If the prime minister’s pay is to be the new benchmark for senior remuneration perhaps we should increase the premier’s salary rather impose a ceiling on thousands of executives?
Once you pay the leader of the government £194,254 for running an enterprise with a turnover of £700bn, any higher reward for a smaller job highlights the disparity in pay. The prime minister receives no options or bonuses either. You can criticise him for not performing (and criticism is one of the many downsides of the job) but the tenure is at least as insecure as that of any corporate executive.
The pay disparity is illustrated by the state machine having to pay civil servants more than the PM - and, unlike companies, the government cannot recruit its leader from abroad. If the Downing Street job is regarded as a loss leader for future sales of memoirs and an internship for well-paid directorships, then we are likely to get the wrong sort of leader.
But the PM’s paltry pay is being used as a yardstick for measuring other salaries with the implication that anyone earning more is overpaid. Shadow chancellor George Osborne argues that written permission should be required for any public employee to be paid more than the prime minister.
The revelation by the BBC (turnover of £4.3bn) that it has 50 senior staff paid more than the PM - and that excludes “stars” like Jonathan Ross - does prompt the question of whether they are paid too much or the prime minister too little. The BBC’s answer –To cut staff rather than to cut pay –also suggests it has yet to think like a private-sector corporation.
So the test of the PM’s pay has worked as a good shorthand in shaming one organisation into action. If it makes the country’s local authorities attempt to justify why a council chief executive should be paid three times as much as the country’s chief executive the application of the test is worthwhile. Ditto quangos.
But in business, a middle manager can take home more than the prime minister — and in the City, a junior banker would see £194,000 as a bonus rather than basic pay. A FTSE chief executive would not swap running his company for running the country for so little.
Is there a way to reconcile the disparity? Indeed, is there a need? They may not be the best candidates, but there is no shortage of people willing to lose their privacy and risk their reputation to become PM. And despite the scale of the task in leading a country, it is highly questionable whether most political leaders could manage a major business - any more than most council chiefs or BBC bosses could run a company.
Nor is the public mood ready to raise political pay after the expenses row. So the PM will continue to be underpaid, but asking those receiving more to defend their rewards remains a good brake on excess remuneration.
