Parliamentary gravy train

Prem Sikka on the scandal of MPs’ second jobs and government complicity

Some may be enthralled with neoliberal democracy, but its fault lines are all too visible. Rampant inequalities, inequitable distribution of income and wealth, lack of workplace democracy and unchecked corporate power are some of the daily manifestations.

A major cause of the social problems is that too many Members of Parliament, including former ministers, do the bidding of corporations and wealthy elites and corporations through a variety of consultancy and advisory contracts. In addition to the £82k-a-year salary as an MP, around 90 of the 360 Conservative MPs, five of Labour’s 199 MPs and two each from the SNP and the Lib Dems, have second or multiple jobs. They are hired to advance the interests of their paymasters, provide privileged access to policy makers, neuter aggressive regulators and nullify the emergence of threatening legislation.

The sale of political influence has created an arms race in which corporations and the wealth elites outbid each other to hire well-connected MPs. Citizens’ interests are marginalised. People see it as institutionalised corruption. Such concerns have been fuelled by revelations that 32 MPs collected over £1.4m from corporate consultancies. Few, if any, MPs offer their time to charities, social welfare organisations or food banks because there is no money in it.

There are calls for bans on MPs taking second/third jobs, which in turn are resisted. The government’s favoured approach is that “any undertaking of paid employment must remain within reasonable limits”. The term “reasonable limits” is being interpreted as 15-20 hours a week. Such reforms will be cosmetic, unenforceable and will make no difference to the self-enriching capacities of MPs. The following examples from the House of Commons Register of Members’ Financial Interests [pdf] provide some food for thought:

  • Tory MP Chris Grayling received £100,000 per annum for working seven hours per week from Hutchison Ports Europe.
  • Former Conservative whip Julian Smith received £144,000 from three consultancies with Hygen Energy, Simply Blue and MJM Marine, requiring the commitment of 20 hours a year, 1-2 hours per month and 30-40 hours a year respectively.
  • Former Conservative Party leader Sir Iain Duncan Smith collected £20,000 from Tunstall Health Group and £25,000 from Byotrol Technology for 30 hours a year and 12 hours a month respectively.
  • Just before becoming prime minister, Boris Johnson received £94,507.85 from GoldenTree Asset Management for a speaking engagement involving two hours’ work.
  • Former MP Owen Paterson received £8,333 a month for 16 hours from Randox Laboratories, which adds up to £100,000 a year.
  • John Redwood received £48,222 a quarter (£193,000 a year) for 50 hours a month from Charles Stanley, an investment advisory company.

The above examples show that the proposed limits will not derail the consultancy gravy train. Any ban with “reasonable limits” will encourage determined MPs to pursue creative strategies to comply with the letter and not the spirit of regulation.

The calls for a total ban are countered with claims that this will reduce the income of MPs and persuade many to quit parliament. “Good riddance” would be the response from many citizens.

Some MPs say that to retain their professional status for a post-political career they need to take on second jobs. Others say that consultancies enable them to meet interested parties and enhance their role as legislators, and that a total ban will reduce their effectiveness.

Such objections can be addressed with a more effective reform. Under this, there would be no limit on the number of jobs that any MP can hold. However, they would not receive a penny from that now or in the future. They would also legally be prevented in their post-political career from working for these employers for five years after leaving parliament. All second job earnings would go directly to a newly established Foundation for Democracy. At regular intervals, the accumulated funds would be allocated to political parties in accordance with a formula that takes account of party membership and share of vote in local, national and other elections. This reform needs to be statutory as too many MPs show little respect for voluntary codes. Statutory reforms should also empower citizens to take legal action against offending MPs.

The above proposal does not prevent MPs from continuing with their professional careers or the professed desire to become involved in worldly or corporate matters. It avoids debates about “reasonable limits” and is easily enforceable. It ensures that MPs do not receive money from outside sources to skew their judgment. Second jobs have always been about normalising corrupt practices rather than serving the people. Deprived of possibilities of personal enrichment from influence-peddling, most MPs would cease to be hired guns.

The benefit of the above reform is a parliamentary system focused upon the welfare of the masses rather than corporations and wealth elites. It will enhance confidence in institutions of government.

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