MP Pay Rise: We’re All In It Together, But MPs Are 10% Better Off For Being So

REUTERS/UK Parliament
REUTERS/UK Parliament

Politicians are bracing themselves for a backlash after a 10 per cent pay rise for MPs from £67,060 to £74,000 a year was announced by the Independent Parliamentary Standards Authority (Ipsa). The move comes in spite of widespread opposition from the general public, senior members of all political parties and also trade unions at a time when public sector workers are being asked to accept a one per cent rise for four years.

The effect is immediate as the MP pay increase is backdated to 8 May 2015, and will be paid automatically.  In addition an MP elected before the 2016 General Elecion will now enjoy a wealthier retirement, as the final salary pension will be worth more.

The move was not as favorable to MPs as it could have been; Ipsa decided any future MP pay rise will become an annual event adjusted every April in line with average public sector earnings. The original proposal had linked it to UK-wide average earnings which PA reports could have left MPs £23,000 better off by 2020.

In the foreword to their report Ipsa said the change to a lower increase came about because they were “mindful of the fact that the country is going through an extended period of austerity.”

Jonathan Isaby, Chief Executive of the TaxPayers’ Alliance, warned of public dissatisfaction:

“Just a week after the Chancellor rightly announced further pay restraint in the public sector, it is totally inappropriate for Ipsa to be pushing forward with this pay hike. This unaccountable body is doing our MPs a great disservice: the invisible quangocrats at Ipsa may have made this regrettable decision, but the public will inevitably direct their anger at their elected representatives in Parliament.

“We welcome the fact that Ipsa has tied MPs’ future pay deals to public sector pay rather than average earnings across the economy as planned, but taxpayers will see that as little consolation.

“Make no mistake: Ipsa’s decision to hand MPs a huge page rise is totally misguided, and the public won’t forget it.”

The Guardian reports Ipsa’s chair, Sir Ian Kennedy, said the issue of MPs’ pay had been “ducked for decades” which led to the expenses scandal that saw several MPs jailed. He explained the reasoning behind the increase, saying:

“Over the last parliament, MPs’ pay increased by two per cent, compared to 5 per cent in the public sector and 10 per cent in the whole economy. It is right that we make this one-off increase and then formally link MPs’ pay to public sector pay.”

The potential backlash has also provided an opening for cynical political gamesmanship from opposition parties.

Senior Conservatives such as Eric Pickles and Nicky Morgan have announced they will give the extra money to charity while Philip Hammond and Michael Gove also previously declared they would not take the increase. However, the Prime Minister is reportedly reluctant to urge other MPs to follow their example because he needs to keep his backbench MPs on side. Managing a slim majority of 12 seats is a tricky business, not least when many backbenchers privately admit that they welcome the increase.

One such MP, Tobias Ellwood, was quoted in Ipsa’s report, saying:

“I know I speak for the silent majority (who are not millionaires) to say this increase is well overdue… I hope common sense will prevail and this pay rise will be honoured.”

The fact that sentiments such as Ellwood’s are common, even if tacitly so, among Conservative ranks gives the Labour opposition an opportunity to challenge the Prime Minister, especially grandstanding party leadership contenders, of which three – Andy Burnham, Yvette Cooper and Liz Kendall – have said they will not take the increase. They know they can fire shots which will drive wedges between the Prime Minister and his colleagues.

The Telegraph reports Cooper said the increase was “crazy” asking:

“How on earth has David Cameron allowed this to happen? He needs to step in urgently and stop this MPs’ pay rise going ahead. The idea of increasing MPs’ pay by 10 per cent at a time when nurses, care workers, police officers and our armed forces face another five years’ pay freeze is completely unfair. The Tories are cutting tax credits for ordinary families yet allowing this Ipsa increase to go ahead.

“If it does now go ahead, I won’t take it. If that is impossible then I will put the money towards something like funding an apprenticeship or similar cause in my constituency.

“But I hope the prime minister does the right thing and intervenes to stop Ipsa pressing ahead with this.”

The fact is that short of legislating to abolish Ipsa, a body set up largely in response to the 2009 parliamentary expenses scandal, there is little the Prime Minister can do and Cooper knows it. She can criticise the decision and link it to nurses, care workers, ordinary families and apprenticeships until she is blue (or red) in the face, but the point remains that the body is meant to be independent.

It is perhaps unpalatable, but Conservative environment minister Rory Stewart nails Cooper’s lie: “Ipsa has conducted serious research and comparisons. I believe they are in a better position than MPs to be objective. I would accept their recommendation.”

All is not quite lost, though. The Telegraph report concludes with news that Ipsa has offered to help MPs give their pay rise to charity. A spokesman said: “If an MP wishes to make a donation to charity, then that is a matter for them. Ipsa can make arrangements for payroll giving through the Charities Aid Foundation’s Give-As-You-Earn programme.”

It will be interesting to see how many MPs take up that offer…

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