Anger as MPs’ £10,000 payrise deal unveiled

MPs are set to get a payrise of around 12 per cent. Picture: PA
MPs are set to get a payrise of around 12 per cent. Picture: PA
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MPs are braced for a major public backlash today when a deal that would see their pay soar by almost £10,000 is unveiled.

The Independent Parliamentary Standards Authority (Ipsa) is expected to propose a rise to around £75,000 - but offset it with a crackdown on perks such as dinners on expenses.

The existing final salary pension scheme is also set to be downgraded to a career average system, clawing back some of the millions of pounds in extra salary.

The regulator is likely to argue that overall the new package will only be a few hundred thousand pounds a year more costly for the public purse.

But the prospect of a pay hike is certain to spark public fury with memories of expenses abuses still fresh, and the rest of the country suffering austerity.

Rejected

David Cameron, Ed Miliband and Nick Clegg have already urged restraint and are widely expected to reject the extra cash themselves.

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 most backbenchers convinced they are underpaid.

Ipsa chairman Sir Ian Kennedy admitted last week that the 1% cap on public sector pay rises made the job of reviewing MPs’ remuneration more difficult.

But he insisted there was “never a good time” to deal with the issue, and warned that avoiding an increase could create another expenses-style crisis as politicians sought to top up their salaries.

The deal being unveiled this morning is expected to back a 12% rise from the current level of £66,000, to take effect after the general election in 2015.

Golden goodbye

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.

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.

A senior Labour source said: “Our view is clear that any decision about MPs’ pay must reflect wider economic circumstances and what is happening in the rest of the public sector.

“It must be consistent with what is happening to nurses, teachers and others in the public sector as well as conditions in the private sector.”