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What to do about MPs’ pay

June 30, 2013

My regular slot on Radio Four’s Westminster Hour MP panel tonight had a sting in the tail…a discussion about whether MPs should accept a pay rise! There’s probably never been a time when the press and the public think that MPs deserve a pay rise. But at the moment I would agree that the time is not right. My salary has been frozen for three years since May 2010, in line with other public sector employees earning more than £21,000 a year. Public sector pay goes up by 1% in the next two years and we should expect to get no more.

The trouble is that the Independent Parliamentary Standards Authority are rumoured to be on the brink of announcing a substantial pay award for MPs. IPSA was created in the aftermath of the furore over MPs’ expenses four years ago. It sets the terms of Parliamentary pay, pensions, budgets for staff and office costs and MPs’ personal employment expenses such as travel and accommodation. We MPs have absolutely no say in any aspect of the regime, including our salary. So MPs (nor meddling party leaders) cannot instruct IPSA to set MP pay at any particular level.

What are the facts? MPs salaries have been frozen at £65,738 since April 2010. They were increased by 1% on 1st April this year and the same is currently planned by IPSA for April 2014. MP salaries have barely changed over the last ten years. A decade ago the salary was £56,358 so the rise since then has been an average of just 1.66%, meaning a substantial real terms pay cut in gross salary. Pension contributions have also increased several times and are the highest in the public sector. The new IPSA expense scheme rules mean many MPs are subsidising their normal employment costs (eg overnight accommodation and subsistence in London) out of their salaries. I put these points as facts, readers can draw their own conclusions whether MPs are treated generously.

What’s to be done? If IPSA award say a 10% pay rise, MPs will be in a very awkward spot. No doubt the three party leaders will demand that that IPSA is ignored. But that would destroy the case for an independent body. Personally, if my pay rises by more than the rest of the public sector, I will donate the difference to charities.

But if I could make a suggestion to my IPSA paymasters it would be this – don’t make any substantial changes until the day after the next general election. There’s never a good time to change MPs’s pay but immediately after an election removes any hint of vested interest. Pay could be set for the entire 2015 – 2020 Parliament and not changed again for 5 years.

At the same time I would ban all MPs from receiving any salaries or emoluments from parallel careers. Being an MP (at least for me) is a full time job. In fact it is more often than not a seven day a week long hours job. There should be no outside earnings from the legal profession or company directorships. I’ve noticed in past debates over MP salaries that it is the rich MPs who call for restraint by their poorer colleagues. If Parliament is to be a place where everyone can serve without feeling either financial embarrassment or expecting a lucrative career, then MPs must be adequately paid and they must all be paid the same base salary.

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19 Comments leave one →
  1. July 1, 2013 8:11 am

    Hey Stephen.

    I think the best point that you make is the one about no external salaries. Being an MP is indeed a full-time job if done properly.

    How about a straw poll to see if you can find an LD MP with a second job?

    Better still, an EDM supporting legislating against additional income. If MPs were seen to be doing only one job – no ‘consulting’ income (i.e. being a lobbyists puppet) etc.

    • Chris permalink
      September 8, 2013 7:38 pm

      Hi Neale

      A person who has been elected by the residents of his neighbour hood should realise that it is a ” privilelge ” to serve them and he/she should devote all of their reasonable working year to improving the life of those residents

      If they do a good job they should get a good salary but only from the government purse and not external companies

      They should also work to ensure that the Actions of the UK Government are fair and even handed at home and more importantly abroad in The Global Village to use that horrible expression

      I have raised a petition on change.org to have the MPs annually declare all boards they sit on as a director or silent director ( unfortunately I am PC thick so cant activate it )

      We dont tolerate part time doctors that can kill people or lawyers or judges who can send people to jail so why should we tolerate men and women who can FINANCIALLY kill peoples lives

      The Pecking Order in order of power

      The Club
      Global Companies
      World Governments
      Armed Forces
      World Resources
      The Expendables

      I support your views and please continue

  2. Liberal Neil permalink
    July 1, 2013 8:23 am

    On your figures I make it a 16.6% increase over the last ten years, not the 1.66% you quote. Did you mean 1.66% per year?

    • July 2, 2013 11:22 am

      Thanks Neil – I have now amended to insert “an average of”…..to make clear it is an annualised rate over a decade. In practice there were higher percentages in some years as well as zero for the last three.

    • Chris permalink
      September 8, 2013 7:42 pm

      Neil

      Its not the salaries that are important but the pension scheme that the House Of Lords runs or did run with a well known pension company that very nearly went bust and you and I had to bail them out a few years ago

      Win Win Win situatiuons only seem to exist at the top of the pile !

  3. dave permalink
    July 1, 2013 9:07 am

    Says here you’re on 66,396… http://www.parliament.uk/about/faqs/house-of-commons-faqs/members-faq-page2/

    • July 2, 2013 11:25 am

      Yes, that’s the 1% rise this year, put through by IPSA, in line with rest of public sector and benefit rises. I’ve added that in above.

  4. Ian permalink
    July 2, 2013 5:48 pm

    Stephen, several points:
    The MPs pension scheme contribution rate is 6-12%, but they get up to an additional 30% added, with a 1/40 accrual rate (to compensate for the supposed increased uncertainty in their income compared to the rest of us). They can take it from age 55.

    This is actually better than (say for example) a doctor: 14% contribution, matched by employer, accrual rate 1/80, taken at 60 (soon to be 65).

    It’s even better if you’re PM, speaker or Lord Chancellor- a single day in office, without a penny of personal contribution, is worth a lifetime of pension to them- worth at least 80K annually.

    As for pay (Factsheet M5 if you’re interested), using the same reckoning as they calculate GP salaries, MPs (who would claim to be paid only £65K), would be considered to receive:

    £65k salary, plus £14.5K (for committee chairs), plus £68K (for office holders), plus £19.9K for accommodation expenses, plus £12.7K for CORE, plus £10.4K general admin expenses, plus £115K for employees expenses, plus travel expenses (uncapped amount), plus “allowances” – variable but the source of MP expenses scandal a couple of yrs ago, plus “miscellaneous expenses”- undefined.

    And, when they’re voted out of office, they get a £30k tax free goodbye to help them readjust to the real world.

    Stephen, I’m glad to hear you’re prepared to donate pay over the 1% to charity, but I’d wager that most of your colleagues will trouser the whole lot.

    It’s also interesting that MPs are making a big deal about being unable to alter the recommendations of an independent pay body, but routinely and repeatedly do exactly that when considering pay in other professions.

    • Joe permalink
      July 11, 2013 2:40 pm

      Thanks for these figures Ian – I have raised the point about MPs pensions previously, especially in the light of all the coalition attacks about ‘gold-plated’ public sector pensions. MPs pensions are significantly better that any other public sector worker, when other public sector pensions were cut and downgraded the MPs pension scheme mysteriously remained the same. In addition, unlike many public sector pension schemes which are in surplus (such as the TPS), the MPs scheme has had to be bailed out by the taxpayer on numerous occasions. I wonder how many MPs will be willing to donate the difference between their pensions and, say a nurse’s pension to charity when they retire (at 55)?

      • Chris permalink
        September 8, 2013 7:46 pm

        Joe

        “Job Description “……….Go to London and get up and make a few speeches and return home to chair a few meetings with your voters and do what the Party says

        All information supplied by Civil Servants and speeches written by professionals

        £66,000 pa plus pension fund contributions

        Yes I realise its not that simple but….

      • September 13, 2013 1:54 pm

        Joe if you are certain of your facts then would you mind sharing the evidence? Dates of change, percentage rates, etc. Thanks.

  5. G Freeman permalink
    July 2, 2013 7:33 pm

    There’s an easy way to resolve this.

    Let every MP set their own funding for 2015 onwards to cover their salary, all expenses and staff, and a defined contribution pension. But introduce legislation forcing all Parliamentary candidates to state their requested total funding and funding per council tax paying constituent on the 2015 ballot. From 2015 onwards the annual cost of each MP can be added as an itemized charge to their constituents’ council tax bills.

    Every voter can then decide what quality and price of MP they want to vote for. If an MP requests too much they will lose votes, if they request too little and cannot provide sufficient service to their constituents they will be unpopular and get voted out.

    • September 13, 2013 1:56 pm

      There are several rich Tory MPs who claim nothing or very little – check out Zac Goldsmith or Adam Afriya. You are essentially advocating a Parliament full of people who can afford to do politics as a hobby.

  6. Philip permalink
    July 10, 2013 9:15 am

    I’m not against MPs being well paid. It’s an important job, it should be. I am against their pay rising significantly more than the public sector in general. As a public sector employee the IPSA’s proposals are frankly insulting. I think your attitude is eminently fair, Stephen. I also like the idea of linking any pay rise to banning or at least strictly regulating outside earnings. Richard Murphy made a similar argument on his blog with regard to outside earnings (he was actually arguing for the pay increase).

  7. Clare permalink
    July 10, 2013 9:32 am

    I think a pay rise that is not linked to pay rises for the public sector will go down very badly with the public. Councillors in Bristol also have an indepdndent review body for allowances and the oppourbity to express their opinions before the rocommendation is made. 650 MPs expresing similar views to you would have quite an effect on the final IPSA outcome.

  8. July 11, 2013 7:20 am

    There are three, four, five or more applicants for each MP vacancy, so the present salary must be considered by them to be OK. All in it together? Clearly some are more in it than others.

    • July 11, 2013 7:58 am

      @keith. I don’t buy that as an argument. Being gifted a safe seat of MP somewhere like Bournemouth East, and then being in a position of influence, jetted around by various governments and companies, gaining donations from Michael Ashcroft to your local constituency party… does NOT compare with an ordinary job.

      If we wanted to make comparisons of number of ‘applicants’ to that in a typical job, we need to unlock democracy (as the campaign group is named). Not only do we need to ban MPs having second jobs doing ‘consultancy’, but we need to clean up lobbying, party funding, and our voting system. Too many seats are too safe.

  9. Jem O'Carroll permalink
    July 12, 2013 8:31 am

    I hadn’t realised principles start and stop with election where they neatly coincide with pay rises.

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