HOW much is enough?

It's a question we all ask ourselves, especially at Christmas when spending becomes a national obsession. MPs in Westminster have been offered a handy little Christmas present of an 11% increase on their £66,000 pay. That's an extra £7,600 - considerably more than the value of the state pension. Nice work if you can get it.

But MPs don't want to get it. Most say - in public at least - they are horrified at the idea of getting 11% when the rest of the country is getting little more than a 1% increase. David Cameron said the MPs' pay review body should think again, but Sir Ian Kennedy of the Independent Parliamentary Standards Authority (IPSA) said he won't budge.

It's like the Grangemouth stand-off in reverse: you will have this rise. Images of MPs standing next to braziers outside Westminster with banners demanding "Low Pay Now", "We want less and we won't mess".

But the truth is, most MPs in my experience do feel badly paid and resent the fact that, as they put it, politics is becoming a game for rich people like David Cameron and his privately educated Cabinet colleagues. All right for him, they say, he's already a millionaire. MPs claim they can't afford to buy decent houses on their salaries and, of course, they can no longer supplement their incomes by harvesting expenses. But are MPs really so badly paid? By comparison with bankers, they are. By comparison with head teachers and GPs, perhaps. But compared to the vast majority of their constituents? Hardly.

Median full-time annual earnings in Britain are just over £26,000 a year according to the Office for National Statistics' Annual Survey of Hours and Earnings. This means that half the population earns less than £26,000 - many of them a lot less. The largest increase in poverty in Britain has been among the four million working poor.

Earnings for the two-and-a-half million who have no work at all are brutally low. Jobseeker's Allowance is £71.70 a week - and that is only for those over 25 years of age. Yes, they get housing benefit on top of that, and it is possible for some very large families to receive child and other benefits which take them over the new benefits cap of £26,000 a year. But there are not many - around 1,000 families in Scotland have had their benefits capped.

So, make no mistake, we live in a low-wage economy. The colossal wealth of the top 1%, whose share of income has doubled since 1970, masks a land in which most people are just scraping by. The trouble is that MPs in Westminster tend to spend their lives meeting businessmen, senior civil servants, senior managers and PR consultants of one kind or another, all of whom are earning a lot more than they do.

A permanent secretary at the Department of Health gets around £200,000 a year; a regional inspector of police around £190,000. The average GP in England earns well over £100,000 a year, according to the NHS information centre. Few MPs believe they should be paid six figures, but they argue that, if we want parliamentarians of high calibre able to look these people in the eye and hold them to account, then they need more than they currently receive.

Interestingly, MSPs - who earn less than MPs - seem much less discontented. I don't believe I have ever heard a member of the Scottish Parliament say they are not paid enough. This may be because MSPs tend to be closer to their constituents, and spend less time in the company of the rich.

The Presiding Officer, Tricia Marwick, has called for Holyrood to be "decoupled" from Westminster pay scales altogether and I am sure there is majority support among MSPs.

The reality is that by most standards MPs are well paid: £66,000 places them well into the top 5% of full-time employees. Now, there is a rider here: thanks to tax arrangements put in place by politicians, a lot of wealthy people don't actually earn full-time salaries. They pay themselves in other forms, through dividends and such like and have ways on minimising tax. Nevertheless, if MPs are to represent the vast majority of the population who do pay their taxes, and do work for a living in a normal job, then they are already living at a standard unattainable by 95 voters out of every 100.

Indeed, there is an argument MPs should not earn more than basic-rate tax payers, or £42,000. After all, it is politicians who set tax bands and they have deemed that people earning over £42,000 are, effectively, well off. Why should they then expect to be paid 50% more than this figure? A wage of £42,000 would put them in the top 25% of earners. If we want our elected representatives to understand their constituents' lives, this would appear to be a sensible figure.

So, the more you look at it, the harder it becomes to justify an increase. MPs also have generous expenses and gold-plated final salary pensions, which may be one reason the private pensions scandals have been so neglected by Westminster. If they had to pay for their own pensions, you can be damn sure there would never be another endowment rip-off. And if MPs all earned £42,000, they would never allow another housing bubble to happen.

To be fair, IPSA has proposed reducing marginally the level of pensions MPs enjoy. IPSA claims, overall, the new package including the 11% is cost neutral. But this also betrays an astonishing detachment from the real world. Those workers in Grangemouth didn't get any increase in pay when they lost their final salary pensions, and nor have all those public sector workers.

The IPSA proposal offers an insight into the real problem, which is the spiralling of pay at the top of society. IPSA is like one of those remuneration committees in universities or local authorities that compares salaries with the private sector, and starts awarding six-figure sums to council bureaucrats. Reward inflation has become institutionalised.

Remuneration committees invariably argue that they are trying to attract the best people. If you pay peanuts, you get monkeys, they say. But the banking crash exposed that argument as bogus and the BBC has also demonstrated that paying people vast amounts of money only makes them want more money.

Would we get better MPs on £75,000? Of course not. Only the very worst politicians are motivated by money. The best are driven by moral purpose, not material reward. And while that doesn't mean they should starve, it requires of them a certain discipline since it is ordinary people who are paying their salaries.

The more serious problem is how to arrest the decline of working-class MPs in Westminster, down from 16% in 1979 to just 4% today, according to the Policy Exchange. That has little to do with pay and a lot to do with the culture of British politics and the decline of organisations like the trade unions that articulated the interests of the less well-off.

Being an MP is an immense privilege. They are held in high esteem by the public - except, of course, when they are found to be fiddling their expenses on an industrial scale, as in 2009. That should serve as a moral lesson: Throwing money at MPs doesn't deliver better parliamentarians, just better property developers.