Will MPs reclaim the power to vote against a pay rise?

Parliament's decision to give up the right to set MPs' pay looks unwise as IPSA prepares to recommend an increase of £10,000.

After George Osborne announced last week that the 1 per cent cap on public sector pay rises would be extended until 2015-16, there could hardly be a worse time for MPs to receive an inflation-busting increase of £10,000. But it is a move that David Cameron is powerless to prevent. When MPs founded the Independent Parliamentary Standards Authority (IPSA) and gave up control over their pay and conditions it was the intention of restoring public trust after the stain of the expenses scandal. But with IPSA likely to recommend a significant increase in their pay when it reports on Friday, that decision is about to return to haunt them. 

The independent body is expected to propose that MPs' salaries rise from their current level of £65,738 to around £75,000, with IPSA head Ian Kennedy thought to favour an even greater increase to £85,000. If there is anything that could diminish the reputation of parliament even further, this is it. But ministers long abandoned the power to prevent such a PR debacle. As Francis Maude, the Cabinet Office minister, explained on Sky News, "It's not in my control, it's in the control of the Independent Parliamentary Standards Authority. It isn't even in the control of MPs themselves."

For this reason, while David Cameron declared yesterday in Islamabad that it would be "unthinkable" for "the cost of politics or Westminster" to go up, he was ultimately unable to rule out a rise. The hope is that an increase in basic pay could be offset by cuts to MPs' pensions and other benefits. But this compromise is hardly likely to placate an austerity-scarred public. 

Labour, meanwhile, has already signalled that it will oppose any increase above 1 per cent, bringing MPs into line with other public sector workers, and that Ed Miliband will pledge to scrap the rise if he becomes prime minister. As for Nick Clegg he declared in January, "I think it’s potty. It’s not going to happen, certainly if I’ve got anything to do with it."

The ultimate result of the row could be MPs reclaiming control over their pay. The often prescient David Davis (who commented, "I don't see how we could ever again even think of uttering the words 'all in it together' if we accepted this") recently suggested "that is what may end up happening". 

It's worth remembering that a private survey of 100 MPs conducted by YouGov on IPSA's behalf found that 69 per cent thought they were underpaid, with an average salary of £86,250 recommended. On average, Tory MPs proposed a salary of £96,740, the Lib Dems £78,361 and Labour £77,322. A fifth suggested that they should be paid £95,000 or more. But would they have the chutzpah to vote accordingly in parliament? That seems unlikely. 

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

George Eaton is political editor of the New Statesman.

Photo: Getty
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Sooner or later, a British university is going to go bankrupt

Theresa May's anti-immigration policies will have a big impact - and no-one is talking about it. 

The most effective way to regenerate somewhere? Build a university there. Of all the bits of the public sector, they have the most beneficial local effects – they create, near-instantly, a constellation of jobs, both directly and indirectly.

Don’t forget that the housing crisis in England’s great cities is the jobs crisis everywhere else: universities not only attract students but create graduate employment, both through directly working for the university or servicing its students and staff.

In the United Kingdom, when you look at the renaissance of England’s cities from the 1990s to the present day, universities are often unnoticed and uncelebrated but they are always at the heart of the picture.

And crucial to their funding: the high fees of overseas students. Thanks to the dominance of Oxford and Cambridge in television and film, the wide spread of English around the world, and the soft power of the BBC, particularly the World Service,  an education at a British university is highly prized around of the world. Add to that the fact that higher education is something that Britain does well and the conditions for financially secure development of regional centres of growth and jobs – supposedly the tentpole of Theresa May’s agenda – are all in place.

But at the Home Office, May did more to stop the flow of foreign students into higher education in Britain than any other minister since the Second World War. Under May, that department did its utmost to reduce the number of overseas students, despite opposition both from BIS, then responsible for higher education, and the Treasury, then supremely powerful under the leadership of George Osborne.

That’s the hidden story in today’s Office of National Statistics figures showing a drop in the number of international students. Even small falls in the number of international students has big repercussions for student funding. Take the University of Hull – one in six students are international students. But remove their contribution in fees and the University’s finances would instantly go from deficit into debt. At Imperial, international students make up a third of the student population – but contribute 56 per cent of student fee income.

Bluntly – if May continues to reduce student numbers, the end result is going to be a university going bust, with massive knock-on effects, not only for research enterprise but for the local economies of the surrounding area.

And that’s the trajectory under David Cameron, when the Home Office’s instincts faced strong countervailing pressure from a powerful Treasury and a department for Business, Innovation and Skills that for most of his premiership hosted a vocal Liberal Democrat who needed to be mollified. There’s every reason to believe that the Cameron-era trajectory will accelerate, rather than decline, now that May is at the Treasury, the new department of Business, Energy and Industrial Strategy doesn’t even have responsibility for higher education anymore. (That’s back at the Department for Education, where the Secretary of State, Justine Greening, is a May loyalist.)

We talk about the pressures in the NHS or in care, and those, too, are warning lights in the British state. But watch out too, for a university that needs to be bailed out before long. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.