Thursday, 24 January 2008

MPs show pay restraint

MPs have followed the Government's urging to accept a below-inflation pay rise. Setting a good example to other public sector workers, no snouts in trough, etc, very worthwhile.

Or is it?

A below-inflation rise is effectively a pay cut. In any case, the 'official' rate of inflation was fiddled by Broon when he was Chancellor: one of the many 'stealth' activities which not enough people picked up on. Instead of being based on the Retail Price Index, ie what things actually cost [and what you would think of as inflaction], since 2003 it has been based on something called the Consumer Price Index, which excludes pesky things like mortgage payments and council tax [ie a large chunk of the average household's expenses].

So, this sends out a message to teachers, nurses, police officers and other public sector workers that we should accept a pay cut, too. In the interests of Labour being re-elected the good of the country, you understand. People who earn a great deal less than MPs.

Personally, I think that a worker should get a fair day's pay for a fair day's work. If the basic salary is right (and I don't hear MPs demanding it being reduced), then maintaining it by the rate of inflation each year is also right. So, they should take their pay rise and allow other workers a rise, too. It only has a negative effect on inflation if you have militant 1970s-style unions demanding huge pay rises, and I don't see many of them around at the moment.

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