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MPs' pay: watchdog recommends 9% salary rise to £74,000 MPs' pay: watchdog recommends 9% salary rise to £74,000
(about 2 hours later)
MPs are facing a public backlash after the body responsible for setting their pay and perks recommended a deal that would result in their salary increasing by more than £8,000. Politicians are facing a public backlash after the body responsible for setting MPs' pay and perks recommended a deal that would result in their salary increasing by more than £8,000.
The Independent Parliamentary Standards Authority (Ipsa) proposed a rise in MPs' pay to around £74,000 a year, but offset it with a crackdown on perks such as dinners on expenses. The Independent Parliamentary Standards Authority (Ipsa) proposed a rise in MPs' pay to around £74,000 a year, but offset it with a crackdown on expenses.
The existing final-salary pension scheme is set to be downgraded to a career-average system, clawing back some of the millions of pounds in extra salary.The existing final-salary pension scheme is set to be downgraded to a career-average system, clawing back some of the millions of pounds in extra salary.
The regulator argued that overall the new package would be only a few hundred thousand pounds a year more costly for the public purse. The regulator argued that overall the new package would be £500,000 a year more costly for the public purse.
The prospect of a pay hike comes with memories of expenses abuses still fresh, and at a time when the rest of the country is suffering austerity measures. Public sector pay has been held down to a 1% increase. The prospect of a pay hike comes with memories of expenses abuses still fresh, and at a time when the rest of the country is suffering austerity measures. Public sector workers' pay has been held down to a 1% increase.
David Cameron, Ed Miliband and Nick Clegg have already urged restraint and are widely expected to reject the extra cash themselves. Ed Miliband and Nick Clegg said they would personally shun the extra money – although David Cameron stopped short of committing himself to doing the same as he comes under pressure from Tory backbenchers who want a pay hike.
However, they would need to change the law to prevent Ipsa pushing the rise through, and such a move would be very unlikely to succeed with many backbenchers convinced they are underpaid. An attempt to stop the recommendation could require a change in the law to prevent the authority from pushing the rise through.
The recommended package released for consultation on Thursday suggests:The recommended package released for consultation on Thursday suggests:
• A salary of £74,000 in 2015, indexed to average earnings in the future. This is a rise of 9.26%.• A salary of £74,000 in 2015, indexed to average earnings in the future. This is a rise of 9.26%.
• A new pension on a par with those in other parts of the public service.• A new pension on a par with those in other parts of the public service.
• Scrapping "resettlement payments" worth tens of thousands of pounds per MP and introducing more modest, modern redundancy packages.• Scrapping "resettlement payments" worth tens of thousands of pounds per MP and introducing more modest, modern redundancy packages.
•A tighter regime of business costs and expenses, ending the provision for things such as evening meals.•A tighter regime of business costs and expenses, ending the provision for things such as evening meals.
Miliband said: "I don't think MPs should be getting a 10% pay rise when nurses and teachers are facing either pay freezes or very low increases and people in the private sector are facing similar circumstances.
"I'm very clear – I don't think this package of proposals should go ahead in the current economic circumstances."
Speaking on his weekly LBC radio phone-in, Clegg said: "I cannot remember a time in modern years where so many millions of people who are getting up every morning, working hard in the public sector to keep our public services going, have been put under such a prolonged period of public sector pay restraint.
"That is, to put it mildly, about the worst time in which you seek then to advocate that MPs should get a double-digit pay increase."
Downing Street refused to comment on whether the prime minister would accept the increase, stressing there would be a consultation before the regulator reached a final decision.
Sir Ian Kennedy, the authority's chairman, said the new package represented a fresh start. "The history of MPs' pay and pensions is a catalogue of fixes, fudges and failures to act. The package we put forward today represents the end of the era of MPs' remuneration being settled by MPs themselves.Sir Ian Kennedy, the authority's chairman, said the new package represented a fresh start. "The history of MPs' pay and pensions is a catalogue of fixes, fudges and failures to act. The package we put forward today represents the end of the era of MPs' remuneration being settled by MPs themselves.
"For the first time, an independent body will decide what MPs should receive. We will do so in full view, and after consultation with the public," he said."For the first time, an independent body will decide what MPs should receive. We will do so in full view, and after consultation with the public," he said.
The deal proposes a pay increase from the current level of £66,000, to take effect after the general election in 2015. From then on wages will rise annually in line with average UK earnings, a mechanism that the regulator hopes will ensure the situation is resolved for the long term.The deal proposes a pay increase from the current level of £66,000, to take effect after the general election in 2015. From then on wages will rise annually in line with average UK earnings, a mechanism that the regulator hopes will ensure the situation is resolved for the long term.
However, the £15 expenses available for dinner when the house sits beyond 7.30pm will be scrapped, saving hundreds of thousands of pounds a year. There could also be tighter rules on using taxis, and restrictions on claiming running costs for second homes such as contents insurance.However, the £15 expenses available for dinner when the house sits beyond 7.30pm will be scrapped, saving hundreds of thousands of pounds a year. There could also be tighter rules on using taxis, and restrictions on claiming running costs for second homes such as contents insurance.
The notorious "golden goodbye" resettlement grants of up to £65,000 that used to be handed to departing MPs will not be brought back. Instead, those defeated at an election could be entitled to redundancy similar to other public sector organisations.The notorious "golden goodbye" resettlement grants of up to £65,000 that used to be handed to departing MPs will not be brought back. Instead, those defeated at an election could be entitled to redundancy similar to other public sector organisations.
The proposals will go out for consultation before Ipsa finalises the arrangements in the autumn.The proposals will go out for consultation before Ipsa finalises the arrangements in the autumn.
Kennedy said the package was fair to taxpayers and fair to MPs. "This package ends the historic peculiarities that have grown up around MPs' pay, and sets MPs' pensions on a sustainable footing for the future. Kennedy said the package was fair to taxpayers and fair to MPs. "This package ends the historic peculiarities that have grown up around MPs' pay, and sets MPs' pensions on a sustainable footing for the future.
"The current pension scheme is unaffordable over the long term. The resettlement grants – which, until IPSA came in, were worth up to £65,000 and available for all – have had their day. We are recommending a modern, professional approach which also means refining the rules on expenses and business costs to rule out MPs claiming for an evening meal.""The current pension scheme is unaffordable over the long term. The resettlement grants – which, until IPSA came in, were worth up to £65,000 and available for all – have had their day. We are recommending a modern, professional approach which also means refining the rules on expenses and business costs to rule out MPs claiming for an evening meal."
He added: "It is clear from our work talking to the public over the last 18 months that people do not know what their MPs do. Clearly that is damaging for our parliament and has to be addressed. And so we are proposing the introduction of an annual report by MPs.He added: "It is clear from our work talking to the public over the last 18 months that people do not know what their MPs do. Clearly that is damaging for our parliament and has to be addressed. And so we are proposing the introduction of an annual report by MPs.
"The aim is to have as transparent a system as possible. The public will know what MPs get for their costs and expenses, their salaries and pensions, and what they have done."The aim is to have as transparent a system as possible. The public will know what MPs get for their costs and expenses, their salaries and pensions, and what they have done.
"I recognise some will just concentrate on the salary rather than the package as a whole, and say it's too high; others that it's too low. There is no easy way forward on this. We have put together a package of reform which we think is fair and which ends the anomalies of the past," he said."I recognise some will just concentrate on the salary rather than the package as a whole, and say it's too high; others that it's too low. There is no easy way forward on this. We have put together a package of reform which we think is fair and which ends the anomalies of the past," he said.
The consultation runs until 20 October.The consultation runs until 20 October.