Daily allowance in House of Lords set to rise to £323

Above-inflation hike in tax-free payment is triggered automatically by MPs' rise

Andrew Woodcock
Political Editor
Tuesday 11 February 2020 13:02
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Members of the House of Lords look set to receive a tax-free pay rise of an inflation-busting 3.1 per cent in April.

If confirmed, the hike will take peers’ daily allowance up from £313 to £323, meaning an annual tax-free income of more than £48,000 for a member attending for the typical 150 days the Upper House sits each year.

It results from a 2018 decision to link annual increases in allowances automatically to MPs’ salaries, removing any role for peers in setting their own pay.

MPs’ annual rises are pegged to the change in average weekly earnings in the public sector for October, provisionally calculated by the Office for National Statistics at 3.1 per cent.

The Independent Parliamentary Standards Authority (Ipsa) will confirm the increase at the start of next month, following any revision to the figures by ONS, which has previously left them unchanged.

To claim their allowances, peers must attend the Palace of Westminster and certify that they have undertaken parliamentary work that day.

Peers whose main address is outside greater London can also claim travel expenses to attend the House.

The TaxPayers’ Alliance told MailOnline that the rise “looks like a plum deal for the Peers, but a rum deal for the taxpayer”.

But a House of Lords spokesman said: “Between 2010 and 2018 the daily allowance for members of the House of Lords was frozen.

“In April 2018 it was agreed to link increases to the daily allowance to the figure used by Ipsa for increasing the salaries of MPs, which itself is linked to public sector pay awards.

“In the last decade the House of Lords daily allowance has increased by 4.3 per cent. In that same period the salaries of MPs went up by more than 20 per cent.

“By linking the daily allowance increase to Ipsa's method it ensures that any increase is set by an independent body and members are no longer setting their own allowance levels.”

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