The economics of Stephen Byers
Here’s a horrible example of the middle England error from David Aaronovitch:
For eight years [Stephen Byers] remained on the backbenches, periodically suggesting an engagement in forming policy ideas for Labour’s future, but then announced his retirement at the next election. He was isolated and possibly rather bitter.
And almost certainly not well off.
Almost certainly not well off? Consider this.
1. As MP, Byers is paid £64,766 a year, or £1245 a week. This is more than three times the median weekly wage. And it puts him well into the top 10% of male full-time earners; it’s 15% more than the 90th percentile male earner gets.
2. Having been an MP for 18 years, Byers should be eligible for a pension (pdf) of almost £30,000 a year. This is more than 75% of his North Tyneside constituents earn. And this ignores his income from chairmanships and consultancy work, which might add another £10,000 a year.
3. In his four years as a minister, he earned (pdf) around £400,000. It would take 22 years for the median earner in his constituency – who gets £348 a week – to earn that much.
4. When he was sacked as a minister, he was entitled to a severance pay-off of over £17,000 – equivalent at the time to a year’s wages for his median constituent.
Not bad going for a graduate of Liverpool Poly who is practically innumerate.
*
I’m actually inclined to believe Stephen Byers when he says that he exaggerated what he would be able to do for the corporate clients he’s now hustling for, if only on the grounds that it’s difficult to see what an ex-transport minister could do for anyone that would be worth £5000 per day (or would enable whoever hired him to plausibly claim that the cost was worth it). And it’s not as if he’s fresh goods either. His last ministerial post ended in 2002, which means that a lot of the contacts he made at the time, both government and corporate, will have moved on. I’m not particularly impressed that he helped Tesco out either. “Doing things for Tesco” is as near as this government has to an expression of principle.
As Justin points out, influence peddling was always part of the New Labour project. It follows rationally enough. The whole thing was supposed to be post ideological, which means in practice that you spend your time managing, choosing between and sometimes working for projects proposed by competing interest groups. At first, the public pays you in your capacity as minister. Then the taxi meter starts, as Byers pointed out.
I liked the bit about being able to get access to Tony Blair. It’s as if the whole network had simply transferred itself out of parliament and reconstituted itself as a kind of shadow government. But would Tony return Stephen’s phone calls? Maybe. Blair seems to have set himself up as a kind of global influence brokerage running through various foundations which enable people who might like to work together in various ways to meet and see whether they get along. So it depends on whether the people Stephen can scrape up are worth Tony’s time, and that of his valuable friends. So maybe a headline charge of £5000 makes sense. He’s got to pull in some heavy hitters to make the other heavy hitters take any notice of him. I don’t suppose he’ll be getting them now.
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Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
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Reader comments
Talk about the avarice of politicians:
“Hospital consultants, GPs and senior civil servants were furious last night after being told that their pay would be frozen this year while MPs enjoy a 1.5 per cent rise.”
http://www.timesonline.co.uk/tol/news/science/politics/article7057415.ece
Not bad going for a graduate of Liverpool Poly
Oy, Chris, you can do better than that. (And yes, I do have degrees from two Russell Group unis. I know my posts usually suggest otherwise
)
I’m a graduate of Liverpool Poly.
Blairite defends Blairite.
I think Aaronovitch didn’t finish the sentence, or some sub chopped it.
Probably should read “And almost certainly not well off compared to Tony Blair”.
But Mr Dillow, have you not argued in the past that judges and politicians need to be rewarded to a level that they do not succumb to corruption? There is much logic to that argument; if MPs were paid a salary that was significantly lower than the one that they might earn employing non-political talents, they would be more likely to supplement their income in illegal or immoral ways. But most of us would agree with the proposition above that ministers get well paid, and get paid off enough when they stand down.
The problem, therefore, is how to manage those with little non-political talent who wish to live to the standard to which they should never have become accustomed. Fiddling around with the rules about lobbying in an area of previous responsibility may deliver a few benefits. An enforced two year (long enough?) gap would mean that there was sufficient change in government and suppliers that an ex-minister would be relying on comprehension rather than contacts? If an ex-minister uses understanding of a market to his/her benefit after that break, I can’t see an ethical problem.
Further than that, I am not sure how much we need to manage ex-ministers. If a company employs an ex-minister in a field in which they have no expertise and few contacts, who is harmed beyond company shareholders? The idea that an ex-minister, as advisor, brings insight to the workings of government is deluded almost to the point of fraud. What Gordon thought last week is no indication of future plans.
Today’s Leicester Mercury reports that the city’s second most odious MP, on retirement, will be joining the board of Eurotunnel. Eurotunnel is a glorious adventure that can’t make money, so the £50,000 for Patricia Hewitt’s employment is a trivial concern. But I can’t help wondering whether her appointment was an expensive joke: at corporate dinners, seat her adjacent to the people that the board most dislike, I suppose.
@5: “Today’s Leicester Mercury . . ”
Patricia Hewitt has been energetic in pushing many government policy initiatives besides the £12.7bn project to create a national database of personal medical records when she was health minister. As DTI minister, she was also one of the most enthusiastic members of the Cabinet for joining the Euro through to Gordon Brown’s announcement in June 2003 that it was not in Britain’s interest to do so – at least, not for the time being:
“Trade and Industry Secretary Patricia Hewitt has trumpeted the benefits of euro entry for British industry by saying most inward investors supported the move.” [January 2003]
http://news.bbc.co.uk/1/hi/uk_politics/1776964.stm
“The government’s ailing £12.7bn IT programme to overhaul paper-based NHS patient records in England is close to imploding, potentially triggering a deluge of legal claims against the taxpayer running into billions of pounds, which could start to emerge weeks before a general election.” [21 March 2010]
http://www.guardian.co.uk/business/2010/mar/21/nhs-software-system-close-to-imploding
In Wales, they are complaining: “Porters, IT staff and administrators have routine access to confidential medical records in the Cardiff and Vale health board, according to research.” [26 March 2010]
http://news.bbc.co.uk/1/hi/wales/8588567.stm
I do wonder if Eurotunnel quite appreciate the scale and scope of Patricia Hewitt’s err . . . talents.
Charlieman: “There is much logic to that argument; if MPs were paid a salary that was significantly lower than the one that they might earn employing non-political talents, they would be more likely to supplement their income in illegal or immoral ways.”
But how much is enough to prevent corruption?
My experience would suggeset that when someone is corrupt, it’s the idea of having more money per se (independently of the specific amount) that appeals to them, and the general idea of being the all-knowing insider with the savvy to play the big boys game and get one over on the moralistic losers.
The actual amount of money they already have (unless they’re actively struggling to get by) probably doesn’t make that much difference to the incentive.
I think the article is right on target with the idea that New Labour’s corporatists probably don’t see much wrong with influence peddling. From the start, they were unable to tell the difference between promoting free market economics and promoting the interests of the big players in that free market.
@7: “From the start, they were unable to tell the difference between promoting free market economics and promoting the interests of the big players in that free market.”
That’s fair comment but could indicate a lack of competence, not motivation by avarice, which is the principal charge being made about Blairite ex-ministers.
Btw in the news on Sunday night, two more ex-ministers have been reported peddling their influence:
“Two more former Labour ministers were dragged into the row over MPs touting for lobbying work today, as Adam Ingram and Richard Caborn were secretly filmed offering to use their contacts in exchange for fees.
“Ingram, the former armed forces minister, and Caborn, the former sports minister, followed Geoff Hoon, Stephen Byers and Patricia Hewitt in being caught out in a sting set up by the Sunday Times and Channel 4′s Dispatches programme. Both denied they had broken any rules.”
http://www.guardian.co.uk/politics/2010/mar/28/lobbying-sting-more-former-labour-ministers
The cultivated notion that politicians are motivated to promote community values and to serve the public interest has become laughable.
@7: “From the start, they were unable to tell the difference between promoting free market economics and promoting the interests of the big players in that free market.”
That’s fair comment but could indicate a lack of competence, not motivation by avarice, which is the principal charge being made about Blairite ex-ministers.
Sufficiently advanced incompetence is indistinguishable from malice.
I feel sure an incoming Conservative government will award Patricia Hewitt a Peerage for her personal contribution to Labour’s defeat.
I wonder if this recent traducing by Labour of its critics is due to incompetence or malice.
Bob B: “That’s fair comment but could indicate a lack of competence, not motivation by avarice…”
…or perhaps both.
I’m not saying that taking a “what’s good for corporations is good for the country” attitude excuses personal corruption. I’m just suggesting that a politician who believes that from the start is a lot more likely to consider taking bribes from corporations.
@12: ” I’m just suggesting that a politician who believes that from the start is a lot more likely to consider taking bribes from corporations.”
As many lobbyists and corporations have doubtless discovered, there are all sorts of ways of buying influence, many quite legitimate. Milton Friedman famously said that there’s no such thing as a “free lunch”.
Try this very recent briefing on lobbying produced by the House of Commons Library – which I’ve only just come across:
http://www.parliament.uk/commons/lib/research/briefings/snpc-04633.pdf
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