How MPs’ pay is decided

MPs are set to receive a £2,200 pay rise from next month as millions of Britons face a squeeze on the cost of living.

It means their base salary will rise from £81,932 to £84,144 in order to match last year’s average public sector pay increases, according to the Independent Parliamentary Standards Authority (Ipsa), which sets their pay.

The 2.7% wage increase comes “despite protestations from Boris Johnson and Sir Keir Starmer”, reported The Times. The prime minister has previously urged Ipsa to show “restraint” over MPs’ pay this year, while Starmer has argued that he and his colleagues should not receive a rise.

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Backdrop of economic hardship

The pay rise is “nearly half the current rate of inflation”, with the consumer price index expected to hit 7% in April, “effectively meaning they will get a real-terms pay cut”, said The Guardian. But the adjustment will be viewed “against a backdrop of significant economic hardship for many” and after the Bank of England urged workers “not to ask for sizeable pay rises to try to stop prices spiralling out of control”, said the paper.

The expected change is due to come into effect on 1 April, when families across the country will be hit with a 1.25% hike in National Insurance. Energy costs are also set to surge, with the average energy bill expected to rise to almost £2,000 after the price cap was raised by 54% by energy regulator Ofgem.

The increase in MPs’ salaries comes after a £3,300 pay hike was suspended last year due to the “economic impact” of the pandemic, after Ipsa came “under pressure from MPs” to halt the rise, reported ITV. More than 50 parliamentarians wrote to the body calling for pay to be frozen ahead of the proposed 2021 rise.

Who decides MPs’ pay?

MPs’ pay is set independently of both the government and parliament, and is instead set by Ipsa, which was set up in the wake of the 2009 expenses scandal.

Ministers will also receive an extra salary, as do MPs who hold special roles such as the speaker or chairs of committees.

MPs also receive expenses to “cover the costs of running an office, employing staff, having somewhere to live in London or their constituency, and travelling between Parliament and their constituency”, said UK Parliament.

They are allowed to take on outside work to supplement their income, often referred to as second jobs, although the practice is now under “increased scrutiny” following the Owen Paterson lobbying scandal last year, after which Johnson “promised to change the rules to limit the amount of time MPs can dedicate to outside work and ensure they do not work in fields of consultancy linked to parliamentary work”, said The Times.

Should MPs’ wages rise?

MPs across the political spectrum have voiced opposition to the pay increase.

Zarah Sultana, the Labour MP for Coventry South, tweeted that she believed the decision from the regulator to increase pay was “wrong”. She added: “Ordinary people are facing a Tory cost-of-living crisis. They should get a proper pay rise, not well-paid MPs. That’s why I will donate mine to Coventry Foodbank and other local causes.”

A Conservative backbencher told The Guardian they had already given theirs away, while another complained: “Don’t want it, don’t need it, not my decision, now meant to justify it.”

But others voiced support for the move, arguing that MPs can’t have it “both ways” when it comes to setting pay.

“We either want pay set independently or we want MPs to control their own pay. We can’t have it both ways,” an anonymous MP told The Guardian. “We appear to want to run headlong (back) into a world where only wealthy people can afford to be MPs. Ipsa is independent for a reason.”

Richard Lloyd, the chairman of Ipsa, said that the pay increase was the first in two years and “follows the average of increases across the public sector last year”.

“MPs play a vital role in our democracy and this is reflected in their pay,” he said.

“It is right that MPs are paid fairly for the responsibility and the unseen work they do helping their constituents, which dramatically increased last year.

“For Parliament to reflect society, it is vital that people from all walks of life can be an MP.”