Watching the worms wriggle

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There used to be an advert for a large insurance company which claimed that they would never make a drama out of a crisis. It would be a piece of good advice for the current government, whose leader seems reluctant to let any crisis go past without turning it into a long drawn-out drama, largely because of a lack of attention to detail and a strange belief, which persists in the face of all experience to the contrary, that quick action (or, even better, a quick verbal promise of future action), the consequences of which have not even been considered momentarily, will make the crisis go away. He thought that the Paterson issue would go away once he instructed his MPs to do what the editor of the Telegraph told him to do, and he thought that he could kill the ‘second jobs’ issue by introducing a partial ban. The problem, as ever, is that neither was given much thought beyond the expected headlines.

One of the results today is not just that different ministers are giving different responses as to what the new policy means, but some ministers are even managing to contradict themselves. This morning, apparently, the International Trade Secretary told Times Radio that MPs should be able to work 8-10 hours a week and told BBC Breakfast that 10 or 15 hours a week was reasonable, before going on the BBC Today Programme to suggest a figure of 10 to 20 hours per week. Maybe they should just have stuck to asking her to state the length of a piece of string. The problem with the government’s approach is that every ‘quick answer’ which they come up with merely opens the door to more questions. And the detail just hasn’t been thought through.

The underlying question, which hasn’t been properly asked as yet, is ‘what are MPs for?’ Over time, the job has developed into something of a mish-mash of different and sometimes conflicting roles. The government has been trying to talk up their role as working for their constituents, and it’s true that most MPs do a lot of casework on behalf of their constituents. Or is it? From observation, most MPs delegate most of that work to their staff. It is often the caseworkers who meet with constituents, do the necessary research and write the letters; an MP with a good and well-run office has to do little more than sign the letters placed in front of him or her. And with the technology to scan signatures into computers, I wonder how many actually do even that. There is an expectation that MPs will show their face at various events in their constituencies, but it is clear that many (particularly in ‘safe’ seats) spend little time on that either.

They do have a role in passing legislation though parliament, but for most of them, that role is limited to turning up and voting the way their party’s whips tell them to vote, and many will not even have read the legislation on which they are voting. They have a theoretical role in holding the executive branch to account, and that’s a role which many of them consider to be important, but faced with an executive which follows the lead of a man who either avoids answering the question or simply lies, it’s not a role at which most of them are, or can ever be, terribly effective. And it is, in any event, more of a role for the opposition members than those on the government benches who are generally encouraged to lob soft questions to ministers rather than challenge them.

They also form the ‘gene pool’ from which ministers, shadow ministers, and committee chairs can be drawn. For those whose motivations are to do with their own careers, this may well be the most important role of all. That isn’t necessarily the view of those who put them there, though.

Idle hands make mischief as the saying goes; for many backbench MPs in a situation where the government has a secure majority of 80, a majority endangered only by its own recklessness and incompetence, it’s easy enough to see how – for all their claims of working 70-80 hour weeks – there is scope for enough of them to treat the gig as a part-time one, and enrich themselves by pursuing other avenues at the same time. Add in the culture of corruptness of a government which awards contracts, honours and benefits to its friends and donors, and the attraction to businesses of paying an MP to promote their interests is obvious. It is only those in receipt of the cheques who are naïve enough to believe that they are being paid for their expertise and knowledge rather than for their access to power.

It’s tempting to argue that all outside work should be banned, but there are a few complications. Doctors and lawyers, for instance, need to demonstrate that they are still practicing to maintain their licences, and given that they could lose their seats at the next election, it isn’t wholly unreasonable to allow them to do the minimum required to maintain the currency of their licences. There is though, as far as I’m aware, nothing which requires either that they be paid for their efforts or that they retain any monies thus earned. If their salary as an MP was tapered (like Universal Credit for example), it would be reduced by the amount of any external earnings. Or they could simply donate the extra to charity. Lots of MPs also get paid by the media, whether for writing columns or being interviewed; one could legitimately argue that that is part of their responsibility to communicate with their constituents, and express their political views. But aren’t they, in effect, already being paid for doing precisely that through their salary?

It isn’t just about outside work. In some ways, being paid to do something is more honest than receiving gifts (free holidays in Mustique or Málaga, anyone?) for, allegedly, no consideration at all.  It is true that some MPs get paid less as an MP than they might get paid for doing other work (and I have myself fought elections knowing on some occasions that such would be the outcome), but a salary of over £80,000 a year puts them in the highest 5% of UK citizens. There is no evidence at all that increasing the salary would draw in more talent; indeed, many might suspect that it would simply draw in more people whose interest is more in the money than in any concept of public service. In any event, most electors don’t vote on the basis of the candidates’ ability and experience anyway, they vote according to the colour of the rosette pinned to their clothing.

Any system of rules which attempt to define which outside earnings are acceptable and which are not will leave loopholes and grey areas, and the unscrupulous ( and the ‘unscrupulous community’, if I may coin a phrase, often seems to be over-represented amongst politicians) will take advantage. In an attempt to overcome a run of bad publicity, Johnson has opened a large can of worms. The only way to shut it completely is to cap MPs earnings at the level of their already generous salary. I can confidently predict that the worms will continue to wriggle for the foreseeable future.

Agreeing with the Tories

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Last week, the Tories in the Assembly returned to one of their all-time favourite themes – high salaries in the public sector.  This time, it was the health service which was the subject of their ire, and they seem to have a particular fixation about any salaries which are higher than that of the Prime Minister.  The Labour government responded in the traditional manner of those who support paying high salaries, talking about the need to ‘attract the best’ to fill the top jobs.  In some ways, this is almost the reverse of the position one would expect the two parties to take.  Traditionally, Labour would oppose high salaries, and the Tories would talk about needing to attract the best. 

I can understand that, for someone who genuinely believes that high salaries attract the best candidates rather than simply the greediest, capping those salaries at an arbitrary level (‘the salary of the Prime Minister’) would be a damaging interference in the employment market, and would lead to the people in the top jobs being sub-optimal for the performance of the relevant organisation.  It follows that the Tories cannot believe that the way to attract the best people is to allow market forces to operate (although I accept that that statement does discount the possibility that they might actually not want the best people to run public services anyway – but they couldn’t really want those services to fail, could they?).  And the reaction of the Welsh government suggests that Labour really do believe that paying higher salaries attracts better candidates, and that good talented people cannot be found at a lower price.

The good news in all this is that I’ve finally found an issue of principle on which I can agree with the Tories and disagree with Labour – I really don’t believe that there is a direct relationship between how much someone is paid and how good they are at their job.  When it comes to salaries of top earners, there is a distorted market in operation in which a self-perpetuating group of rent-seekers push salaries ever higher to serve, ultimately, their own best interests.  What I don’t understand, however, is how it’s possible to believe one thing in relation to the public sector whilst believing that the complete opposite rule applies in the private sector.  So perhaps I don’t agree with the Tories very much after all.

And he was doing so well until then...

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In responding to last week’s release of details about high salaries for some BBC staff, Corbyn made some good points.  He started by saying that the issue isn’t just about a few very high-paid performers in one organization, and that the issue of gender inequality goes much further than that.  I agree.  He moved on to talk about the wider issue of pay inequality, and suggested a statutory limit of 20 times the lowest salary in an organization for the pay of the highest paid.  I might quibble a bit about the number 20, but any number quoted in this context is going to be essentially arbitrary and it’s better to start with a high limit than with no limit, so I agreed with him on that as well.

Then he went and spoiled it all by adding the words “in the public sector”.  Why?  Pay inequality between the highest paid and the lowest paid is a much bigger problem in the private sector than it is in the public sector, and insofar as pay inequality is a driver of wealth inequality and inequality of opportunity, the private sector represents a much bigger problem.  It’s as though politicians, of all colours, can’t resist falling into the meme of believing that the public sector is somehow less useful and needs more control than the private sector, despite all the evidence to the contrary.

On frequent justification for that line is that public sector salaries are somehow being paid for out of ‘our money’, whilst private sector salaries are not.  This is demonstrable nonsense.  Taking just the world of broadcasting as an example, there are three different mechanisms by which we all pay the salaries of those involved.  For programs on the BBC we pay a licence fee for possessing and using a television set; for subscription services such as satellite or cable we pay a monthly fee to allow access to them; and for services supported by advertising, we contribute to the salaries of those involved every time that we purchase any product advertised.  And in every case, that is true whether we watch any of the programs or not.  And in the case of programs supported by advertising, we make that contribution even if we have no television.

In all cases, the salaries of broadcasters and managers are paid for out of ‘our money’, it’s only the route by which we pay that is any different.  Broadcasting is but one example, similar statements could be made about any other industry or activity – ultimately, the salaries of those involved are paid for by us, whether as customers or taxpayers, and the argument that we have a more direct interest in the salaries of those paid for by one particular method stems from ideology rather than logic.  It starts from the underlying assumption that the public sector is somehow a ‘burden’ rather than an asset, and it’s disappointing, to say the least, to see Corbyn effectively starting from the same viewpoint.

Confused and confusing

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Given the unpopularity of politicians in general, proposing a large pay rise for any of them is never going to be a vote winner.  And in proposing to stop the planned pay rise for AMs, the Lib Dems are obviously trying to adopt a populist approach.  Whether it will make any difference to their vote remains to be seen.

It doesn’t look like a terribly honest or thought-through policy though.  In the first place, they signed up, along with the other parties, to the idea of taking AMs’ pay out of the hands of the AMs themselves, and giving the job to an independent panel.  Worse, as I understand it, they also signed up to the guidance and direction given to the panel about the approach that should be adopted.  Complaining about the outcome looks like trying to bolt the stable door.

Having said that, there is something in the basic point that they are making, which is that rises in AMs’ pay should be linked to public sector pay by some formula; but it doesn’t go far enough.  They’re only talking about a formula to determine the size of any pay rise – I’d prefer to see a direct linkage between the salary paid to AMs and the average salary in Wales.  But what I really don’t understand about their proposal is that they seem to want to both have a clear formula linking pay rises to those in the public sector, and to retain the independent panel to determine the level of pay.  What’s the point of retaining a panel of independent members simply to apply an agreed formula?  It makes it sound as though they want to keep the door open for higher pay rises at some future point.  Or is that overly cynical?

Repeating the same mistakes

Tweet Perhaps it was a little unfair to refer to the decision by some AMs to refuse the planned pay rise as “student politics” as Lee Waters did.  But seeing politicians scrambling to be seen to be doing the right thing, almost invariably caveated with variations on the wording “at a time of public sector pay restraint” wasn’t terribly edifying.  The implication is that it’s the timing rather then the principle which is the problem, and that, if only the lower paid were getting a bigger rise then their large rise would be OK too.

I certainly, though, take the point that a large disparity between the salaries of AMs and MPs can give the impression that we value one set of politicians more than another.  But there are two things wrong with simply chasing the level of salary elsewhere.  The first is that two wrongs don’t make a right – the fact that one group of people are overpaid doesn’t make it right to overpay another group simply to maintain comparability.  And the second is that it reduces the question of how we ‘value’ our politicians to a simple financial equation, and there surely ought to be more to it than that.

In confirming the recommendations of the independent salary review body last week, the chair said something to the effect that they’d listened carefully to the public reaction that they’d received, but had found nothing to make them change their minds.  What that tells us above all is that, whatever the criteria being used to set salaries, acceptability in the court of public opinion – let alone public outrage – isn’t one of them.

That in turn raises the question of who sets the criteria that they use, and who appoints the people who then apply those criteria.  And the answer to that question brings us right back to the people who are washing their hands of the problem, and claiming that the board is an independent one over which they have no control.  Because those statements are only part of the story.

The criteria to be used are set by legislation, available here.  In essence, the AMs themselves have set the criteria which are to be used – and a very limited set of criteria they are too, amounting in essence to:

(a) providing Assembly members with a level of remuneration which—

(i) fairly reflects the complexity and importance of the functions which they are expected to discharge, and

(ii) does not, on financial grounds, deter persons with the necessary commitment and ability from seeking election to the Assembly,

Criteria set by AMs can be changed by AMs; if they don’t like the answers being produced, they can change the criteria being used by further legislation. 

And who appoints the members of the Panel?  Well, that would be the Assembly Commission – which includes, conveniently, one representative from each of the political parties represented in the Assembly.  Yes, the same parties which are now complaining about the recommendations made by the people they appointed applying the criteria which they set.

The biggest argument being used to justify the large increase on an already high salary is all about attracting the most able people to sit in the Assembly.  But what is the mechanism by which that happens?  It seems to be down to blind faith that higher salaries = more ability, but there is absolutely no evidence to support that blind faith.

Even if we accept that it is true that there is a problem with the level of ability of at least some Assembly members (and for the sake of argument, I’m prepared to accept that, although I’d also accept the same proposition in relation to the – higher-paid – Members of Parliament, too by way of demonstrating that paying them more doesn’t actually solve the problem), increasing their salary doesn’t get rid of them, it simply puts more money in their pockets.  It’s a remarkably ineffective way of addressing the perceived issue.

There are no formal criteria for the job, and no qualifications are required.  The ‘ability’ required is undefined.  The selection process is not far off being random in relation to applying any tests of ability.  Deploying a salary increase as the only conceivable response to the perceived problem is only ever going to mean that we pay more for the same sort of people.  And the beneficiaries?  Ah, that would be the same people who set the criteria and appoint the people to apply them…

Poorer dabs

Tweet When poor old Malcolm Rifkind recently suggested that he was struggling to survive on an MP’s salary, I pointed out that MPs are actually paid more than 94% of the population.  Using the same chart (available here), we can see that our AMs, on their current pittance of £54,390, are only in the 92^nd percentile for salaries in the UK.  The proposals of the review board would raise them up to the 94^th, making them more highly rewarded than 93% of the UK population.

I’ve been unable to find a comparable table for salaries in Wales alone.  But given that we know salaries in Wales are lower on average than those across the UK as a whole, I think we can conclude that they might actually be in about the 92^nd or 93^rd percentile now, and that the proposals put forward last week would take them up to the 95^th or 96^th, if we restrict our comparison to Wales.  The question which follows will be a very simple one for most people: do we believe that AMs need to be paid more than 95% of the population of Wales?

The reaction of the political parties and politicians has been cautious; another way of saying that they haven’t ruled it out.  There have been some statements prefaced with weasel words along the lines of “at a time of austerity, it’s a bad idea”.  That is of course just a coded way of saying “this is a jolly good idea, but the timing is all wrong”.

Two reasons in particular have been advanced in support of the proposed increase, neatly summed up by the Chair of the Remuneration Board in point 1 of his article for the IWA, where he described the decision as “Setting a salary which reflects the responsibilities on AMs in the Fifth Assembly and which encourages the best candidates to put themselves forward for selection (by the parties) and election (by the public)”.

Taking the first part of that, about reflecting the “responsibilities on AMs”, the implication of needing to pay them more than 95% of the rest of us is that they must be carrying more responsibility than 95% of the population.  Leaving aside the ministers (who are actually responsible for running things and taking decisions), what direct responsibility for anything do AMs actually carry?  And how has that responsibility been measured, assessed, and compared to others in order to get to such a result?

As for the second part, who decides who are the “best candidates”, and on what basis?  Is it really true that only those who won’t even apply unless they are paid more than 95% of the rest of us are of the necessary calibre to do the job?  And what is the quality control process which ensures that salaries paid to attract the best candidates don’t end up merely rewarding the indolent and greedy?  Only a tiny proportion of the electorate make any attempt to assess the ‘ability’ of the candidates placed before them when they’re deciding how to vote.  Most simply vote for the party label.  That isn’t going to change any time soon.

The words ‘responsibility’ and ‘ability’ are easy to bandy about, but a great deal harder to define, either in absolute terms or in relative terms.  But they’re used in ways which suggest that everyone knows and understands what is being discussed.  That avoids asking the difficult questions.

Ultimately, there are two ideological constructs at work here, which have been inadequately challenged or considered in arriving at a conclusion, even if we could define responsibility and ability to everyone’s satisfaction.  They are:

1.    That people ought to be paid according to the level of responsibility that they hold, and

2.    That people are driven in their choices by personal financial gain, and won’t apply their ability to any task unless the rewards are high enough.

But the first really isn’t the only possible way of organising rewards, and the second really isn’t the only conceivable motivation to drive people.  If we want a paradigm shift in the way our society is run (and I certainly do), then accepting the ideological constructs of the current paradigm and applying them to those charged with making legislative changes is a spectacularly poor way to set about it.

Poor dabs

Tweet According to Sir Malcolm Rifkind, MPs simply can’t live on an annual salary of £67,000, and need to top up their earnings with outside work.  On my calculations, a salary of £67,000 would put someone in the 95^th percentile for salaries in the UK – meaning that 94% of us have to live on a salary which is apparently inadequate to keep an MP.  How on earth do the poor dabs in Parliament manage it?

The calls from some quarters for an increase in salary for MPs so that they don’t need to seek additional income are somehow not surprising.  The people making them live and move in the same rarefied circles where incomes at that level are the norm rather than the exception; but it’s not the world in which most of their constituents live and work.

It’s not as if MPs carry a great deal of responsibility as individuals.  All most of them are really required to do is walk through the right door when their masters tell them to, so that they can be counted, just like sheep.  Some of course perform useful services for their constituents, although more of that than most people realise is actually delegated to their staff.  The job requires no formal qualifications or experience, and the process of appointment has at least an element of randomness about it.

I’ve argued before that the salary should be linked to a multiple of average earnings.  After all, if they think they’re running the country, why shouldn’t their salaries be linked to what their constituents might see as success?  A multiple of between 1.5 and 2 should be quite adequate – it would mean a significant salary cut, rather than an increase, but might bring some of them back into contact with the real world.

Alternatively, what about the Cuban approach of paying them the same salary as they were earning before getting elected?  They’d all end up on different salaries, of course, but it would mean that higher earners needn’t be reluctant to take on the job; at least they wouldn’t lose.  And such a proposal would also save us a great deal of money; whilst a few MPs earn less than they did before they were elected which would cost us more, there are many more who’d be on a lower salary than they are now.

The one thing that neither of these suggestions would do is attract those who are primarily motivated by the financial rewards.  Those calling for a higher salary might see that as a disadvantage; but most of us would probably see it as a plus.

MPs, peanuts, and monkeys

Tweet A common reaction amongst the very few who were willing to defend a pay rise for MPs last week was that if we want to attract the ablest into politics, we need to pay them more.  One or two even trotted out the old chestnut about ‘getting monkeys if you pay peanuts’.

Leaving aside the not entirely inconsequential fact that anyone who considers a salary of £60,000 a year to be ‘peanuts’ isn’t inhabiting the same world as most of us, there are at least two major fallacies with the argument.

The first is that ‘attracting the best’ is not at all the same thing as ‘deterring the worst’.  In the political world, what determines who gets elected has more to do with the popularity of a particular party in a constituency than with the ability of the candidates.  In the absence of any mechanism for assessment of ability in the election process, any increase in salary could end up, to over-work an already tired cliché, simply increasing the peanut ration for the monkeys.

And the second is that, even if we could agree on the definition of the word ‘ability’ (and that’s a big question in itself), where is the evidence that paying higher salaries attracts more of it?  There’s plenty of empirical evidence that higher salaries attract the greedy and the reckless (just look at the banking sector), but I’ve not seen any that justifies the claim that ‘ability’ follows money.  Indeed, some of the most ‘able’ people I’ve ever met have been academics and researchers; not amongst the highest paid in society very often, but then it isn’t money which motivates them to apply their ability in the way that they do.

In any event, do we want laws made by people who have only been attracted into the legislature by the high salaries paid?  Doesn’t that put a premium on those who are there for their own self-interest rather than the interests of society as a whole?

“I’ve done nothing wrong”

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There was a time when MPs were paid nothing for representing their constituencies, and only the very rich could afford to take on the job.  From an establishment point of view, that system had a lot of advantages; it kept power in the hands of the few and excluded the majority from participation in elected politics.  When the Chartists proposed that MPs should be paid a salary, there was some opposition to the idea, but eventually the idea took hold. 
 

I doubt that the Chartists ever expected that MPs would come to regard that salary as being just a part – and for some, quite a small part – of their overall income; the idea was to open up parliament to people from all backgrounds by making the job a full time one.  Today’s salary of some £65,000 is no small sum; it’s well above what most of the population could ever expect to earn.  Yet still we have some MPs who see nothing at all wrong with ‘supplementing’ that income with all sorts of outside interests, some of them dubious to say the least.

Every time some scandal or other is uncovered there are calls for ‘tighter regulation’, or for more scrutiny of what MPs are up to.  And every time the rules are tightened or amended, the unscrupulous find ways around them, and invariably fall back on the excuse that “I’ve done nothing wrong”, because they’ve followed the letter of the rules.

Time, perhaps, to get back to the original thinking behind paying a salary at all.  A full-time job deserves a full time salary, and that’s what they get.  A generous full time salary at that.  Why should they be allowed to earn any extra money at all whilst carrying out that full time job?  A simple, easy to understand, and easier to enforce rule – no outside earnings at all.  Just a salary for doing the job to which they sought and won election.

Some will no doubt argue that this will keep able people out of parliament, since they can earn more elsewhere.  There are a couple of major assumptions in that, however.  

One is that people are motivated primarily or even solely by the amount they can earn.  Maximising personal financial benefit is one of those assumptions that economists like to make about motivation, but it’s not true for everyone and never has been.  Besides, is that what we really want from our elected representatives?  Pursuit, first and foremost, of their own financial interests?

The second assumption is that the most able people earn the most money.  I’m not sure where the evidence is for that assertion; observation suggests to me that it’s the most pushy and ambitious who end up earning the most, not necessarily the most able.  

It’s not the most able who would be deterred from standing for parliament by a ban on outside earnings; it’s the most greedy.  Would that be such a bad thing?

Top salaries

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There have been two main arguments advanced by those who support the payment of massive bonuses to bankers.  The first is that such bonuses represent payment for results, and the second is that the banks are in competition with each other for their top management and therefore have to pay competitive packages.

Those arguments are, however, based on two assumptions.  Those assumptions are self-evidently true to those making them; but I’m not convinced that they stand up to more objective scrutiny.  The first assumption is that the actions of the individuals concerned make such a significant difference to the performance of the organisation as a whole that it is essential to retain them, and the second is that there is a vanishingly small pool of talented people who can undertake such roles.

The question about the extent to which the performance of an organisation is affected by the performance of an individual is far from straightforward.  It’s probably true that poor decisions by individuals can wreck an organisation – and the banking industry has seen the effects of that probably more than any other sector.  It’s far less obvious that the actions of top management can make an organisation succeed. 

That doesn’t stop them claiming the credit for success when it happens – but there’s often a huge amount of luck.  They just happen to be in the right place at the right time.  And if things go wrong, there’s usually someone else to blame.  So when things are going badly it’s down to the problems of the Eurozone; when they are going well it’s due to the brilliance of the top bankers.  (And it’s hard for politicians to criticise bankers for pulling this trick when they do it so often themselves.)

Competent management teams at banks will generally do better than incompetent ones, but I suspect that a huge proportion of the factors which affect overall success will always be outside their control.  If that’s true, then the pool of people who could manage a bank competently is much larger than we are led to believe.  And if that pool is much larger, then the need to compete by paying huge salaries is correspondingly reduced.

To look at things another way, do we really believe that we couldn’t find competent people to run our banks at salaries very much lower than those being paid currently?  After all, it’s not so very long ago that the banks were indeed run by people whose salaries, in both absolute and comparative terms, were very much lower than today.  And the banks were, I recall, rather more successful too.

Sharing out the rewards

Tweet I’m not sure that I’m really terribly worried about the fact that there are thousands of people in the public sector paid more than the Prime Minister. Superficially it may seem odd that there should be any, but it’s nothing new; senior civil servants have long been paid more than their political bosses.

It’s very often the people working in our public services, rather than the politicians, who have the real expertise. Although there are politicians who have detailed knowledge and expertise in a range of fields, the only formal ‘qualification’ that they need is the ability to persuade people to vote for them. Or perhaps more accurately, get themselves selected where people are going to vote for their party anyway.

I don’t see anything intrinsically wrong with paying experts more than politicians; so the real question for me isn’t how many people are being paid more than the PM, it’s whether they have the relevant expertise and skill to justify their rewards.

The element of the story which interested me more was the comments by Francis Maude. He said that it should not be necessary to offer "stupendous amounts" of money in the public sector, and went on to add:

"You can square the circle of having really good people not on telephone number salaries and massive built-in bonuses. That public service ethos is very important. People will come and work in a public sector for salaries that aren't competitive in a private sector sense."

Up to a point, I agree with him. People who are committed to the ethos of the organisations for which they work, or the services which they are providing, will not necessarily be forever seeking the highest possible level of personal rewards. But what does that say about the private sector?

Are the high rewards of some therefore correspondingly justified by their lack of commitment to what they are doing? Is it right that the highest rewards go to those who place their own personal acquisitiveness above the wider needs of society?

Maude seems to be saying that the most selfless amongst the most able should reap the lowest rewards, whilst the highest rewards go to the most selfish, even if, in pursuit of their own interests, their actions are directly detrimental to the interests of the majority.

At its heart, it's a statement of an ideological position about the nature of human society, where resources are distributed on the basis of competition, but it doesn’t fit my own view of what attributes ought to attract reward. And it is certainly not an approach based on any evaluation of the contribution people make.

A public service for Wales

Tweet It's easy to attack the salaries of senior public servants – and the public sector seems at times to have a knack of providing easy targets. It's a lot harder to decide how much they really should be paid.

We certainly need competent people at the top of any organisation - but I've had enough experience in both the public and the private sectors to know that high salaries are absolutely no guarantee of competence - in either sector.

Comparisons with the private sector are pretty meaningless in a lot of cases, given the differing nature of the jobs requiring to be done. Whilst there is some movement between the sectors, I struggle to find any real evidence that people are bleeding from the public to the private sector in search of higher salaries. Not that they're not seeking higher salaries; it's more the case that the private sector wouldn't want a lot of them, for reasons to do with relevant experience or culture.

I don't really believe that there would be large numbers of senior public sector jobs left unfilled due to lack of applicants if the level of salaries hadn’t risen so rapidly in recent years. Finding the indians to fill the low-paid jobs has long been a problem, but I'm not aware that there's ever been that much of a problem finding the chiefs.

Yet, for all that, we've seen an almost relentless rise in the salaries of the chiefs in recent years, and the revelations this week about the growth in the number of high paid officials in the Welsh Government are part of that pattern.

One of the reasons given, i.e. so that "senior civil servants working for the Assembly could communicate on equal terms with their counterparts in Whitehall departments" astounded me at first sight. Then I thought about it, and actually, I can quite believe that some of the mandarins in Whitehall would disdain to talk to people on a lower grade than themselves. It quite fits with my perception of a lot that's wrong with the civil service culture in London.

That doesn't mean that increasing the status and salaries of civil servants in Wales is the right response, though! That amounts to an acceptance of the culture and an attempt to fall in with it, instead of challenging it.

Rather than fitting in with outdated status and privilege conscious Whitehall ways of working, Wales would be better off developing a public service structure of our own, encompassing central government, local government, and other public sector bodies such as the health service, and creating a new and different ethos of public service. And, of course, setting the top salaries in line with Welsh needs, rather than slavishly aping London.

Payment for what

Tweet I'm not entirely convinced of the argument for imposing a national maximum wage. It's not an unattractive idea, and there is a certain symmetry about having both a minimum and a maximum; but I'm not sure what it would achieve or whether it's entirely practicable.

I'm more attracted by the idea of tying the maximum wage payable by any organisation to a multiple of the average wage in the same organisation, although there are still a number of problems with that approach as well. The difference, though, is that tying the maximum to the average creates a direct incentive to ensure that the average goes up - in short, the interests of the few at the top are related directly to the interests of the many lower down.

And that, in a sense, is what concerns me about the high level of wages paid to some individuals. It's not the amount as such, but the activities for which they are getting rewarded. Paying high rewards for actions which benefit society as a whole is one thing; paying high rewards for actions which maximise the short term benefit to the few at the direct expense of the long term benefit of the many is little short of rewarding a form of anti-social behaviour.

The problem with the culture of bonuses in our banks is that it has encouraged the 'wrong' type of activity and risk-taking. A small number of people have made fortunes as a result; but most of the rest of us have suffered from the destruction and collapse of the banking system. On balance, I'm more interested in ensuring that the rewards of the people at the top are tied into the long-term economic advantage of society as a whole, and that we have a suitably progressive tax regime on those rewards, than in setting artificial limits on them.