Angry about the MPs’ 10% pay rise? Don't be – it won’t cost the taxpayer a penny more

Robyn Vinter explains why she’s no longer angry about it

*Updated 16 July 2015: Ipsa has confirmed the pay rise will go ahead.*

Another day, another story about people getting paid more than you. That’s how it feels, right?

Since the recession the UK’s economy has been slowly growing, but for most of us, our pay hasn’t even remotely kept up.

So to hear MPs are getting a 10% pay rise to a whopping £74,000 is beyond irritating. In fact, I have to admit I was really angry. In an article I wrote nearly a year ago, I explain exactly how angry and why, using the medium of graphs.

However, like any modern politician I’ve done a massive U-turn, and here’s why.

The Independent Parliamentary Standards Authority (Ipsa) was set up to regulate MPs’ pay without interference from government. It was a mixture of MPs washing their hands of the complex process of setting pay and knowing they’d get a bigger pay rise if they had an independent body justifying it for them.

And that’s (sort of) what’s happened. While there is still a lot of discussion among MPs, they’ve largely been able to say “there’s nothing we can do about it”, as the prime minister did yesterday. Short of abolishing Ipsa, which would require the creation of new laws, MPs can’t fiddle with their pay now, which I’d say is generally a good thing.

But the downside for MPs, and perhaps something they didn’t see coming, is Ipsa’s total restructuring of all their allowances, from pensions to expenses.

Bye bye big payouts

After the expenses scandal, Ipsa was created and immediately put under pressure to tighten up the rules around MPs expenses.

An MP once told me they were expected to use their expenses allowance to the max – claiming for everything they possibly could. He said during the process of being selected as a candidate for his constituency, a senior MP had told him that the salary didn’t seem much but he should see his expenses allowance as a top up. The extra £20,000 or so that he could claim was why the salaries of MPs were so low, he’d said.

Not only has Ipsa tightened up expenses rules since then, as of 8 May it’s tightened them further to take out “expenses that may appear to have an element of personal benefit”, and it’s also reduced other entitlements MPs receive.

It has heavily reduced resettlement payments – the lump sum MPs get when they leave office, whether they’ve been voted out or quit – which is great news considering just a few weeks ago after the general election this cost the taxpayer £11.5m. This means MPs who serve two terms will get £14,250, rather than £39,442 if voted out, and those who stand down will get nothing.

It’s also reduced the generous pension benefits so that instead of a final salary pension, it’s a career average, matching other public sector workers.

It won’t cost us a penny more

The only part of the proposal that is still being consulted on is the pay rise, which won’t come into effect until at least later in the year.

Taking everything into account, the raft of changes including the 10% rise in MPs’ pay, will not cost the taxpayer a penny more, Ipsa says.

It’s a much-needed step in the direction of the real world for MPs who essentially spend their days bickering in a palace surrounded by gold leaf and historical artwork.

What’s even more positive is that the pay rise will be a one off, and pay will then be linked to the earnings of the general public – rising and falling as our pay does and, I hope, giving MPs an incentive to improve pay conditions for everyone.

Such a massive hike in salary for MPs might seem hard to swallow, but considering the other changes to their benefits which make the whole thing much more transparent and, crucially, the fact taxpayers won’t need to stump up any more cash, I’m reluctantly on board.

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Readers' comments (2)

  • The next thing they can do is to reduce the number of MP's. Far too many of them, they often remind me of squabbling rats that only make life harder for the human population! Think its called a cull!

    Be nice to have two smaller houses, one elected by proportional representation the other by larger constituencies.

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  • A another pay out for the greedy club the rest of us can whistle, for it and suffer in the process.
    No way they should get a pay rise as most of them have money from being, involved with business.
    This is another scam.

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