There is an easy way to make political pay seem fair to ordinary people

The predictable fall-out from the decision of Scottish Government Ministers to accept £20,000 pay rises continues, today linked to the various industrial disputes at risk of breaking out in Scotland. This is a perpetually-recurring issue which both dogs political administrations relentlessly and yet is surprisingly easy to resolve.

The problem generally occurs when there is some period of downwards pressure on wages for large sections of the public yet the processes for political pay-setting operate as if in a different economy and set significant pay rises for politicians. Either the politician accepts and this causes sharp ill will, or the politician declines as an act of solidarity.

This doesn't really help either because it then starts to build up a growing and at least partially justified resentment among the political classes. Instead of receiving pay settlements which are above the wider economic trend, now they are freezing salaries below it. In time this becomes a more glaring problem and so the pressure to reverse rises.

And then at this point there is a politically difficult outcome, because if there is to be a catch-up then the year-on-year pay rises becomes very high and it is this that becomes the comparator for everyone else – and it sounds like £20,000 pay boost in one year. Absolutely no normal employee in the Scottish economy gets a £20,000 one-year pay rise for doing the same job.

The means for uprating salaries is a major part of the problem. This is nominally set by an 'independent panel'. The problem is that there is no panel that you can assemble which does not bring its own ideological stance. If you make it up of English Premiership footballers you are going to get a different outcome than if you make it up of people solely reliant on benefit payments.

Suffice to say that senior figures don't appoint people on benefits to set their salaries. Rather this becomes part of the merry-go-round of reward-setting in the public sector where the very top end (senior civil servants, senior staff in institutions, governors and quango members) or others with the same expectation of personal reward set each others pay – and just as much, set expectations of what pay should be.

Quite remarkably, some commentators believe that the problem is that MSPs don't get paid enough, that they should be paid like chief executives of corporations. This is purely ideological; this is the attempt to separate politicians from being in any sense 'like their constituents' and turn them into fully paid-up members of the national financial elite.

From there senior politicians end up in the same tax avoidance planning meetings with the same advisers as the leaders of big business. We have already seen the former First Minister Nicola Sturgeon engaging in tax avoidance practices in her post-Holyrood career.

This is all corrosive of public trust. That this particular move is so clearly being taken to boost the final-salary pensions of a group of government ministers who are about to resign makes this even more cynical.

There is a simple way to resolve this problem. Instead of having panels of wealthy people appointed to a pay recommendation panel (largely because of their own expectations of what reasonable pay is), politicians should have their pay index-linked to a public indicator. In that way the pay they receive isn't a reflection of what an economic elite thinks they deserve but a reflection of the outcomes of their own policies.

The obvious index would be median salary (the level of pay of someone who is exactly in the middle of the spectrum of pay levels). But there is an argument to link the index instead to median income. Using salary excludes the life experience of the many people who are not in employment and so totally reliant on politicians for their level of income. Including the income of people on benefits or who are retired creates a much more accurate picture of how the average citizen of Scotland lives.

It is not practical to ask a politician to live on a median income. This proves hard enough for many people on a median income and being a politician does incur more costs than would be borne by an average citizen.

But setting an MSP salary as a multiple of median income links the personal finances of politicians to those of a typical citizen. Suddenly the interests of elected politicians are no longer linked to how happy the economic elite are with them but to how ordinary people live. This is surely a more valuable driver of sentiment in politics.

Linking MSP pay to median income doesn't only make the pay of politicians feel fairer to everyone else, it makes them see the plight of average citizens as being in their own personal financial interests. Are these not the kind of incentives we want to set our politicians in a democracy?