Former Home Office Minister Norman Baker talks to ME & MY MONEY

Former MP Norman Baker says he earned every penny of the £95,000 salary he was paid as Minister of State at the Home Office, because he had to ‘put up’ with Theresa May. 

In a provocative interview, Baker, 64, also told DONNA FERGUSON that had he been interested in money, he would have sat as a Conservative MP, not a Liberal Democrat. He believes it is ‘unfortunate’ that many of the MPs who rule Britain, including the Prime Minister, have never had to struggle or live on a tight budget. 

His book And What Do You Do? What The Royal Family Don’t Want You To Know examines the finances of the Royal Family and is out in paperback. 

‘Unfortunate’: Norman Baker says most MPs, including the PM, have never had to live on a tight budget

What did your parents teach you about money? 

My father died when I was eight. So he didn’t teach me much at all. My mother taught me not to spend more than you earn. She was a nurse at a hospital before giving up work when she got married. 

Our family wasn’t well off, particularly after the death of Dad who had been a sales rep. My mother went back to work and we lived on a tight, basic budget. We always had enough money for food, but I remember having to go to school with clothes that were patched rather than new – and getting picked on by other boys for that. We never went on holiday except to stay with relatives. 

My upbringing means I’ve always been, I think, responsible with money, and aware of how much I’ve got in the bank versus how much I’m spending. I wouldn’t say I’m mean with money, but I am careful. 

How did that influence your politics? 

Coming from a poor background, I recognised and valued what the State provided me with: a brilliant education from a grammar school and free healthcare from the NHS. 

The State was there for me as a safety net. I became conscious of that and feel immensely grateful. I think perhaps now, we have gone backwards and children in my situation don’t have the same chances. 

Have you ever struggled to make ends meet? 

Yes. After university I went into the music business and ended up as a regional director for a big chain of record shops. But then, in 1990, I became a Liberal Democrat candidate for Parliament and the local council. If you do that, you have to devote a huge amount of time to getting elected. 

I sacrificed my job and ended up scrambling around, teaching English as a foreign language and working in a petrol station to make ends meet. 

For seven years, I lived on not very much at all – probably about £15,000 a year – in order to make sure I had time for campaigning. 

If I hadn’t got elected as an MP in 1997, I would have had to give up because I couldn’t have afforded to carry on in that way. I hadn’t any money to do anything. It was a valuable experience for me as an MP. You see some people in Parliament who have never had to struggle or live on a budget. Our Prime Minister is probably one of them. 

He has always been able to buy what he wants without thinking about it. That’s not been my situation and that’s not the situation of many people. 

Most people have to think about what they are spending, but some of the people who rule us don’t have that experience. I think that’s unfortunate.

Have you ever been paid silly money? 

No. At most I’ve been paid about £1,000 for an after-dinner speech, nothing to write home about. I don’t care about earning silly money. If I was interested in money, I wouldn’t have sat as Liberal Democrat – I’d have sat as a Tory. It’s more important for me to have a conscience than to sell my soul. 

What was the best year of your financial life? 

It was 2013 and 2014 when, in the Coalition Government, I was Minister of State at the Home Office. I earned between £90,000 and £95,000 a year. I had to put up with Theresa May as the Secretary of State, so the job was well worth that salary – I had to earn my money for that. 

What is the most expensive thing you bought for fun? 

It was a 1946 Wurlitzer jukebox which plays 78 rpm records. I bought it for £10,000 with some money I inherited when my mother died in 2004. It’s probably gone up in value but I don’t really care. The sound of the records is lovely.

What is your biggest money mistake? 

Spending a lot on legal fees, unnecessarily, when I got divorced. We had to split our assets including our home. Now I’m renting because I cannot afford to buy a house in my home town of Lewes in East Sussex. I’m hoping house prices will fall so I can take a lump sum from my pension and buy a small place, which I can then pass on to my daughter when I die.

Sound investment: He bought a Wurlitzer for £10,000

Sound investment: He bought a Wurlitzer for £10,000

The best money decision you have made? 

Grtting on the property ladder in 1981. I bought a one-bedroom flat in Islington, North London, for £19,500, sold it for £47,500 three years later and moved up the ladder. I’m not terribly well off today, but I am in a secure financial position and it’s all thanks to buying that Islington property. It’s not work that’s got me here. It’s property.

Do you save into a pension? 

No. I have a final salary pension as a former MP which is generous, but it will have to be split due to my divorce.

I currently work part-time for the Campaign For Better Transport, and it contributes to a pension on my behalf. I suppose it is important to save for a pension. 

But I have to say that I have always found pensions deeply dull and boring. I glaze over if I even hear the word pension. I don’t really understand how they work. 

Do you invest directly in the stock market? 

No, I have never had the money or the inclination. I do own one – yes just one – share, and that’s in British American Tobacco. An anti-smoking group gave it to me some years ago so I could go along to the annual general meeting and make a noise and complain about its policies – which I duly did. It was a hostile environment.

If you were Chancellor what would you do? 

I would close all the tax loopholes that very rich people use to avoid paying tax and use the money to increase spending on foreign aid. I think it’s pretty disgusting that the country has cut back on funding for things like education and basic water supply for people in developing countries. 

It’s really unethical that has happened, while in overseas British territories, money is being shovelled away by rich people who don’t pay proper amounts of tax. 

Let’s get people who are very rich and not paying their taxes to help those in need. 

Do you donate money to charity? 

I do sometimes, but not regularly. I prefer to donate according to the issues that are topmost in my mind. I will, however, give charities my time and raise money for them. For example, I’ll do whatever I can to help Free Tibet. I’ve been involved with that campaign for 30 years. Tibetan culture is wonderful – it’s something we ought to celebrate and it’s being extinguished by the Chinese government. 

What is your number one financial priority? 

To somehow afford to buy a house of my own in Lewes. It’s a British thing, I suppose, to want to own your own house.