More pay but cuts to MPs' pensions

The BBC has learnt that an independent review into MPs' salaries is to recommend a pay rise of more than 11%, compared with what they are paid now, to be implemented after the next general election.

But the Independent Parliamentary Standards Authority (Ipsa) will unveil proposals tomorrow which will also include cuts to MPs' pensions and expenses.

The package they will propose will include:

  • An increase in MPs' salary to around £74,000 - a rise of over £7,500 a year from the current salary of £66,396 a year.
  • A less generous pension scheme
  • Cuts to MPs' evening meal allowance - an extra payment if they work late - and restrictions to claims for taxi fares
  • Lower "resettlement grants" paid to MPs who lose their seats

In recent days, all the Westminster party leaders have been briefed on the proposals.

However, government does not have a veto nor will MPs get a vote on the pay rise.

After the expenses scandal, Parliament decided that their pay, pensions and allowances should be decided by a new independent body.

There will be a public consultation on the proposals between now and October and they will not come into force until after the next general election in 2015.

This is the first recommendation on a pay rise for MPs made by Ipsa.

In the past, other reports have recommended a significant pay rise after looking at how MPs' pay has failed to keep up with the rises in pay overall in the past few decades and after comparing it with other parliaments abroad. MPs have had a two-year pay freeze since 2011.

The prime minister has said that it would be unacceptable for the "cost of politics" to go up.

I understand that the money saved by cutting MPs' pensions and expenses will not fully offset the increased cost of their salaries.

David Cameron is likely to say that a pay rise for MPs would be unacceptable whilst public sector workers' pay is being held to a 1% increase - a real terms pay cut.

Nick Clegg has said that he would not back a pay rise and that it would be "impossible" to sell to the public.

A Labour source pointed out that the law which created Ipsa forces it to review MPs' pay again at the start of the next Parliament, so this pay rise was "pie in the sky".

However, an Ipsa source told me that MPs have given up the ability to control what they are paid - "they sold that pass when they gave the power to us."

UPDATE: The recommended increase in MPs' pay of more than 11% is compared with what it is today.

There are, in fact, two planned 1% increases before then which means that in 2015 - the year in which the pay rise is meant to be implemented - the increase would be £6,300 or 9.3%.