Monday, 17 May 2010

Millionaires in the cabinet?

As David Cameron announced his new cabinet this week I picked up a 'tweet' observing that about three quarters of them were millionaires.

I sent the message on, as you do, and two things immediately became clear:

(1) No-one had really done the research, and I just couldn't find a comprehensive list of how many members of our new Tory government really were picked from among the super-rich, and

(2) The observation proved extremely controversial, with many expressing shock and horror at how unrepresentative cabinet members' wealth made them - and a couple saying exactly the opposite, making the point that being a millionaire is a measure of success, and we should celebrate the appointment of so many successful politicians in our government.

Personally, I couldn't agree with this final point less: being rich isn't the same as being successful - countless studies have shown that, actually, well-being and health are far more likely to be the measures we use when we measure our own success and are more accurate measures of everyone else's too.

Being wealthy does make people happy, and does buy access to the best health-care - but the law of diminishing returns ensures that, once you've reached a fairly low threshold of wealth, and are able to meet most of your real needs, this is less true for every extra pound in your pocket.

The argument that having a cabinet stacked with millionaires makes it pretty unrepresentative of the population in general is, to my mind at least, far more true.

Of course you could argues that it just doesn't make any difference to the way a cabinet member makes decisions, but when it comes to making cuts in public services surely the personal perception of how much difference a few quid here or there makes to someone is bound to affect the way decision-makers think.

Here's a simple example: one of the first things the new cabinet did was cut its own pay by 5% - roughly £7,000 a year each. That sounds a lot - although it won't make much imact of the deficit, it seems like a grand symbolic gesture that the cuts will come from the top first.

But an annual pay cut of £7,000 for a millionaire is the equivalent of taking an annula pay cut of about £7 a year - or 14p a week - for someone living in a rented flat but with savings of about £1,000: not such a grand gesture after all!

Anyway, how true is it anyway?

Well, there are 23 members of the cabinet. I've listed them below, with a simple yes or no according to whether they appear to be millionaires or not. My sources are varied, but are based on various articles (mostly wikipedia) and lists published over the last two years available online. If any reader has better information, do please share it! I don't promise that my figures are absolutely correct, so I'll publish any corrections or different interpretations I receive.

But my cursory research shows that, of the 23, 16 of them are indeed millionaires.

I find that shocking - I guess whether you do to comes down to your take on the questions briefly discussed above.

So here's my list:

Prime Minister David Cameron YES
 
Deputy Prime Minister Nick Clegg YES
 
Foreign Secretary William Hague YES
 
Chancellor George Osborne YES
 
Lord Chancellor Kenneth Clarke NO
 
Home Secretary Theresa May YES
 
Defence Secretary Liam Fox YES
 
Business Secretary Vince Cable NO
 
Secretary of State for Work and Pensions Iain Duncan Smith NO
 
Secretary of State for Energy and Climate Change Chris Huhne YES
 
Secretary of State for Health Andrew Lansley NO
 
Secretary of State for Education Michael Gove YES
 
Secretary of State for Communities and Local Government Eric Pickles NO
 
Secretary of State for Transport Philip Hammond YES
 
Secretary of State for Environment, Food and Rural Affairs Caroline Spelman YES
 
Secretary of State for International Development Andrew Mitchell YES
 
Secretary of State for Northern Ireland Owen Paterson YES
 
Secretary of State for Scotland Danny Alexander NO
 
Secretary of State for Wales Cheryl Gillan YES
 
Secretary of State for Culture, Olympics, Media and Sport Jeremy Hunt YES

Chief Secretary to the Treasury David Laws YES
 
Leader of the House of Lords Lord Strathclyde YES

Minister of State Baroness Warsi NO

5 comments:

  1. No wonder they wanted to bring in a change in inheritance tax.

    How did these people make their millions?

    ReplyDelete
  2. Ben,
    Good post and I enjoyed discussing it on twitter with you. I've clarified the arguments I made on my blog:
    http://blog.andrewhancox.com/2010/05/millionaires-in-the-cabinet/

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  3. Peter - it varies, but mostly through inheritance and property


    Andrew - Thanks for kind words.

    But you can't have it both ways!

    Either wealth is easy to come by via property ownership, in which case it doesn't tell us anything about the success of millionaires (at least in BN3!) - or it isn't, in which case it depends on all sorts of factors, including access to credit, freedom to speculate, confidence about the future, having inherited (or had the spare cash to save for) a deposit for a house, and so on.

    These factors are a bit mixed for every property-owner, and certainly don't correlate with the qualities needed to make a good cabinet minister.

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  4. I'm not saying wealth is easy to come by, I'm saying that if you have a room full of moderately successful 50 year old men of British ethnicity, there will be more millionaires present than in the general population.
    Also bear in mind that in order to be an MP you need to be an effective organiser, be able to manage people, be good at balancing budgets etc - all skills that would tend to lead to financial success.
    Talking about money in this instance is unhelpful and clouds the real issue; there are important ways our government is unrepresentative, this isn't one of them.

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  5. Any chance of Radford Kirby making the cabinet- he should fit right in

    ReplyDelete