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| MPs' pay rise: the proposal explained | MPs' pay rise: the proposal explained |
| (34 minutes later) | |
| In the wake of the scandal about MPs' expenses that began to unravel in 2009, an independent body was tasked with monitoring and controlling all aspects of MPs' income. On Thursday they announced a set of recommendations on changes to parliamentary pay. | In the wake of the scandal about MPs' expenses that began to unravel in 2009, an independent body was tasked with monitoring and controlling all aspects of MPs' income. On Thursday they announced a set of recommendations on changes to parliamentary pay. |
| Who decides? | Who decides? |
| The Independent Parliamentary Standards Authority (Ipsa) was created in 2009 to clean up the House of Commons by creating better oversight on MPs' private use of public money. Until now, parliament has always decided on its own salaries. | The Independent Parliamentary Standards Authority (Ipsa) was created in 2009 to clean up the House of Commons by creating better oversight on MPs' private use of public money. Until now, parliament has always decided on its own salaries. |
| What have they decided? | What have they decided? |
| The key recommendation that Ipsa has made is to increase the basic salary of MPs from its current annual rate of £66,396 to £74,000 in 2015 - an increase of £7,604 - so the £10,000 figure in much of Thursday's coverage is a generous rounding up. | The key recommendation that Ipsa has made is to increase the basic salary of MPs from its current annual rate of £66,396 to £74,000 in 2015 - an increase of £7,604 - so the £10,000 figure in much of Thursday's coverage is a generous rounding up. |
| Is that it? | Is that it? |
| No. Ipsa has announced a package of detailed proposals so the consequences for MPs' bank accounts are a slightly more mixed bag. | No. Ipsa has announced a package of detailed proposals so the consequences for MPs' bank accounts are a slightly more mixed bag. |
| Pay: It's not just an increase - MPs' pay will be tied to annual growth in average earnings. Given that 2015 average earnings aren't yet known, the increase would actually be between £73,365 and £83,430, but Ipsa thought it best that "in recognition of the current difficult economic circumstances we recommend that the salary be set at the lower end of this range: £74,000". | Pay: It's not just an increase - MPs' pay will be tied to annual growth in average earnings. Given that 2015 average earnings aren't yet known, the increase would actually be between £73,365 and £83,430, but Ipsa thought it best that "in recognition of the current difficult economic circumstances we recommend that the salary be set at the lower end of this range: £74,000". |
| Ipsa sets out reasons to justify the rise, including the fact that MPs' pay is worth around 80% of other public sector professions. They also argue that in 1980, MPs were paid 3.16 times average national earnings while today the ratio has slipped to 2.7. | Ipsa sets out reasons to justify the rise, including the fact that MPs' pay is worth around 80% of other public sector professions. They also argue that in 1980, MPs were paid 3.16 times average national earnings while today the ratio has slipped to 2.7. |
| Expenses: The items struck off the list that MPs can claim for may appear bizarre but they have been exploited in the past. After the next general election, MPs will no longer be able to claim for: | Expenses: The items struck off the list that MPs can claim for may appear bizarre but they have been exploited in the past. After the next general election, MPs will no longer be able to claim for: |
| "the cost of evening meals taken when the House of Commons sits after 7:30pm, home contents insurance, installation of televisions in residential accommodation or their associated licences, and hospitality (which frequently covers the costs of tea and biscuits in the office)". | "the cost of evening meals taken when the House of Commons sits after 7:30pm, home contents insurance, installation of televisions in residential accommodation or their associated licences, and hospitality (which frequently covers the costs of tea and biscuits in the office)". |
| Resettlement: MPs receive money when they leave parliament, whether or not they fight for their seat, and the resettlement sums can be as much as a year's salary. As an interim measure until 2015, Ipsa has suggested that only MPs who contest, and subsequently lose their seats will be entitled to this money and that it should be capped at six months worth of earnings. After 2015, MPs will receive resettlements similar to normal redundancy payments. | Resettlement: MPs receive money when they leave parliament, whether or not they fight for their seat, and the resettlement sums can be as much as a year's salary. As an interim measure until 2015, Ipsa has suggested that only MPs who contest, and subsequently lose their seats will be entitled to this money and that it should be capped at six months worth of earnings. After 2015, MPs will receive resettlements similar to normal redundancy payments. |
| Pensions: Current MPs' pensions are considered "unsustainable" by Ipsa - too generous and too costly to the taxpayer. The new scheme will base these on average salaries over the duration of an MP's career rather than their final salaries, and would also peg pension rises to inflation. | Pensions: Current MPs' pensions are considered "unsustainable" by Ipsa - too generous and too costly to the taxpayer. The new scheme will base these on average salaries over the duration of an MP's career rather than their final salaries, and would also peg pension rises to inflation. |
| What's the overall cost? | What's the overall cost? |
| Ipsa estimates that the changes would result in an additional cost of £500,000 in 2015, although they claim that they would not have to ask taxpayers for that money as it is available from their current budgets. | Ipsa estimates that the changes would result in an additional cost of £500,000 in 2015, although they claim that they would not have to ask taxpayers for that money as it is available from their current budgets. |
| Those annual budgets are currently around £170m and include MPs' pay, staff pay and office running costs. So the proposed changes amount to around 0.3% of the yearly bill. | Those annual budgets are currently around £170m and include MPs' pay, staff pay and office running costs. So the proposed changes amount to around 0.3% of the yearly bill. |
| When will it come into effect? | When will it come into effect? |
| Theoretically, the changes will happen in 2015 but this is just a public consultation phase. Depending on the responses to the proposals, Ipsa will finalise the changes later this year. | Theoretically, the changes will happen in 2015 but this is just a public consultation phase. Depending on the responses to the proposals, Ipsa will finalise the changes later this year. |
| Download the data | Download the data |
| • DATA: download the full spreadsheet | • DATA: download the full spreadsheet |
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