What to do about MPs’ pay

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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