"In Parliament, I've seen grown men cry over MPs' expenses"

If you think MPs are over-paid, think again. An anonymous MP explains how a flat salary and little chance of ministerial perks cause misery over childcare costs and mortgage payments.

In the pig swill of Westminster something new is stirring.

After two decades of MPs arguing for more pay colleagues are falling over themselves to forego any pay rise, ever. Not now. Not in the future, but please let me keep my pension is the sotto voce subtext.

“I’m happy with my salary,” a headline screams. This young mum will soon learn that childcare costs when you work to midnight will eat it up. Hope she’s got an overdraft or a rich husband. Nick Clegg starts an inevitable Dutch auction by pledging to forego any rise. Easy for him now his rich wife doesn’t have to pay those private school fees after all.

There’s a sigh of inevitability from colleagues as each leader comes out to condemn any pay rise. They’re always first in the queue (we’d be hammered if he didn’t, said one advisor) these leaders with their generous Government salaries, rich wives and ministerial cars.

But this time less anger from the rank and file. And in a sign that the troughs of mud covered expenses have been well and truly emptied there is a palpable uncomfortable feeling about being paid more.

The impending election fills us with dread as candidates will be pressured to declare that they will forgo the pay rise. Easy for the candidate with no hope of winning. A different matter if you have a mortgage to pay. “It’s our job,” says one colleague plaintively.

Tory A-listers are still reeling. Many sacrificed good careers with prospects for a flat salary and little chance of a ministerial job. I’ve seen grown men in tears because of the system of expenses that pillories MPs and makes many afraid to claim.

Others say that you need money to do this job now, “I’m lucky I did well in a previous life so I don’t need to claim anything”, one told me sanguinely in the coffee queue. Not uncommon. And there’s the female MP whose husband gave up his job to do the childcare because it doesn’t pay him to work. Not uncommon with many families but most people imagine MPs can afford full time nannies. The reality is far from that for most.

The young families are struggling the most. If they have a London mortgage or rent (and as we spend half a week in London a number do) the maths just don’t work.

Bravely Mark Pritchard sticks his head above the parapet to declare that Parliament must not be just for the privileged. Multi-millionaire and hero of the working man Adam Afriyie has been brave (and rich) enough to repeat this for three years.

All parties unite in a bit of “why do we do the job” “how often do you think about giving up?” moaning. Well, there’s a long queue of people keen to take it on. Though in some seats the shortlists these days are very short. The reality check about the money and the prospects increasingly makes wannabes think twice. And many walk away.

Pritchard and Afriyie are right. This place must not become a place just for the privileged. Richer MPs will forego more pay because they can. The poorer will because they feel guilty. And this is why we set up an independent body to take the decision out of our hands.

There is one unifying cry – we created the monster that is now putting us  through this prolonged agony of a pre-announcement, a speech and then (oh wait for the abuse) a public consultation before any decision.

So we are to blame for a body which pays its communications official £20,000 a year more than MPs.

There is never a good time to increase MPs’ pay but doing a catch-up every five years will always mean it is too much. So why isn’t the salary linked to another job that the public understand? Should MPs be offered two thirds of a GP’s salary or three quarters? And while we’re at it let’s stop the lunacy that describes employing staff to respond to constituents as “expenses”. If anything underlines the other worldliness of Parliament, that does. 

Now read Eleanor Margolis explain why we need our MPs to be less "moaty" - ie professionals, not wealthy hobbyists.

 

The Houses of Parliament. Photograph: Getty Images
Getty
Show Hide image

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.