Out of Office, Out of Work: Are Ex-MPs Unemployable?

Last Updated May 5, 2010 6:22 AM EDT


Almost 150 British MPs are retiring from Parliament at the 2010 General Eelection and many more will leave involuntarily.

But how many could swap a career in politics for a future in business? Not many, nowadays.

In past decades, a lord on the board or an MP as a director was de rigueur in many companies. True, the politician was more likely to be Conservative than Labour, but a a non-executive sinecure was a useful supplement to a backbenchers' salary or a billet for Opposition spokesmen until their party returned to office. Directorships provided pensions for former politicians.

Now it's rare for MPs to share their time between the Commons and commerce. Ken Clarke's stint as deputy chairman of cigarette-makers BAT before becoming the Conservatives' business spokesman and Patricia Hewitt's non-executive directorship of BT after she was Labour's health secretary are rare exceptions. The record bodes badly for the unprecedented number of MPs leaving Westminster in 2010.

When politicians were in demand, it was because constituency MPs had connections with local companies or ex-ministers might provide an understanding of how politics works -- even open doors at specific departments.

But both politics and business have changed. MPs are much busier now and have less time for second jobs outside parliament. And they are increasingly career politicians with no previous experience or connection with commerce. The expenses and cash for influence scandals have made certain MPs a liability but also means MPs in general no longer enhance a board.

Companies, meanwhile, have become apolitical to avoid offending any stakeholders. Now that boards need shareholder approval to make political donations, few do.

Business is increasingly international, too, reducing local politicians' value. Corporate governance requires non-execs to bring more to the boardroom than a title.

The lack of Tory MPs on boards during their years in Opposition shows how the traditional tie has been broken. It's unlikely a swathe of outgoing Labour politicians will be invited into boardrooms, despite their party becoming so business-friendly.

MPs look like losers if their party has been voted out of office and those from the government party will be judged by their administration's track record. And MPs from the losing party carry little influence with new ministers.

There is a cultural difference between commerce and the Commons too, nowadays. It is especially hard for someone who has sat at the centre of the Cabinet table or run a department to assume a subservient non-exec corporate role. That may explain why Tony Blair and John Major can act as advisers to companies but do not join their boards.

The host of businessmen who accepted peerages to join the Labour government -- Paul Myners, Digby Jones, Mervyn Davies, Alan Sugar and Andrew Adonis, for instance -- may easily move back into boardrooms if Labour loses, but most MPs will be lucky to receive a call from headhunters.

(Photo: didbygraham, cc2.0)