In a move that was guaranteed to provoke the ire of public sector unions, the Prime Minister said that junior ministers in the House of Lords would have their pay increased from pounds 44,832 to pounds 55,631.
In line with recommendations made by the independent Senior Salaries Review Body (SSRB), ministers of state will also receive rises of 20 per cent to take their earnings up to pounds 64,426.
Mr Blair said that the increases, which include a one-off payment of pounds 8,500, were needed to bring ministers in the Lords into line with their counterparts in the Commons. Cabinet pay will be determined later this year, but the large "catch-up" rises are sure to increase the pressure from some ministers in the Commons to take up rises owed to them.
John Prescott, the Deputy Prime Minister, David Blunkett, the Secretary of State for Education, and Ann Taylor, the Chief Whip, have claimed that they should be allowed to receive an extra pounds 16,000 owed since the last general election.
However, the Chancellor, Gordon Brown, is known to have made clear to his colleagues they should forgo the upgrade, equivalent to a 17 per cent rise, to avoid criticism at a time when the Government was urging pay restraint on the private and public sectors. Tony Blair set an example for his colleagues when he declared that he would take just pounds 60,167 of the pounds 102,750 to which he is entitled. Cabinet ministers followed suit and currently receive pounds 45,201 of their pounds 61,650 entitlement - but many believe that if they do not take up the extra payment soon, they will lose it for ever.
Public sector workers were given a 4.1 per cent pay award earlier this year and last night Unison, Britain's biggest union, said the rise for ministers in the Lords contrasted badly with its own members' increase.
Downing Street said that when the pounds 8,500 one-off increase was discounted, the rises were only 2.8 per cent for ministers.
Mr Blair also announced in a written parliamentary answer that he would accept the SSRB's recommendation to pay pounds 64,307 to the First Minister for Scotland and Northern Ireland and the First Secretary of the Welsh Assembly.
The review board had suggested that the Deputy First Minster for Ulster should receive pounds 47,504, but Mr Blair said that in view of the "unique political situation" in the province, the SDLP's Seamus Mallon would be paid the same as David Trimble. Salaries for the members of the Scottish Parliament will be pounds 40,092, compared with pounds 38,036 for members of the Northern Ireland Assembly and pounds 33,500 for members of the Welsh Assembly.Reuse content