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."

News
newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10
News
people
News
people
News
peopleStella McCartney apologises over controversial Instagram picture
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsA Welsh town has changed its name - and a prize if you can notice how
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
peopleAt the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
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

Volunteer Mentor for people who have offended

This is an unpaid volunteer role. : Belong: We are looking for volunteers who ...

Modern Foreign Languages Teacher - French

£100 - £110 per day: Randstad Education Cardiff: Modern Foreign Language Teach...

RE/Humanities, Sittingbourne School

Competitive Salary: Randstad Education Group: We urgently seek an experienced ...

SEN Teacher

Negotiable: Randstad Education Southampton: Randstad Education are recruiting ...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?