Members of Parliament were handed an inflation-busting pay rise on Monday in a move set to anger voters.
While households struggle and are being taxed ever more, Westminster’s expenses watchdog said MPs would get a 5 per cent hike due to their workload and increasing ‘abuse and intimidation’.
That will take their annual salaries to £98,599 in the next financial year – way more than twice the UK average of £39,000 – and put them on course to earn £110,000 per annum by the end of the current parliament.
Critics blasted the move on Monday, branding the ‘princely’ pay increase as a ‘reward for failure’.
The rise is made up of a 3.5 per cent ‘cost of living uplift’ worth £3,300 – nominally to tackle spiralling bills but which can be spent on anything – plus a further 1.5 per cent ‘benchmarking adjustment,’ when salaries were compared to similar roles.
The increase in MPs’ pay is higher than most other workers in the public sector and also surpasses the 3.3 per cent rise the Government announced last month for NHS workers, including nurses in England and Wales.
John O’Connell, chief executive of the TaxPayers’ Alliance, said taxpayers will be ‘seething to see politicians receive an inflation-busting pay rise, all while they suffer a personal recession’.
He added: ‘After years of broken promises, falling living standards and deteriorating public services, MPs are being rewarded for failure with a princely pay boost.
‘Politicians should not be insulated from the consequences of their own actions. Their pay should be linked to real living standards measured by GDP per capita.’
The Independent Parliamentary Standards Authority (Ipsa) said it had considered how MPs are facing increasing constituency casework and more ‘abuse and intimidation’ when deciding on the rise.
The watchdog said it had ‘benchmarked’ the salaries of Westminster politicians against those of senior public-sector workers and parliamentarians in comparable democracies.
Ipsa chairman Richard Lloyd said: ‘The role of an MP has evolved. They are dealing with higher levels of complex casework, and abuse and intimidation towards MPs and their staff has been growing.
‘In reaching our decision… we have benchmarked MPs’ pay against other responsible, senior roles in civic society and similar worldwide democracies, as well as considering our core principles and wider economic context.
‘In future years we will continue to consider prevailing economic and fiscal conditions when confirming annual pay decisions, taking into account the experience of people outside of Parliament.’
Peers are also set to benefit as their tax-free daily allowance is linked to the increase in MPs’ wages – with this in line to rise from £371 to £390.
The rise is also likely to spark debate on the £100,000 ‘cliff-edge’, where workers face an effective 60 per cent tax rate on earnings between £100,000 and £125,140.
Once earning above £100,000, MPs would lose their tax-free personal allowance of £12,570 as well as their entitlement to 30 hours per week of free childcare, which can carry an annual cost of £9,600.
Some ministers have reportedly already looked at not taking their full salary to avoid the tax trap, and by the end of this parliament backbench MPs will be faced with the same quandary.
Ipsa has set MPs’ pay since it was created in 2009 in the wake of the expenses scandal.
