We want some of that! Unions demand 11% increases as MPs' pay rises to £74,000 a year

But regulator says cost would be offset by curbs to pensions, expenses for dinners, TV licences, taxis, and 'golden goodbyes'

Whitehall Editor

MPs are to see their pay rise to £74,000 a year, under controversial plans to bring their salaries in line with other senior public sector wages.

The move will cost the taxpayer £4.6 million a year and will take effect after the general election in 2015.

However, the Independent Parliamentary Standards Authority (Ipsa) said it would offset the costs with curbs to pensions, expenses for dinners, TV licences, taxis, and "golden goodbyes".

It insisted that the overall burden on the taxpayer would only go up by £500,000.

Public sector unions immediately demanded matching 11 per cent increases for their members, while a number of MPs broke cover to condemn Ipsa for opening them to public vitriol.

Under the shake-up, the current salary of £66,396 will rise to £74,000 in May 2015.

From then wages will rise annually in line with average UK earnings, a mechanism the regulator hopes will ensure the situation is resolved for the long term.

The existing final salary pension scheme will be downgraded to career average - as happened across the rest of the public sector some years ago.

Benefits will accrue at 1/51 of salary per year, rather than 1/40. But they will have to contribute less - 9.2 per cent of salary instead of 13.75 per cent - and the retirement age will be the same as for the state pension.

Death in service benefits will also be reduced from four and a quarter times salary to twice salary, and widows will be entitled to less.

In total the pension changes will save £2.5 million in the first year, according to Ipsa.

The old pre-2010 "resettlement grants" of up to £65,000 for departing MPs, even if they stood down voluntarily, will not be brought back.

In 2015 there will be interim arrangements of up to £33,000 for those who lose an election, but by 2020 defeated politicians will only be entitled to two weeks' pay for every year of service if they are under 41, and three weeks if they are older - similar to redundancy terms in the rest of the public sector.

The £15 expenses available for dinner when the House sits beyond 7.30pm will be scrapped, and there will be tighter rules on using taxis and hotels.

There will also be a crackdown on claims for running second homes, with costs of TV licences and contents insurance no longer being met.

The expenses tweaks will save £178,000 in 2015, Ipsa said.

The proposals will go out for consultation before Ipsa finalises the arrangements in the autumn. Party leaders have signalled alarm at the prospect of a pay rise above the 1% cap imposed on the public sector for 2015-16 - but it would require a change in the law to prevent the regulator pushing it through.

Ipsa chairman Sir Ian Kennedy said the proposals marked the "end of the era of MPs' remuneration being settled by MPs themselves".

"This package ends the historic peculiarities that have grown up around MPs' pay, and sets MPs' pensions on a sustainable footing for the future.

"The current pension scheme is unaffordable over the long term; the resettlement grants - which, until Ipsa came in, were worth up to £65,000 and available for all - have had their day. We are recommending a modern, professional approach which also means refining the rules on expenses and business costs to rule out MPs claiming for an evening meal.

"It is clear from our work talking to the public over the last 18 months that people do not know what their MPs do. Clearly, that is damaging for our Parliament and has to be addressed. And so we are proposing the introduction of an annual report by MPs.

"The aim is to have as transparent a system as possible. The public will know what MPs get for their costs and expenses, their salaries and pensions, and what they have done.

"I recognise some will just concentrate on the salary, rather than the package as a whole, and say it's too high; others that it's too low. There is no easy way forward on this. We have put together a package of reform which we think is fair and which ends the anomalies of the past.

"The recommendations Ipsa is proposing have a net cost of £500,000 a year."

The regulator said the total cost of remuneration and expenses for MPs was now £7 million less in real terms than in 2008-09 - although that was before the expenses scandal that rocked Parliament and sent claims plummeting.

"This means that our solution to the problem of MPs pay and expenses - the problem we were created to fix - is £7 million a year cheaper than the regime we inherited," Sir Ian said.

Senior politicians condemned Ipsa’s recommendation.

Downing Street said Mr Cameron was strongly opposed to the proposed rise.

“The Prime Minister's view is that the cost of politics should not be going up, it should come down," Mr Cameron's official spokesman said.

"He certainly doesn't think MPs' pay should be going up while public sector pay is, rightly, being constrained."

Asked whether Mr Cameron would accept the rise, the spokesman said: "There isn't a rise, there is a proposal on which views are being sought."

The spokesman added: "Ipsa was set up for reasons that you know well. There is a process as a result of that and it is right that it is followed."

Labour leader Ed Miliband said he did not believe the rise should go ahead - and confirmed he would not take it if it did.

"I don't think MPs should be getting a 10 per cent pay rise when nurses and teachers are facing either pay freezes or very low increases and people in the private sector are facing similar circumstances," he said.

"I'm very clear - I don't think this package of proposals should go ahead in the current economic circumstances."

He added: "If this was to go ahead I wouldn't be accepting this pay rise but I don't think it is going to go ahead in the current circumstances because I think that when Ipsa consult the public, the public will be pretty clear that while the difficulties we have in the economy persist we can't have MPs getting a 10 per cent pay rise."

Asked if there should be a parliamentary vote to block the increase, Mr Miliband replied: "It's actually taken out of MPs hands in the new system that we have, so I don't think at this stage it's about MPs voting on it.

“But I do think it's about MPs, party leaders expressing a clear view about what is and isn't right. That's why it's right that Ipsa has said they are going to have a consultation on this, a consultation with members of parliament but also a consultation with members of the public.”

Ipsa's report said it was a legal requirement that it carried out a further pay review after the general election but “we envisage that this review will not be lengthy or extensive”.

Sir Ian said it was up to MPs whether they kept the extra money, but it would be paid to them.

“We are not going to run 650 employment schemes, that would be daft,” he said. “MPs can do what they want to do.”

The Ipsa chairman also refused to say whether he was worth more than an MP.

He said his pay in the role had ranged from around “low £60,000s to high £70,000s” on a day rate of £700.

“All I can say is that we have different responsibilities,” he added. "I fulfil mine pursuant to a salary that is fixed by the Speaker of the Commons, not by me."

Start your day with The Independent, sign up for daily news emails
News
Sir David Attenborough
people
Life and Style
Young girl and bowl of cereal
food + drink
News
Comic miserablist Larry David in 'Curb Your Enthusiasm'
peopleDirector of new documentary Misery Loves Comedy reveals how he got them to open up
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Sport
football
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
i100
Arts and Entertainment
Ready to open the Baftas, rockers Kasabian are also ‘great film fans’
musicExclusive: Rockers promise an explosive opening to the evening
Life and Style
David Bowie by Duffy
fashion
Arts and Entertainment
Hell, yeah: members of the 369th Infantry arrive back in New York
booksWorld War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel
News
advertisingVideo: The company that brought you the 'Bud' 'Weis' 'Er' frogs and 'Wasssssup' ads, has something up its sleeve for Sunday's big match
Arts and Entertainment
tv
News
i100
Environment
Dame Vivienne Westwood speaking at a fracking protest outside Parliament on Monday (AP)
environment
Life and Style
tech
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: This post arises as a result of the need to...

Tradewind Recruitment: Class Teacher Required ASAP In Uminster

£120 - £150 per annum: Tradewind Recruitment: I am recruiting on instruction o...

Ashdown Group: Head of Finance - Financial Director - London - £70,000

£70000 per annum: Ashdown Group: Head of Finance - Financial Controller - Fina...

Ashdown Group: Marketing Executive - Wimbledon, SW London

£24000 - £28000 per annum + benefits: Ashdown Group: Marketing Executive - Wim...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness