19th June '08 - They May Not Face Bankruptcy But Will MPs Accept a Reduced Pay Rise?
This week MPs have had to brace themselves for only a 2 percent pay rise, 1.5 percent less than the rise recommended by the Senior Salaries Review Body (SSRB). Now Chancellor Alistair Darling has urged pay rise restraint in both the public and private sectors, amid fears of inflation and growing levels of bankruptcy.
However, in news that can only help stabilise any worries over inflationary pressures and bankruptcy rates in the UK, during a speech delivered at Mansion House, Darling said he believes that “Our economy will continue to grow.”
It remains to be seen though whether backbench MPs – ministers have already consented to the 2 percent rise – will be willing to accept any compromised deal, with some Labour backbenchers expected to revolt and Tory members of the MPs Estimates Committee expected to hold out for the SSRB recommended pay rise.
During his speech Darling said, “Continued restraint on pay is required from both the public and private sector.
“We must recognise the need to reward efforts of people who work hard. But to return now to inflationary pay settlements would undermine rather than raise people's living standards with a damaging circle of wage increases eroded by steadily rising prices.
“We must never return to those days.”
Also at Mansion House, Bank of England Governor Mervyn King did little to allay the bankruptcy concerns of ordinary workers, commenting that he expected typical working levels of take-home pay to stagnate.
To find out more about interest rates and inflation, visit the Bank of England.
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