Why the proposals for an MP pay rise may not be that ‘ridiculous’.

Last week it was revealed that the Independent Parliamentary Standards Authority (IPSA) plans to hike MP’s pay to £74,000 from 2015- an 11% rise on their current £66,396 pay check. At a time when the Public sector has seen a pay rise cap of 1% until 2015 and the cost of living crisis continues to hit working families the hardest, is this an unfair pay rise or simply bad timing?

There was a huge backlash against the pay rise when first announced, Shadow Chancellor Ed Balls declaring it ‘ridiculous’ and ‘out of touch’. Nick Clegg and Ed Miliband were equally quick to announce they will refuse the pay hike, whilst David Cameron has stated Westminster pay should not increase while others are facing constraints. Outside the Commons others have also been criticising the wage increase, PCS union general secretary Mark Serwotka saying IPSA has not “grasped what is happening in the real world” whilst Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, stated ‘The rise must be rejected’. Yet in a recent survey by The Telegraph, only one in ten MPs declined the pay rise, hinting that yet again MPs will not put their money where their mouth is. Moreover, an IPSA survey taken by MPs revealed their average suggested salary was £86,250, with the Conservatives saying it should be even higher at £96,740 on average.

IPSA meanwhile are standing by their proposals despite the criticism, claiming the plans will not actually cost the tax payer ‘a penny more’. Along with the one off pay rise, the governmental body suggested a reform of MPs pensions including an end to the final salary pension scheme and increasing their contributions to the Parliamentary pension fund from 40 to 46 per cent. A cut in expenses and the scrapping of so called ‘golden goodbyes’- where MPs are paid another year’s salary after the election whether they are re-elected or not- have also been proposed. All this will mean that money won’t be taken from other sectors to support the pay rise, and the tax payer won’t be hurt.

Jack Straw, former Labour cabinet minister, has also shown his support for the proposed wage rise. He commented that whilst there was never a good time for a wage increase, it was important to attract people from ‘modest backgrounds’ to politics. In actual fact the current MP wage of £66,396 would put you in the top two per cent of earners in the UK; making this a pretty dubious assumption by the minister that these people would not want to enter politics. Straw’s comments have only alluded to the proposals being ‘out of touch’. Despite this, his claims do bring up the question whether the professionals at the top of their fields- doctors, lawyers, journalists- will continue to want to enter politics if the pay is so much lower than their current occupations.

When compared to the salaries of other Western countries’ MPs, or their equivalents, the wage increase does not appear too ridiculous. Although Spanish MPs are paid a mere £28,969 a year, US and Italian equivalents both benefit from a generous salary of well over £100,000. So put into perspective, the proposed pay rise is not that ludicrous.

This indecision over MPs wages will continue to resurface itself until definite regulation is put in place however. Many are calling for their salary to become indexed to the national average wage, therefore meaning MPs cannot claim their pay is too low or too high as all changes will reflect that of the average worker. Meanwhile, the public cannot complain when MPs wages are increased as theirs will have as well.

In the current economic climate the planned pay hike does seem a tad ‘ridiculous’, but if we want to keep the best people in politics- whilst also keeping the public happy- then IPSA needs to be allowed to carry out its job. Since being set up in 2009 the advisory body has saved the taxpayer £35 million with a further proposed saving of £7.5 million in 2015. With this proven track record it’s hard to argue that the proposals are not in the interest of the public.

Contributed by George Waddell

Sources
‘How to drain the poison from the MPs’ pay debate’- Jonn Elledge, New Statesman http://www.newstatesman.com/politics/2013/12/how-drain-poison-mps-pay-debate
‘Telegraph database: find out if your MP is planning to take IPSA’s 11 per cent pay hike’- Miranda Prynne, The Telegraph
http://www.telegraph.co.uk/news/politics/david-cameron/10512987/Telegraph-database-find-out-if-your-MP-is-planning-to-take-Ipsas-11-per-cent-pay-hike.html

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