

We should say this loud and clear because it is a truth beyond party politics. As far as MPs are concerned, we now run the serious risk of regressing to the days in which parliamentary service was essentially an amateur pursuit to be entertained only by those with private incomes, or for whom the current salary represents the summit of their aspiration.

All this is blindingly obvious. It is high time we all, both inside and outside Parliament, said so loud and clear.

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