David Cameron has threatened the long-term future of the body responsible for fixing parliamentary pay and expenses as it prepared to press ahead with an 11 per cent pay rise for MPs.
He has joined Nick Clegg and Ed Miliband with a plea to the Independent Parliamentary Standards Authority (Ipsa) to abandon the controversial proposal. It is due to confirm the plans on Thursday.
The Prime Minister hinted at action to reform, or even abolish, Ipsa if it failed to heed the public hostility to the rise which is due to be implemented in 18 months’ time after the next general election.
He told the Commons: “The idea of an 11 per cent pay rise in one year at a time of pay restraint is simply unacceptable…
“Ipsa do need to think again, and unless they do so, I don’t think anyone will want to rule anything out.”
Asked if abolition Ipsa was a possibility, a Downing Street source replied: “He is ruling nothing out.”
However, the source also made clear Mr Cameron would not intervene until mid-2015 when the authority gives final approval to its proposed increase.
Labour accused him of kicking the issue into the “long grass” and Mr Miliband called for a meeting on Thursday between party leaders and Sir Ian Kennedy, the Ipsa chairman.
In a letter to Mr Cameron, the Labour leader wrote: “The public expect us to resolve this now and not wait until 2015. It only undermines confidence and trust in our political system if the uncertainty about MPs’ pay is allowed to continue.”
Ipsa is set to confirm its proposals for a salary increase that would see MPs pay leap from £66,396 this year to £74,000 in 2015.
It will argue that the cost of the hike will be offset by new tougher rules on parliamentary expenses, higher pensions contributions and the end of pay-offs to MPs who retire or voluntarily step down.
Ipsa will point out that recommended rise will be subject to a statutory review after the election, a process which Downing Street says should be allowed to run its course. Liberal Democrats sources said Mr Clegg took the same view.
But a Labour source said the three main party leaders should jointly make clear the “package is unacceptable to the public and cannot go ahead”. He said it should be subject to a “public opinion override” to avert the inflation-busting rise.
The source said: “The mechanism should be this: Ipsa should listen, Ipsa should think again and Ipsa should realise that we cannot have the package that it is reported to be proposing, we cannot have that go ahead when we are having the biggest cost of living crisis in a generation.”