MPs to vote themselves 25% increase in pensions

MPS are preparing to award themselves a 25 per cent pension rise, partly paid out of the public purse. The move sparked outrage yesterday with Iain Duncan Smith, the Tory leader, declaring he would not accept the increase.

Gordon Brown, the Chancellor, has strongly resisted funding the improved pay-outs proposed by the Senior Salaries Review Board. But under a "sensible compromise" announced by Robin Cook, the Leader of the Commons, the Treasury will meet 40 per cent of the cost of the improved entitlements for two years. After then the entire cost would fall on MPs.

If the move, announced in a written answer, is approved by a parliamentary committee on Tuesday, MPs will get the option to increase their pension contributions from 6 to 9 per cent of their salary.

Mr Duncan Smith said: "It is an individual matter for MPs, but my view is that, given the nature of the stock market and the problems we have seen, I hope Parliament will think again. I won't be picking up the increased contribution."