Page last updated at 12:02 GMT, Wednesday, 2 June 2010 13:02 UK

Have prime ministers ever been well paid?

Wallet

By Denise Winterman and Megan Lane
BBC News Magazine

Some 170 civil servants are paid more than the prime minister, it has been revealed. But historically, has this job ever been well paid, and when did it become a benchmark for big salaries?

David Cameron earns less than 172 officials who advise his new government according to new figures, but he should count himself lucky. Past prime ministers have been left heavily in debt and needing to be bailed out by the monarchy.

Historically it has never been the country's best-paid job. At times cabinet ministers have been paid more than their leader, and in the 16th Century, parliamentary wages for some were part-paid in fish.

But crucially, there has always been the potential to cash in on the position, say political historians. In the case of Sir Robert Walpole, who did the job for nearly 21 years from 1721, it was mainly through corrupt means.

"He made a fantastic amount of money in the job," says Paul Seaward, director of the History of Parliament project. "But at that time there was a huge amount of bribery and corruption going on. There was a very ambivalent attitude towards such things back then."

World leaders' pay
UK's David Cameron: £142,500 (entitled to about £193,000)
Irish Republic's Brian Cowen: 228,000 euros (£190,246)
Canada's Stephen Harper: $315,462 (£203,303)
France's Nicolas Sarkozy: 253,600 euros (£210,268)
Germany's Angela Merkel: 261,500 euros (£219,350)
US's Barack Obama: $400,000 (£272,774)

Prime ministers also boosted their wages by securing sinecure posts, which required little work but came with a good salary. These included the post of Lord Warden of the Cinque Ports, given by George III to William Pitt the Younger in 1792. It paid £4,382, according to the House of Commons Information Office (IO) - nearly £500,000 in today's money. It also came with Walmer Castle in Kent as its residence.

But even if there were ways of capitalising on the position some didn't. Pitt was paid a net income of £5,000, along with the extra for being Lord Warden, but left the job after 18 years with huge debts.

"He was naive when it came to money," says Dr Seaward. "Other people had been out to make money from the role, but he wasn't."

A few years before him, Lord North - prime minister from 1770 to 1782 - had to be bailed out by the King while he was still in office, says Professor Kevin Theakston, a specialist in British government and politics at Leeds University. George III loaned him £16,000, some £2m in today's money.

PM'S FULL PAY
1830 - £5,000 (£425,757 today)
1937 - £10,000 (£507, 831 today)
1965 - £14,000 (£202,089)
1972 - £20,000 (£196,732)
1982 - £38,200 (£100,507)
1992 - £53,007 (£81,780)
2002 - £116,436 (£141,2106)
2010 - £150,000
Source: House of Commons, Bank of England inflation calculator

It's only from 1830 that regular records of the prime minister's full salary entitlement are recorded on the IO website. For a century - from 1830 to 1930 - the wage stayed at £5,000. Over those years, this figure saw a drastic real-terms decrease from £42,500 to £24,364, using Bank of England calculations.

Up until the 1830s, the chancellor of the exchequer and other ministers were paid more than the prime minister, and then the same wage until 1937. This remained the case for the attorney general until the 1960s. However, the perks of the job - grace and favour residences in Downing Street and Chequers, staff and drivers - helped make up for the lower wages.

One prime minister who significantly changed the fortunes of his successors was David Lloyd George, who took the job in 1916 and was in the post for nearly six years. He was the first to secure a hefty sum from publishers for his memoirs, which went on to sell extremely well.

"He was the first prime minister to exploit the fact he was a valuable commercial commodity when he left the job," says Prof Theakston. "He wrote his memoirs and also did the lecture circuit. He set the standard for today's politicians."

Winston Churchill is another who made money from writing after he left the post.

Loadsamoney

But it's from the 1980s that the prime minister's salary started to become important to those outside Westminster, as a point of comparison for other salaries. This is due to several factors:

  • MPs' salaries - and therefore the PM's salary - were moved onto the same pay scale as senior civil servants, ending the annual ritual of politicians approving their own salary rises (this also meant an sizable pay hike to bring MPs up to the relevant scale)
  • Money came to equal status in a way it previously had not
  • And Margaret Thatcher made her salary a political point, claiming less than her full entitlement to encourage pay restraint in other sectors

It was soon after the shift in MPs' pay scales that some newspapers started to use phrases such as "earning more than the prime minister", typically in reports about the remuneration of ministerial advisors and NHS bosses.

Until then, salaries - and especially top salaries - were kept a "very dark secret", says Prof Bill Rubinstein, of the University of Aberystwyth, an expert on the history of the wealthy.

Max "Superhod" Quarterman
Plasterer Max Quarterman was famous for earning more than Harold Wilson

"Before World War II and up until the 1980s, there was no sensible research into how rich the rich were."

But in the 1980s, Britain embraced the American method of measuring status - money. "Once it was about where one went to school, how much acreage one might own."

Little wonder this was the decade that spawned the Sunday Times Rich List, first published in April 1989, which sought to answer a question previously left unasked in polite company - who earns the most, and how?

When it came to pay transparency, then Prime Minister Margaret Thatcher led the way. She consistently drew a cabinet minister's salary rather than a prime minister's, to encourage workers to take lower pay rises to save jobs and help fight inflation.

But in the business world, few practiced what she preached. In the late 1980s, with the economy - and the City of London - bursting with renewed vigour, she complained about the incentives awarded to top executives. Often, their bonuses alone dwarfed her official salary of £64,257.

And the rewards offered for hard graft - and sporting talent - became much commented upon, with footballers suddenly earning stratospheric salaries and the rise of tabloid heroes such as Superhod, aka plasterer Max "Superhod" Quarterman. He first hit the headlines in the 1970s when a local newspaper worked out that the hard-working labourer earned more than Harold Wilson, the prime minister of the day. By the 1980s, he was a millionaire - and even more of a tabloid favourite.

CHANCELLOR'S FULL PAY
1830 - £6,198 (£527,769 today)
1937 - £5,000 (£253,915)
1965 - £8,500 (£122,696)
1972 - £20,000 (£127,876)
1982 - £28,950 (£76,169)
1992 - £39,820 (£61,435)
2002 - £69,861 (£84,725)
2010 - £89,740
Sources: House of Commons, Bank of England inflation calculator

There also started to be major anxiety among all politicians "to show restraint and keep a lid on spending", say Prof Theakston, hence Mrs Thatcher going public with her salary cut.

This continued when Labour came to power in 1997. Tony Blair ordered his cabinet not to accept increases recommended by the review body in 1996. When Gordon Brown took over, he refused part of his prime ministerial pay package, as has Mr Cameron.

But while the prime minister earns less than many high flyers, compared with the average UK wage of £26,000, it's not too bad.


Below is a selection of your comments.

Leaving aside what they earn once they leave office, PM's earn a lot more than the headline wage while in it. They get their MP's salary on top of other benefits in kind such as Downing Street, Chequers, travel etc. After you take all that into consideration (and it CANNOT be ignored - because the tax man wouldn't ignore it), nobody on that list earns more than the PM. But that wouldn't make for sensationalist headlines would it?
Dave, Wiltshire

The question is not how much the PM gets but how much should the senior civil servants get for running multi-billion pound budgets! The old adage "pay peanuts, get monkeys" applies to work areas where there are minimal fringe benefits and little/no chance of the "extra-curricula earnings" that many MPs enjoy.
Phil, Anon

We should be looking to pay our ministers and MPs more not less money to try and encourage a better quality of candiate. It's all very well saying it is a public service but not being able to maintain the high standard of living achieved through success in the outside world puts off the successful people we should want to be politicans. The PM earns ver little when compared to the stress and reposnibility of the job. Not helped by vindictive journalists who often earn huge sums themselves try to fan the flames of public outrage.
Dave, London

I think the prestige and power of being Prime Minister means more than the money. Also there is lots of money to be made afterwards - just look at Tony Blair. What is bad though, particularly in these difficult times, is how much some other civil servants are raking in at our expense whilst we have to cut back and pay more tax to pay off our country's debts.
Wendy E, Solihull West Midlands

Leader of the wealthiest nation in the world is not paid enough to take on such a big responsibility. It would be fair for the leader to be earning atleast the same as other civil servants, if not more. If, our MP's were paid fair then we wouldn't see the expenses scandal.
Jagtej, Southall, London

In "The Final Problem", Watson exclaims when Sherlock Holmes tells him that Professor Moriarty earns more than the PM. It would suggest that the PM's pay was viewed as a bench mark even then.
Jack Marking, Manchester

Although the private sector is a law to itself and it is tempting to compare civil servants' pay with equivalent posts in commerce and industry. However, it is hard to justify why anyone in government should earn more than the Prime Minister - who, after all, takes the ultimate responsibility for running the country.
John, Tiverton, Devon

£150,000 puts Cameron into the top 1% of earners in the UK. This is not a poorly paid job. Besides which I would hope that our prime minister has not sought to be prime minister in order to line his pockets, but in order to improve life for ALL Britons.
An observer of the inequalities in Britain, London

Why is it important to pay bankers large salaries "to attract the right calibre of staff" but not public servants? Do we want good people running government departments or not?
Simon, Leeds

The Prime Minister's salary may not actually be all what it seems. As Prime Minister do they have to pay utility bills in No 10 Downing street or pay rent, food, transportation, etc. What about the allowances they receive and the pecks that come with the job. He receives less than many workers yes. but i am sure he also spends less. All in all i do not thing it is too bad
Daniel Asseh Allan, Accra Ghana

This will be very short. Where is the comparison between a footballer kicking a ball about and drawing (not earning) millions a year and a Prime Minister (Con or Lab) running the country for less a year than some of them get in a week. Enough said.
Cedric Hinchliffe, Sheffield

The real cost that continually gets hidden is the pension liability relating to final salary schemes in the public sector. Whilst private sector pensions get increasingly restricted those in the public sector continue to click up value way in excess of what can be funded sensibly from the public finances
GMS, London



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