Which MPs are cashing in?

New research, published in the American Political Science Review, has revealed more into the after-life of being an Member of Parliament (MP), picking out Conservative MPs as those most likely to acquire lucrative outside employment both during and after office. It may be a common conversation topic for the general public to show frustration and concern over Banker’s bonuses or MPs expenses at the moment, but it is not a recent fever of scandal, nor is it limited just to these two outright betrayals of public trust towards the governing elites. Over the past couple of decades, scandals such as the ‘cash for questions’ or the ‘cash for honours’ headlines have hit our national media, but a new study, one which tips the approach of ‘political favours’ on its head, reveals some alarming suggestions about the legitimacy of our elected representatives working to serve the public interest.

“In October 1989, Nigel Lawson resigned after six years as Chancellor of the Exchequer under Margaret Thatcher.. Four months later, while still a MP, Lawson was named a nonexecutive director at Barclays Bank with a salary of £100,000 – roughly four times his MP pay. The afternoon the appointment was announced, Barclays’ market value rose by nearly 90 million pounds”. As this anecdote begins to suggest, serving in public office is in reality more beneficial than we may at first think. However, whilst stories, such as the one just mentioned, aren’t uncommon within the Conservative Party – you will struggle to find this practice happening within the Labour Party.

Through the maths of working out the financial benefits, which involves comparing the wealth (at death) of MPs with that of politicians who ran for Parliament unsuccessfully, Conservative MPs died almost twice as wealthy than compared to Conservatives who fruitlessly ran for parliamentary office.

The hows and whys are pretty simple too. Becoming a Conservative MP, unlike their rivals in the Labour Party, more than triples the rate of corporate nonexecutive directors amongst the Conservative Party. It is a straight-forward situation of firms gaining political influence over party policy and the government agenda by hiring current and previous MPs and Ministers. However, for Labour MPs, this is not a likely prospect. Findings into funding bring to light as to why this is. Financial support and influence, within the Labour Party, comes mainly from trade unions who predictably secure a special loyalty without the need for the in-direct forms of hefty ‘backhanders’, as most would naturally see it, as those in the Conservative Party who are both less committed to a particular group, and free under party regulations to forge relationships with various donors.

It is estimated that at least 39 percent of British firms have politicians in the executive ranks or as major shareholders. The researchers produced graphs to show the ‘interests’ reported by MPs in the years 1975 (the first year disclosure was required), 1990 and 2007. The graphs show those involved in directorships, journalism, consultancies, employment, union sponsor and shareholdings. Whilst many MPs had outside interests, the Conservative MPs who were typically linked to corporate boards (across all years examined) were in stark contrast to Labour MPs who were much less likely to have any such links at all. Indeed, even sponsorship by trade unions, unsurprisingly taken up by Labour MPs, was banned by the Labour Party in 1996 – perhaps to highlight the type of ‘old-boy network’, ‘favours’ and ‘carrots’ that the Tories are typically long entangled in.

All in all, being a Conservative MP has many more financial incentives from an objective point of view, but no such effect is found from becoming a Labour MP. Should this be something we worry about? If the temptation is there, and it is, undoubtedly, hard to patrol or accuse anyone of voting a specific way to gain favours, then surely this temptation will be plucked off the tree quite easily? Well, it is all above board! Joining a company after you have left office is not against the law, it is not something confined to this country (in fact, the Americans have labelled it as the ‘revolving door syndrome’ as it is such a big issue over there), and it is not something we can restrict on the basis that someone might mistreat their influential position in the future, or if they have the chance, during office.

Whilst there are regulations in place to prevent MPs from taking on other jobs and requiring all MPs to list any financial interests they may have which could influence their judgement, as one MP commented during an interview in the mid-1980s, “If someone was up to something they wouldn’t register it” – perhaps proving that we would find it very hard to really know what secrets our elected public officials were imprisoning and hiding to avoid disgrace.

Comments

Leave a Reply