Miliband matches Clegg's pledge not to accept a pay rise. Will Cameron?

The Labour leader's promise not to accept the £7,604 pay rise to £74,000 leaves the PM as the odd one out.

After IPSA recommended that MPs' pay be increased by £7,604 to £74,000 in 2015, Ed Miliband has joined Nick Clegg in pledging not to accept the rise. 

I don't think MPs should be getting a 10% pay rise when nurses and teachers are facing either pay freezes or very low increases and people in the private sector are facing similar circumstances. I'm very clear - I don't think this package of proposals should go ahead in the current economic circumstances.

If this was to go ahead I wouldn't be accepting this pay rise but I don't think it is going to go ahead in the current circumstances because I think that when Ipsa consult the public, the public will be pretty clear that while the difficulties we have in the economy persist we can't have MPs getting a 10% pay rise.

At the first of his regular press conferences earlier this month, Clegg said: "Speaking for myself I would certainly seek to do whatever I can to make sure that either this decision is not taken in the first place - but that's out of my hands - but, secondly, if were to be taken, not to take that pay increase."

This leaves David Cameron as the only of the three main leaders not to have promised to decline the increase. Downing Street made it clear this morning that Cameron opposes the rise, but stopped short of saying that he would not accept it. The likelihood, however, that he will be forced to revise his position, possibly as early as today. As I noted earlier, the public, unsurprisingly, oppose the increase by 68 per cent to 17 per cent, with 50 per cent believing that MPs are already paid too much (their current salary of £66,396 puts them comfortably in the top 5 per cent of earners. ) 

Should MPs receive the rise, and only in a change in the law will prevent them from doing so, it will also become even harder for Cameron to oppose Miliband's call for new limits on MPs' outside earnings and a ban on them accepting paid directorships and consultancies. As the Labour leader knows, Cameron  is vulnerable to the charge that he is defending the interests of his own side. In the 2012-13 parliamentary session, Tory MPs declared more than £4.3m in outside earnings, compared to £2.4m by their Labour counterparts, £1.37m of which was accounted for by Gordon Brown, who did not personally benefit from any of the money. 

Nick Clegg, David Cameron and Ed Miliband during a reception to mark the inaugural Queen Elizabeth Prize for Engineering, at Buckingham Palace on June 25, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.