MPs are paid to fear inflation and not care about unemployment

Want to know what an MP cares about? Look at their pay packet.

FullFact.org has put together highlighted a chart made by IPSA showing MPs pay in real terms over the last hundred years. Since 1911, when it was introduced at a rate of £400 per year, the pay of elected representatives has fluctuated between six times, and one and a half times, the average wage in the UK. It currently sits a little over two-and-a-half times higher:

As a reminder of what we've historically considered a fair wage for MPs, it's useful, especially in the context of the continued debate over IPSA's decision to award a pay rise. We can see, for instance, that the vast majority of MPs, elected in 2001 or later, are earning less than they every have before in real terms. But for the 100 or so oldest MPs, in office since before 1992, they've had the experience of being much poorer.

But there's something else which is worth noticing, which is how badly hit MPs were by the inflation of the 1960s and 1970s. Between 1962 and 1976, MPs pay fell from 4.5 times the average wage to double it; and that despite two pay rises in the interim period.

Everyone earning a salary is hit by inflation to some extent. But MPs are in the category of workers who are hit hardest. They don't have the annual pay rises typical in many industries; they have no ability to negotiate individually in response to changed circumstances; they can't leave for a better paid job without completely switching industry; and so on. And that's even before you take into account the unique peculiarities of their situation: asking for a pay rise due to inflation is a bad idea if the inflation is seen as your fault to start with.

So MPs, as a class, actually have more to fear from inflation than most other people. (To a certain extent, offloading the job of setting their pay to IPSA has made things slightly easier, but as the latest fuss shows, a pay rise is still a PR disaster.) And that explains a lot about the hawkish attitude of most MPs.

Conversely, MPs are also the one group who have no (direct, financial) reason to fear recession or high unemployment. Their pay is set free of market forces, and, while they might not see much of a rise in lean times, they can be pretty certain it won't be cut in nominal terms. That's a comfort few employees have. And they are absolutely certain that, no matter how bad the business environment, they won't be let go because their organisation can't afford to keep them on.

All of which means that the economics of being an MP are directly aligned with a tendency to over-value inflation, and undervalue growth, in setting priorities for the country. In so far as the new Governor of the Bank of England, Mark Carney can fight that consensus, he should; but IPSA could have a role to play as well. In deciding what to do with MPs pay, they could look at a wider economic index of how the country is doing. That way, MPs would know that getting their dinner relies on everyone else getting theirs.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Who "speaks for England" - and for that matter, what is "England"?

The Hollywood producer Sam Gold­wyn once demanded, “Let’s have some new clichés.” The Daily Mail, however, is always happiest with the old ones.

The Hollywood producer Sam Gold­wyn once demanded, “Let’s have some new clichés.” The Daily Mail, however, is always happiest with the old ones. It trotted out Leo Amery’s House of Commons call from September 1939, “Speak for England”, for the headline on a deranged leader that filled a picture-free front page on David Cameron’s “deal” to keep Britain in the EU.

Demands that somebody or other speak for England have followed thick and fast ever since Amery addressed his call to Labour’s Arthur Greenwood when Neville Chamberlain was still dithering over war with Hitler. Tory MPs shouted, “Speak for England!” when Michael Foot, the then Labour leader, rose in the Commons in 1982 after Argentina’s invasion of the Falklands. The Mail columnist Andrew Alexander called on Clare Short to “speak for England” over the Iraq War in 2003. “Can [Ed] Miliband speak for England?” Anthony Barnett asked in this very magazine in 2013. (Judging by the 2015 election result, one would say not.) “I speak for England,” claimed John Redwood last year. “Labour must speak for England,” countered Frank Field soon afterwards.

The Mail’s invocation of Amery was misconceived for two reasons. First, Amery wanted us to wage war in Europe in support of Hitler’s victims in Poland and elsewhere and in alliance with France, not to isolate ourselves from the continent. Second, “speak for England” in recent years has been used in support of “English votes for English laws”, following proposals for further devolution to Scotland. As the Mail was among the most adamant in demanding that Scots keep their noses out of English affairs, it’s a bit rich of it now to state “of course, by ‘England’. . . we mean the whole of the United Kingdom”.

 

EU immemorial

The Mail is also wrong in arguing that “we are at a crossroads in our island history”. The suggestion that the choice is between “submitting to a statist, unelected bureaucracy in Brussels” and reclaiming our ancient island liberties is pure nonsense. In the long run, withdrawing from the EU will make little difference. Levels of immigration will be determined, as they always have been, mainly by employers’ demands for labour and the difficulties of policing the borders of a country that has become a leading international transport hub. The terms on which we continue to trade with EU members will be determined largely by unelected bureaucrats in Brussels after discussions with unelected bureaucrats in London.

The British are bored by the EU and the interminable Westminster arguments. If voters support Brexit, it will probably be because they then expect to hear no more on the subject. They will be sadly mistaken. The withdrawal negotiations will take years, with the Farages and Duncan Smiths still foaming at the mouth, Cameron still claiming phoney victories and Angela Merkel, François Hollande and the dreaded Jean-Claude Juncker playing a bigger part in our lives than ever.

 

An empty cabinet

Meanwhile, one wonders what has become of Jeremy Corbyn or, indeed, the rest of the shadow cabinet. The Mail’s “speak for England” leader excoriated him for not mentioning “the Number One subject of the hour” at PM’s Questions but instead asking about a shortage of therapeutic radiographers in the NHS. In fact, the NHS’s problems – almost wholly caused by Tory “reforms” and spending cuts – would concern more people than does our future in the EU. But radiographers are hardly headline news, and Corbyn and his team seem unable to get anything into the nation’s “any other business”, never mind to the top of its agenda.

Public services deteriorate by the day, George Osborne’s fiscal plans look increasingly awry, and attempts to wring tax receipts out of big corporations appear hopelessly inadequate. Yet since Christmas I have hardly seen a shadow minister featured in the papers or spotted one on TV, except to say something about Trident, another subject that most voters don’t care about.

 

Incurable prose

According to the Guardian’s admirable but (let’s be honest) rather tedious series celeb­rating the NHS, a US health-care firm has advised investors that “privatisation of the UK marketplace . . . should create organic and de novo opportunities”. I have no idea what this means, though it sounds ominous. But I am quite certain I don’t want my local hospital or GP practice run by people who write prose like that.

 

Fashionable Foxes

My home-town football team, Leicester City, are normally so unfashionable that they’re not even fashionable in Leicester, where the smart set mostly watch the rugby union team Leicester Tigers. Even when they installed themselves near the top of the Premier League before Christmas, newspapers scarcely noticed them.

Now, with the Foxes five points clear at the top and 7-4 favourites for their first title, that mistake is corrected and the sports pages are running out of superlatives, a comparison with Barcelona being the most improbable. Even I, not a football enthusiast, have watched a few matches. If more football were played as Leicester play it – moving at speed towards their opponents’ goal rather than aimlessly weaving pretty patterns in midfield – I would watch the game more.

Nevertheless, I recall 1963, when Leicester headed the old First Division with five games to play. They picked up only one more point and finished fourth, nine points adrift of the league winners, Everton.

 

Gum unstuck

No, I don’t chew toothpaste to stop me smoking, as the last week’s column strangely suggested. I chew Nicorette gum, a reference written at some stage but somehow lost (probably by me) before it reached print.

Editor: The chief sub apologises for this mistake, which was hers

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle