Last week I described waning public sympathy for all the benefits members of parliament receive during and after their time in office. From help with housing, staffing and even eating, to a still very generous career average pension scheme upon retirement, it is fair to say the state has MPs’ backs. At a time of immense political turmoil, it is easy to see why these generous benefits are unpopular among voters.
Why on Earth, then, would anyone step forward to make the case for another generous benefit being added to that list? Last week I described how running for office – and staying in it – can have a parlous effect on MPs’ personal finances. That much is well known already. But in the current climate, you will not hear a single MP complain about it. And understandably so.
I wonder whether that is one reason why MPs find it difficult to manage their finances. Because that bit of their lives is hush-hush, there is simply no incentive for them to do anything about it. It would be fascinating to see how MPs’ competence with money compares with the confidence of the general population – a confidence that is already very low. Last year a study from University College London suggested one in three adults in England and Northern Ireland could not work out the correct change from a shopping trip. It would be unsurprising if MPs were not far behind. They are only human after all.
From my own private conversations with MPs, I know personal finance management can come last on their to-do list. One MP told me he had no idea what his incomings and outgoings were, although he previously had a successful career managing money in emerging markets.
Whether MPs have an above or below average understanding of money, I do believe there is a case for helping them get their finances in order. And that should be done via some form of regulated financial advice, possibly subsidised. There are three reasons for this.
Let us start with inclusion. Politics has never been an inclusive affair. MPs are still seen as white, male and (at the very least) middle-class. Granted, they are not all as posh as Mr Rees-Mogg, but the image remains. It is no surprise to hear people on low-to-medium incomes are put off from entering politics because of money. Were they to have some means of obtaining financial advice upon entering parliament, that might do just a bit more to make the village more inclusive. If certain richer MPs end up with better finances in the process, then so be it.
Power of persuasion
Secondly, it strikes me MPs remain very unaware of the value of financial advice. Mentions of the profession on either colour of parliamentary bench are few and far between. When advice is referenced, it is rarely from what seems an informed perspective, (even when the news is good). I wonder how differently Pension Wise or the new financial guidance body, the Money and Pensions Service, would have turned out if the majority of MPs legislating on it had seen the value of an adviser first hand. Maybe they would not exist at all. Perhaps they would have heeded Labour MP Frank Field’s calls for a state-funded system of regulated advice in 2015.
Increasing our MPs’ real-world understanding of money, starting with their own cash, can only be a good thing. In our current political detritus, where good information is at a premium, MPs would be served well by proper information about investments, financial planning, and the tax code they are supposed to know so well.
All of this spills over into the other crucial areas of public policy legislators act on. It would not be a catch-all solution, but it might go some way to ensuring MPs are no longer jacks of all trades and masters of none.