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Sunday, 24 July 2016

MINIMUM WAGE MINISTERS

Thirty junior Ministers in Theresa May’s Government earn barely the minimum wage for their ministerial duties. Just £15,435 a year which is £7.42 an hour for a 40 hour week.

The lowest rank on the Ministerial ladder is the Parliamentary Under-Secretary. Above them are Ministers of State and at the top in charge of the Department is the Secretary of State who also attends Cabinet.

A Minister’s pay comes in two parts. 

First, they are paid as an MP. That salary is determined now by the Independent Parliamentary Standards Authority (IPSA). Currently that it is £74,962, a rise of £962 on the £74,000 paid to MPs returned at the 2015 General Election. 

Second, they are paid as a Minister. The Government no longer publishes a list of Ministerial Pay. The House of Commons, IPSA, the Cabinet Office, and Downing Street, all told me they did not know what Ministers were paid. Eventually I was sent a list of Ministers’ salaries in Regulations dated 14 July 2011. Since then, I was told, Ministers’ pay had been frozen.

But the amounts in the Regulations were clearly not right. It then turned out that when David Cameron froze Ministers’ pay he froze the total, including the MPs’ pay. So as MPs’ pay rose each year the extra paid to a minister was cut. In 2011 a Cabinet Minister was paid £68,827 on top of their pay as an MP of £65,738. A total of £134,565. But year by year as their pay as an MP rose the extra paid as a Minister was frozen leaving them with same total. When their pay as an MP rose to £74,000 in April 2015 their pay as a Cabinet Minister fell to £60,565. That is a cut in their Ministerial pay alone of 12%.

That offsetting ended in April this year. So when MPs’ pay rose by 1.3% in line with overall public sector pay to a total of £74,962 the pay as a Cabinet Minister stayed fixed at £60,565. So the total now is £135,527. That figure was confirmed to me by the House of Commons but no one could say what junior ministers was paid.

Applying the same arithmetic and the 2011 Regulations it turns out that a Minister of State is paid £24,740 on top of their MP’s salary and a Parliamentary Under-Secretary gets just £15,435 for their ministerial duties on top of their MP’s pay. If they work 40 hours a week on purely ministerial duties then they are being paid £7.42 an hour for doing them, barely above the National Living Wage of £7.20 an hour.

The total of £90,397 paid to a Parliamentary Under-Secretary is, or course, a very high income. By itself it would put a Minister without a family among the richest 1% of the population. But 61% of that population has a total income higher than the amount Ministers are paid for their Ministerial work.

History
The history of Ministers' pay is complex. After he became Prime Minister in June 2007 Gordon Brown decreed that Ministers would not take available pay rises and their pay was frozen in 2008/9, 2009/10 and 2010/11. So even though available pay was higher Ministers did not take it, keeping the pay that was set on 1 November 2007 plus the MP's pay set on 1 April 2008. 

After the 2010 election David Cameron went further and announced a 5% cut in Ministers' pay. The 5% was calculated from the amounts Labour Ministers had taken. He also followed Gordon Brown - who had cut his pay by £25,000 - and reduced his own pay to around £8000 more than a Cabinet Minister. It is those amounts which are set out in the 2011 Regulations.

On 1 April 2010 the total actually paid to a Parliamentary Under-Secretary was £94,142 comprising £63,291 as an MP and £30,851 as PUS. Today’s Parliamentary Under-Secretary gets half the pay as a Minister and £3,745 (4%) less in total.

Lords
Ministers in the House of Lords have their own pay scale as they do not get paid as an MP. These were also set out in the 2011 Regulations. It sets pay for a Cabinet member in the Lords at £101,038, a Minister of State at £78,891, and a Parliamentary Under-Secretary at £68,710. These amounts have been frozen since then and are still paid at those levels.

Peers can claim a tax free allowance of £300 for each day they attend the House of Lords. But Ministers and others who are paid a salary for their duties there cannot claim this daily allowance. The House of Lords sits on average for 150 days a year. So an assiduous Lord who attended every sitting day could claim £45,000 which is equivalent to earning £64,712 before tax. Ministers do attend frequently and the extra they get as a Minister on top of the allowance they could claim as non-Ministers is probably less than their Commons equivalents.

More information

Version 1.01
25 July 2016