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MPs' pay: deferring decision 'risks creating another expenses scandal' MPs' pay: deferring decision 'risks creating another expenses scandal'
(3 months later)
Putting off "hard decisions" on whether MPs' pay should be increased risks creating another crisis like the expenses scandal, the head of the House of Commons expenses watchdog has warned.Putting off "hard decisions" on whether MPs' pay should be increased risks creating another crisis like the expenses scandal, the head of the House of Commons expenses watchdog has warned.
Sir Ian Kennedy, chair of the Independent Parliamentary Standards Authority (Ipsa), said in a speech on Friday that the British public needed to face up to stark choices over the makeup of the House of Commons and whether they wished to mainly see representatives of independent means.Sir Ian Kennedy, chair of the Independent Parliamentary Standards Authority (Ipsa), said in a speech on Friday that the British public needed to face up to stark choices over the makeup of the House of Commons and whether they wished to mainly see representatives of independent means.
Acknowledging that the economic downturn and restrictions in public sector pay had made the authority's review of MPs' salaries and pensions tougher, he dismissed criticisms from David Cameron and Nick Clegg, who had cautioned against Ipsa recommending a pay increase, insisting there was "never a good time" to settle the issue.Acknowledging that the economic downturn and restrictions in public sector pay had made the authority's review of MPs' salaries and pensions tougher, he dismissed criticisms from David Cameron and Nick Clegg, who had cautioned against Ipsa recommending a pay increase, insisting there was "never a good time" to settle the issue.
The speech will be widely seen as a way of softening up the public for a proposal recommending an increase in MPs' pay. The parliamentary spending watchdog is expected to recommend next Thursday that MPs should receive a pay rise of up to £10,000, to around £75,000 a year.The speech will be widely seen as a way of softening up the public for a proposal recommending an increase in MPs' pay. The parliamentary spending watchdog is expected to recommend next Thursday that MPs should receive a pay rise of up to £10,000, to around £75,000 a year.
"Of course, this is not a good time to be talking about the pay element of the package, save to notice that in the public sector pay increases are limited to 1% a year," Kennedy said."Of course, this is not a good time to be talking about the pay element of the package, save to notice that in the public sector pay increases are limited to 1% a year," Kennedy said.
"But given that there has never been a good time, this is as good a time as ever."But given that there has never been a good time, this is as good a time as ever.
"Moreover, we know what happens when the element of pay is pushed aside as being simply too hard – the nods and winks school of public financing emerges, and ultimately we end up with circumstances like 2009."Moreover, we know what happens when the element of pay is pushed aside as being simply too hard – the nods and winks school of public financing emerges, and ultimately we end up with circumstances like 2009.
"No one wanted the system that brought parliament to its knees in 2009 to come into being, but it was the inevitable result of hard decisions deferred," he said."No one wanted the system that brought parliament to its knees in 2009 to come into being, but it was the inevitable result of hard decisions deferred," he said.
He signalled that MPs should be paid more than other public sector workers because of their "unique" contribution to society.He signalled that MPs should be paid more than other public sector workers because of their "unique" contribution to society.
But he also floated the idea that once MPs had been given a pay rise, their earnings should be tied to average wages.But he also floated the idea that once MPs had been given a pay rise, their earnings should be tied to average wages.
"Previous reviews have recommended that the appropriate index for MPs' pay should be movements in public sector pay. We feel, however, that the unique nature of their role as representatives of the whole community means that a broader index is required."Previous reviews have recommended that the appropriate index for MPs' pay should be movements in public sector pay. We feel, however, that the unique nature of their role as representatives of the whole community means that a broader index is required.
"We are impressed by the idea that MPs' pay should move in line with the fortunes of those they represent, such that MPs' pay would be indexed to movements in national average earnings. If the average wage goes up, MPs' pay would go up. If the average wage falls, MPs' pay would fall," he said."We are impressed by the idea that MPs' pay should move in line with the fortunes of those they represent, such that MPs' pay would be indexed to movements in national average earnings. If the average wage goes up, MPs' pay would go up. If the average wage falls, MPs' pay would fall," he said.
In the speech to the IPPR thinktank in central London, Kennedy said the history of parliamentary pay was "a frequent rejection by the government of the day – with MPs, often reluctantly, falling into step behind them – of external bodies' recommendations that MPs' pay be increased".In the speech to the IPPR thinktank in central London, Kennedy said the history of parliamentary pay was "a frequent rejection by the government of the day – with MPs, often reluctantly, falling into step behind them – of external bodies' recommendations that MPs' pay be increased".
He added: "This rejection was coupled with a gradual engorgement of a system of 'allowances'. It was inevitable that such an approach would end in tears. The only hope for successive governments, all of whom knew that things were a bit dodgy, was that when the balloon went up, it would not be on their watch. The balloon duly went up in the summer of 2009."He added: "This rejection was coupled with a gradual engorgement of a system of 'allowances'. It was inevitable that such an approach would end in tears. The only hope for successive governments, all of whom knew that things were a bit dodgy, was that when the balloon went up, it would not be on their watch. The balloon duly went up in the summer of 2009."
Kennedy said Ipsa was determined to treat MPs as "professionals".Kennedy said Ipsa was determined to treat MPs as "professionals".
In a clear message to party leaders, who have all indicated concern about big rises, Kennedy stressed that "the power to set pay and pensions of MPs rests with Ipsa and with Ipsa alone".In a clear message to party leaders, who have all indicated concern about big rises, Kennedy stressed that "the power to set pay and pensions of MPs rests with Ipsa and with Ipsa alone".
A Commons vote is not needed, and "the government does not get to pick and choose, there is no opting in or out".A Commons vote is not needed, and "the government does not get to pick and choose, there is no opting in or out".
"My hope is that, as the discussion is joined, political leaders will accept that we have a job to do which they gave us," he said."My hope is that, as the discussion is joined, political leaders will accept that we have a job to do which they gave us," he said.
"If they really do believe that pay and pensions should never ever again be the business of MPs, they should enter the debate with care and accept that external, independent regulation means what it says: that you do not tell the regulator what to do," he added."If they really do believe that pay and pensions should never ever again be the business of MPs, they should enter the debate with care and accept that external, independent regulation means what it says: that you do not tell the regulator what to do," he added.
The new pay and pensions package is due to be implemented after the general election in 2015.The new pay and pensions package is due to be implemented after the general election in 2015.
However, the extension of the 1% public sector pay cap means that MPs will potentially be getting a 15% hike when millions of workers are receiving a real-terms cut.However, the extension of the 1% public sector pay cap means that MPs will potentially be getting a 15% hike when millions of workers are receiving a real-terms cut.
A Downing Street spokesman has said that under the current process, Ipsa's upcoming report will be followed by a period of consultation, after which the watchdog has the power to make the final decision on what MPs should be paid. No 10 has not yet seen a copy of the authority's report, he added.A Downing Street spokesman has said that under the current process, Ipsa's upcoming report will be followed by a period of consultation, after which the watchdog has the power to make the final decision on what MPs should be paid. No 10 has not yet seen a copy of the authority's report, he added.
He reminded reporters at a daily Westminster briefing that Cameron had said at the weekend that it would be "unthinkable" for the overall cost of politics to be increased.He reminded reporters at a daily Westminster briefing that Cameron had said at the weekend that it would be "unthinkable" for the overall cost of politics to be increased.
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