Flat-footed Cameron is being outmanoeuvred by Miliband on MPs' pay

Just as Gordon Brown was outplayed by Cameron during the expenses scandal, so the PM risks suffering the same fate now.

After focusing for months on the "cost-of-living crisis" and the dramatic fall in real wages, Ed Miliband is more aware than most of how damaging the spectacle of MPs receiving an 11% pay rise (taking their annual salary to £74,000) could be. In an attempt to resolve the issue, ahead of the expected announcement by the Independent Parliamentary Standards Authority (IPSA) on Thursday, Miliband has now called for cross-party talks to be held.

A Labour spokesman said:

If the package of proposals being set out by Ipsa is as reported it cannot go ahead when people are going through the biggest cost-of-living crisis for a generation.

Therefore we are asking the Conservatives and the Liberal Democrats for a cross-party approach that recognises the current economic circumstances where workers in the public and private sectors are going through such difficult times.

A Labour source told me that the hope was that a united front by the three main parties against the pay rise might persuade IPSA, which was awarded control over MPs' pay and conditions following the expenses scandal, to think again.

But Miliband's offer has been quickly rebuffed by Cameron, with a Downing Street spokesman commenting: "There is no need for cross-party talks on this issue because we have already made clear that there shouldn’t be pay rises at a time of public sector pay restraint." (The Mail also reports on irritation that "the Labour gambit came as Mr Cameron was boarding a plane to fly to South Africa for Nelson Mandela’s memorial service.") 

Asked yesterday whether Cameron would accept the rise (Miliband and Clegg have both unambiguously stated that they will not), No. 10 similarly said: "Any proposal that they make will be reviewed in mid-2015, so it doesn’t arise. The Prime Minister’s longstanding position is that the cost of politics should go down, not up. He doesn’t think that MPs’ pay should go up while public sector pay is being restrained."

This raises the possibility that the rise could take place after 2015 if the 1% cap on public sector pay increases (a real-terms cut) is lifted, although given the government's vow to maintain austerity until at least 2018-19 this seems unlikely. Rather, it appears that Cameron is simply determined to kick the issue into the post-election long grass. But given the inevitable outrage when IPSA recommends an 11% rise on Thursday, it is questionable how long he will be able to maintain this ambiguity. Just as Cameron outmanoeuvred a flat-flooted Gordon Brown during the expenses scandal, so he is now in danger of suffering the same fate at the hands of Miliband.

With Tory MPs more likely to believe that they should be paid more (according to a private poll carried out by YouGov), more likely to have given up lucrative careers elsewhere (although many, of course, maintain second jobs) and privately resentful of Cameron's personal wealth ("it's alright for him", is a common refrain), the PM's hand is notably weaker than Miliband's. Conservative MP Charles Walker spoke for a significant number yesterday when he said: "I've been working since I left university for 25 years and I have never turned a pay rise down and I don't intend to start turning any future pay rises down." 

But if Cameron wants to avoid handing Labour a golden opportunity to portray him as "out-of-touch", he will need to override this opposition and say what he has so far not: I will not accept the rise and I encourage others to do the same. 

Meanwhile, Labour MP John Mann has tabled an Early Day Motion calling for parliament to instruct IPSA to limit the increase to 1% in line with the rest of the public sector. Here's the full text: 

That this House notes the decision in the Spending Review announced to Parliament on 26 June 2013 to restrict public sector pay increases to 1 per cent; endorses the view that what is good enough for the workers is good enough for the politicians; and instructs the Independent Parliamentary Standards Authority to enforce public sector pay policy in its decisions over hon. Members' pay.

Given how many MPs privately believe that they should be paid more (69% according to that poll by YouGov, with an average salary of £86,250 recommended), it will be worth watching to see how many nevertheless sign Mann's motion. 

David Cameron and Ed Miliband in Westminster Hall. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Will Euroscepticism prove an unbeatable advantage in the Conservative leadership race?

Conservative members who are eager for Brexit are still searching for a heavyweight champion - and they could yet inherit the earth.

Put your money on Liam Fox? The former Defence Secretary has been given a boost by the news that ConservativeHome’s rolling survey of party members preferences for the next Conservative leader. Jeremy Wilson at BusinessInsider and James Millar at the Sunday Post have both tipped Fox for the top job.

Are they right? The expectation among Conservative MPs is that there will be several candidates from the Tory right: Dominic Raab, Priti Patel and potentially Owen Paterson could all be candidates, while Boris Johnson, in the words of one: “rides both horses – is he the candidate of the left, of the right, or both?”

MPs will whittle down the field of candidates to a top two, who will then be voted on by the membership.  (As Graham Brady, chair of the 1922 Committee, notes in his interview with my colleague George Eaton, Conservative MPs could choose to offer a wider field if they so desired, but would be unlikely to surrender more power to party activists.)

The extreme likelihood is that that contest will be between two candidates: George Osborne and not-George Osborne.  “We know that the Chancellor has a bye to the final,” one minister observes, “But once you’re in the final – well, then it’s anyone’s game.”

Could “not-George Osborne” be Liam Fox? Well, the difficulty, as one MP observes, is we don’t really know what the Conservative leadership election is about:

“We don’t even know what the questions are to which the candidates will attempt to present themselves as the answer. Usually, that question would be: who can win us the election? But now that Labour have Corbyn, that question is taken care of.”

So what’s the question that MPs will be asking? We simply don’t know – and it may be that they come to a very different conclusion to their members, just as in 2001, when Ken Clarke won among MPs – before being defeated in a landslide by Conservative activists.

Much depends not only on the outcome of the European referendum, but also on its conduct. If the contest is particularly bruising, it may be that MPs are looking for a candidate who will “heal and settle”, in the words of one. That would disadvantage Fox, who will likely be a combative presence in the European referendum, and could benefit Boris Johnson, who, as one MP put it, “rides both horses” and will be less intimately linked with the referendum and its outcome than Osborne.

But equally, it could be that Euroscepticism proves to be a less powerful card than we currently expect. Ignoring the not inconsiderable organisational hurdles that have to be cleared to beat Theresa May, Boris Johnson, and potentially any or all of the “next generation” of Sajid Javid, Nicky Morgan or Stephen Crabb, we simply don’t know what the reaction of Conservative members to the In-Out referendum will be.

Firstly, there’s a non-trivial possibility that Leave could still win, despite its difficulties at centre-forward. The incentive to “reward” an Outer will be smaller. But if Britain votes to Remain – and if that vote is seen by Conservative members as the result of “dirty tricks” by the Conservative leadership – it could be that many members, far from sticking around for another three to four years to vote in the election, simply decide to leave. The last time that Cameron went against the dearest instincts of many of his party grassroots, the result was victory for the Prime Minister – and an activist base that, as the result of defections to Ukip and cancelled membership fees, is more socially liberal and more sympathetic to Cameron than it was before. Don’t forget that, for all the worry about “entryism” in the Labour leadership, it was “exitism” – of Labour members who supported David Miliband and liked the New Labour years  - that shifted that party towards Jeremy Corbyn.

It could be that if – as Brady predicts in this week’s New Statesman – the final two is an Inner and an Outer, the Eurosceptic candidate finds that the members who might have backed them are simply no longer around.

It comes back to the biggest known unknown in the race to succeed Cameron: Conservative members. For the first time in British political history, a Prime Minister will be chosen, not by MPs with an electoral mandate of their own or by voters at a general election but by an entirelyself-selecting group: party members. And we simply don't know enough about what they feel - yet. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.