MEPs to stay on gravy train with higher pay than Westminster

Efforts to reform the pay and expenses regime for MEPs provoked new controversy yesterday when plans emerged that would give British Euro-MPs more money than their Westminster counterparts.

After two years of bitter wrangling, the European Parliament's influential legal affairs committee approved plans to set MEPs' pay at half the rate of judges at the European Court of Justice.

The proposal, which would be coupled with a drive to clean up the parliament's notoriously lax and lavish expenses regime, would mean Euro-MPs from all the 15 member states being paid the same salary for the first time. At present they receive the same deal as national parliamentarians but there is a history of widespread abuse of travel expenses, which has fuelled the "gravy train" image of the Strasbourg assembly.

Under the plan agreed yesterday the 626 members of the European Parliament would earn a salary of €8,500 a month, which is about £62,000 a year – about £6,000 more than MPs are earning.

The proposed deal is significantly higher than that put forward by independent experts who proposed in June 2000 that the salaries should be €7,420 a month, which is about £54,000 a year.

There are other concessions for the Strasbourg parliamentarians, too. MEPs would pay tax to the European Community, which operates a sliding scale of rates generally much lower than those of member states, although they would be able to opt to pay tax at the national rate.

And, under an amendment passed yesterday, those MEPs who are already sitting in Strasbourg would be able to opt out of the new system altogether if they were re-elected. The changes would take place when the next parliament was elected in 2004.

The latest deal, which some MEPs already find difficult to defend, still has to be approved by the EU member states and could yet founder. Last night Bill Miller, a Labour MEP and vice-chairman of the legal affairs committee, said there was "no justification" for the higher than expected salary and that it was a "tactic to scupper the reform".

That would be an acute embarrassment to the new president of the European Parliament, Pat Cox, who has identified reform of pay and expenses as a key issue. He highlighted the need for the parliament to clean up its own act by creating a so-called members statute in 1999, when the European Parliament helped to bring about the mass resignation of members of the European Commission over allegations of sleaze and cronyism.

The current regime, under which MEPs do not have to provide receipts for their travel expenses, has hindered the European Parliament's efforts to convince the public that it has reformed.

Although the expenses regime is an acute embarrassment to most MEPs, considerable vested interests have consistently obstructed plans to change it.

The fact that MEPs are now paid the same as national parliamentarians produces vast disparities in the remuneration of the Strasbourg deputies; at one end of the scale, Spanish MEPs earn just €2,879 a month while their Italian counterparts receive €9,975.

Lower earners tend to supplement their income through the expenses regime, which requires no receipts for travel, and reimburses parliamentarians for the cost of a first-class air ticket even if they travel economy class or on a low-cost airline.

The independent experts had proposed a system that would mean a pay increase for all national blocs, except the Italians and the Austrians, and would also make the 87 British MEPs about 25 per cent better off than their counterparts at Westminster.