Saturday, 12 January 2008

You have your inflation, I have mine...

Gordon Brown has a hard task to try to persuade MPs to accept a similar "pay policy" to everyone else.

Old age pensions, public sector pensions and public sector pay will increase by not more than the inflation figure he chooses to use - the Consumer Prices Index (CPI).

No-one is deceived that the figure he uses will generally be lower than the index that was used for many years, the RPI (The Retail Price Index), which includes many items in its calculation that are omitted in the CPI, - especially energy and many housing costs, including Council Tax. He was very dishonest recently in comparing the RPI under the Tories with the CPI under his own dispensation, but that is the kind of trick he uses regularly.

Quite apart from the fact that MPs are concerned about their living standards, - they know that accepting an increase based on the CPI will mean a reduction in their living standards, some of them are expecting to retire or be retired in two or three years. Their pensions, as with the public sector generally, are indexed and based in their final years of salary.

It's all the more odd then, that the Communication Allowance, - public funds to allow MPs to contact voters and campaign for re-election, at present £10,000 annually, is tied not the CPI apparently but to the RPI. Their salary, if Brown gets his way, will increase by 2.1%, but their campaign allowance will increase by slightly more than double that.

The anomaly we may perhaps be prepared to live with, in order to have regular communications from our MPs. But those on pensions or public sector wages, both constrained to a CPI miserly increase despite massive energy and Council Tax increases, will probably look unfavourably on our political masters if they get their nose in the trough even further and award themselves significant salary increases for us to pay for.

1 comment:

Anonymous said...

He's being rumbled - the NUT today were complaining about a 2.45% pay offer being a pay cut, and they quoted the RPI as the true measure of inflation, rather than the CPI.

There could be trouble ahead.