The Independent Parliamentary Standards Authority has released its final report on MPs’ pay today. It’s pretty much what was expected — a big salary bump, paid for by cutting back expenses and pensions, to start in the next Parliament. This is what you need to know:
- MPs’ pay will a take one-off hike to £74,000. Ipsa says this is to ‘address the historic shortfall’. This is a 11 per cent rise based on what they’re paid today, or 9.26 per cent on top of a previously announced inflation-linked pay rise. After this, MPs’ pay will track average earnings — going up or down based on what’s going on rest of the country.
- Less generous pension scheme. The current final salary pension scheme will be discontinued, replaced with one based on career average re-valued earnings (CARE). This is more in line with other parts of the public sector. MPs’ individual contributions to their pensions will also rise.
- Resettlement (redundancy) payments are scrapped. To be replaced with ‘more modest loss-of-office payments’. This will only be handed out to MPs who contest and lose their seat at a general election.
- More expenses restrictions. No more free tea and biscuits, or evening meals when Parliament sits late on the taxpayers’ tab. MPs can only claim for taxis when the Commons rises after 11pm, and hotels if the Commons rises after 1am.
- All of this costs…nothing. Despite the furore over the base pay rise, the reductions in pensions and expenses means the changes will be neutral and cost the taxpayer nothing. Ipsa’s chair Ian Kennedy reminded us today:
‘We have designed these reforms so they do not cost the taxpayer a penny more. When taken with the tens of millions we have saved by reforming the business cost and expenses regime, we have saved the taxpayer over £35 million with the changes we have introduced since 2010.’
What happens now? As I explained earlier this week, MPs could reject this package by passing legislation to disband IPSA and return pay control to Parliament. Or they can individually decline to take the rise. The Telegraph has been phoning around to find out which MPs plan to decline, and which are keeping schtum. Find out what yours is doing here.
But yesterday, Ed Miliband called for cross-party discussions on the proposals, while David Cameron said the ‘door is always open’ to Miliband. Maybe, the choice will taken out of MPs’ hands after all.