Markets and Morality

The BBC is not the Civil Service – and politicians shouldn’t set its pay

Matt Hancock is Minister for Digital, Culture, Media and Sport. It is a non-job, but one which offers fine opportunities for pontificating about everything from football to robots to museums. He recently popped up to add fuel to the BBC’s row about pay. This was originally about whether women were unfairly treated at the Beeb; now this is widened to say that no BBC employee should earn more than the Prime Minister. John Humphrys’ salary – presumably ignoring contractual obligations – should be slashed by three-quarters.

The BBC is a nationalised entity. In many people’s view it should not be. But as a part of the public sector, Mr Hancock is saying, it should be subject to similar restraints to those faced by the civil service and local authorities.

People may have forgotten that unease about pay in the public sector led the coalition government to set up an enquiry under Will Hutton, a long-standing critic of high salaries. It was expected to lead to a cap on the ratio of top pay to low pay; a maximum for public sector chief executives of 20 times the pay of the lowest-paid was touted, and the PM’s salary was seen as the sound barrier through which nobody was permitted to jet.

However, Hutton’s report turned out to be an unexpectedly sensible recognition of the dangers of populist thinking. He pointed out that there would be many indirect consequences of rigid limits.  More fundamentally, Hutton argued that the country needed to avoid making the public sector an unattractive place for those with talent and drive.

If strict regulations were avoided by Hutton’s conclusions, the climate of opinion has made it very difficult to increase public sector pay across the board, and certainly at the top end. This is a good thing in some ways, for instance in helping to rein in the fiscal deficit. However there remains a danger that public sector jobs – many of which are highly challenging, and require candidates with vision and the ability to push change through against powerful unions and intellectually lazy politicians – may become the preserve of the less ambitious and less competent.

Or, worse, the domain of fanatics and professional hair-shirt wearers. Taking the PM’s salary as a marker is certainly not sensible. It has not gone up since the privately wealthy David Cameron (who can now make much more money as a speaker and author than he ever did as a Parliamentarian) refused an increase. It will be politically impossible to raise this in the foreseeable future. Given inflation, this will mean that top public sector pay will fall in real terms year on year.

One rarely considered problem with pay ceilings is their impact on differentials below the ceiling. I am not alone, surely, in thinking that John Humphrys’ experience, range of competence and popularity make him objectively more valuable to the BBC – or, importantly, other broadcasters – than Carrie Gracie, who most people will not have heard of until this latest row. Mr Humphrys is continually employed, usually at unsocial hours. Ms Gracie pops up only when China is in the news. If £150k is the most that can be paid to top broadcasters, the implication is that the pay of people like Ms Gracie would also have to fall to maintain some sort of differential – as would that of people reporting on Uzbekistan, or on local radio stations, or hosting cookery programmes.

Many of those losing out in such pay compression would be women, a bizarre consequence which would do nothing much for the aggregate gender pay gap for the UK economy. It is on a par with the ill-advised bullying of universities, which has recently seen the best-paid vice-chancellor – a woman – forced out and VC pay now having to be at the whim of the superannuated politician who will be running the Office for Students. Universities are not in the public sector, but this does not seem to bother our rulers. Sure, much of their income comes indirectly from the state – but less so than most defence contractors or outsourcers such as Capita and the late unlamented Carillion, where top executives can earn more than a Davos-full of Prime Ministers.

BBC presenters and creatives are not civil servants or local authority employees with permanent contracts, early retirement and generous pensions. Many have suffered from financial insecurity while building their careers, often in dangerous places or in difficult circumstances. Their main income can disappear as programmes are axed, and they can drop out of favour – Adrian Chiles, anyone? – quite quickly. They should be on tightly-monitored, relatively short contracts. But the idea that politicians should determine the terms of these contracts is just wrong and it is a pity Conservative ministers can’t say this clearly and unequivocally. If they don’t like it, they should perhaps have the courage to privatise the BBC and let an unconstrained market decide these things. And scrap Mr Hancock’s job at the same time.


This article was first published on CapX.

3 thoughts on “The BBC is not the Civil Service – and politicians shouldn’t set its pay”

  1. Posted 25/01/2018 at 21:13 | Permalink

    How about making the BBC accountable to the people who pay for it?
    To achieve that the Board of Trustees would set the universal fee level, make the top appointments ( as now ), and decide the scope. Do you want breakfast television? Do you want a 24 hours news channel? Do you want top talent earning top dollar?
    Then let the candidates to be Trustees set out their platforms, and let the licence payer elect them.
    For now the Board is selected by and accountable to the DCMS so it is absolutely the government’s business.
    A little oddity: the BBC will say it is accountable, and that if you don’t like it you can make it an issue when choosing your MP. But if you’re a taxpaying EU national living lawfully in the UK you don’t get to choose your MP. An example of no representation for your taxation if ever there was one. Does that make the BBC xenophobic against EU nationals by their silence on this core lack of accountability? I think it does. Consider the absence of evidence on the BBC that other EU countries have functioning universal health systems. Pure bias in my view, but I’ve digressed

  2. Posted 26/01/2018 at 14:22 | Permalink

    One consequence of being slave to a myopic dogma is the 50% visual impairment. The issue isn’t the BBC which you choose to mischaracterise as private or public when convenient, or Matt Hancock having a view; it is about the fair treatment of women in the workplace, a subject seemingly outside your narrow field of vision. That this is taking place very publicly, engaging a broad debate, disclosure and being actively responded to by an accountable public institution, might be seen as a step forward for us all. It might even prompt you to question the fairness of Carillion’s director remuneration in your world view. You might be able to see and appreciate that perspective if you made yourself aware that Adam Smith wrote two significant works, not just one.

  3. Posted 16/12/2022 at 08:27 | Permalink

    Why is Naga Munchetty paid over £300k for sitting most of her time on her bottom in a warm studio reading an auto cue? The money the BBC are in my opinion are wasting through paying employees ridiculous sums should be paid to me deserving people such as nurses. I am sure there are plenty of other people who could undertake Munchetty, the Welsh woman on the One Show and other presenters not just females jobs for 1/3 of the cost! Come on BBC we need some action!!

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