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11 July 2013: IPSA launches consultation on MPs’ pay and pensions

The Independent Parliamentary Standards Authority (IPSA) today published for consultation its recommendations to overhaul MPs’ pay and pensions.

Launching the public consultation, IPSA’s chairman, Sir Ian Kennedy, said the new package represented a fresh start:

“The history of MPs’ pay and pensions is a catalogue of fixes, fudges and failures to act. The package we put forward today represents the end of the era of MPs’ remuneration being settled by MPs themselves.

“For the first time, an independent body will decide what MPs should receive. We will do so in full view, and after consultation with the public.

The recommended package released for consultation today contains the following elements:

  • a salary of £74,000 in 2015, indexed to average earnings in the whole economy thereafter;
  • a new pension on a par with those in other parts of the public service, saving the taxpayer millions;
  • scrapping out-of-touch “resettlement payments” worth tens of thousands of pound per MP and introducing more modest, modern redundancy packages, available only to those who contest their seat and lose; and
  • a tighter regime of business costs and expenses – ending the provision for things such as evening meals.

Additionally, IPSA proposes that MPs produce an annual report on their activities and achievements

Sir Ian said the package was fair to taxpayers and fair to MPs:

“This package ends the historic peculiarities that have grown up around MPs’ pay, and sets MPs’ pensions on a sustainable footing for the future.

“The current pension scheme is unaffordable over the long term; the resettlement grants – which, until IPSA came in, were worth up to £65,000 and available for all - have had their day. We are recommending a modern, professional approach which also means refining the rules on expenses and business costs to rule out MPs claiming for an evening meal.

”It is clear from our work talking to the public over the last 18 months that people do not know what their MPs do. Clearly, that is damaging for our Parliament and has to be addressed. And so we are proposing the introduction of an annual report by MPs.

“The aim is to have as transparent a system as possible. The public will know what MPs get for their costs and expenses, their salaries and pensions, and what they have done.

“I recognise some will just concentrate on the salary, rather than the package as a whole, and say it’s too high; others that it’s too low. There is no easy way forward on this. We have put together a package of reform which we think is fair and which ends the anomalies of the past.

“The recommendations IPSA is proposing have a net cost of £500,000 a year. The changes we have introduced to expenses have already saved the taxpayer £35 million, and will be saving £7.5 million in 2015.

“This means that our solution to the problem of MPs pay and expenses – the problem we were created to fix – is £7 million a year cheaper than the regime we inherited.

The consultation runs until 20 October 2013. The full consultation document is available on IPSA’s website. People can share their views through IPSA’s website (www.parliamentarystandards.org.uk), Twitter (www.twitter.com/mppayandpension), by email (mppayandpension@parliamentarystandards.org.uk) or by post.

IPSA will publish a final determination in the autumn of 2013, to be implemented following the General Election due in May 2015.

Ends

For more information, please contact IPSA's Press Office.

Notes to the editor:

If public sector pay policy limiting increases to 1% a year were followed, MPs’ pay would be £67,731 in 2015-16. A salary of £74,000 would be an increase of £6,296, or 9.26%.