The Government has embarked on a sweeping shake-up of top public service salaries which mean that recommendations for judges, senior armed forces ranks and the most senior civil servants will in future have to take into account the state of the economy.
The changes were included in a written parliamentary answer by the Prime Minister last week, which changed the name and function of the old Top Salaries Review Body. The SSRB will be asked to include 'affordability' among its criteria.
Up to now the TSRB has recommended salary levels appropriate to recruitment and retention of top-calibre staff and the levels for jobs of comparable responsibility in the private sector.
It has been up to the Government to decide whether it can afford them. The Review Body will now be constrained by its need to take into account the state of public finances.
But in the longer term the change is seen in Whitehall as holding out the prospect of higher overall pay for MPs, because it could pave the way for their salaries to be decoupled from those of civil servants. Under a five-year- old formula, MPs' pay is fixed at 89 per cent of the level of assistant secretaries.
The Prime Minister said in his answer that the Review Body would now take account of evidence 'it receives about wider economic considerations and the affordability of its recommendations'. But he also announced that the body could also be asked 'from time to time' to report on the pay and pensions of MPs and ministers.
One reason for a possible change in the method of fixing MPs' pay is that because civil service salaries are increasingly fixed according to performance and merit, it will be difficult to tie MPs' salaries to Whitehall levels.
MPs agreed to freeze their pounds 30,594-a-year pay last November after being promised that they would be paid the 3.9 per cent - due to them last January - in January next year. The Government asked them to accept the one-year freeze to set an example, after the announcement of the 1.5 per cent ceiling on pay in the public services.
Beside their salaries, MPs receive an office costs allowance of pounds 39,960, additional costs for accommodation in London, and London travel allowances.
In the United States, Representatives receive pounds 70,000 a year.